DIVIDEND POLICY, TRADING CHARACTERISTICS AND SHARE PRICES: EMPIRICAL EVIDENCE FROM EGYPTIAN FIRMS

Mohammed Omran and John Pointon ()
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John Pointon: Plymouth Business School, University of Plymouth, Drake Circus, Plymouth PL4 8AA, UK

International Journal of Theoretical and Applied Finance (IJTAF), 2004, vol. 07, issue 02, 121-133

Abstract: For a sample of 94 firms, using data up to 1999, we find that retentions are more significant than dividends in determining prices of shares that are actively traded on the Egyptian stock market. However, for non-actively traded shares, the accounting book value is the most important determinant. Reductions in dividends are associated with a lack of liquidity and profitability. Dividend increases are linked to higher pre-tax operating profit effects, which outweighed post-tax effects. As to aspects that influence dividend payout ratios of actively traded firms, important factors are gearing and the market to book value, the latter a surrogate for investment opportunities. For non-actively traded firms, a more complex pattern emerges.

Keywords: Dividend; payout; stock market; Egypt; JEL classification code: G35; N25 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (17)

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DOI: 10.1142/S0219024904002384

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