In Taiwan's stock market, the ex-dividend season peaks from June to September. During this period, many companies distribute their earnings to shareholders in the form of cash or stock, leading to what is known as the ex-dividend market phenomenon. Investors frequently ask about the ex-dividend reference date and how to check these dates. This article aims to provide a comprehensive explanation of what ex-dividend is, how to check the dates, and how it’s calculated.
Table of Contents
- Introduction to Ex-Dividend
- How to Check Ex-Dividend Dates
- Calculation of Ex-Dividend Price
- Understanding Ex-Dividend Market
- Participation in Ex-Dividend
- Should You Participate?
Introduction to Ex-Dividend
What is Ex-Dividend?
Ex-dividend can be divided into two types: 1. Ex-right: refers to the distribution of stock dividends. 2. Ex-dividend proper refers to the distribution of cash dividends.
How Ex-Dividend is Calculated
After distributing cash or stock dividends, the stock price is adjusted on the ex-dividend date by the value of the distributed amount. This adjusted price is known as the ex-dividend reference price. For detailed calculations, visit the Ex-Dividend Reference Price Calculation Website .
Imagine if Lazy Co. has a share price of 100 TWD and distributes a cash dividend of 10 TWD, bringing the yield to 10%. On the ex-dividend day, the stock price adjusts to 90 TWD.
Filling Ex-Dividend
Filling the ex-dividend occurs when the stock price returns to its pre-ex-dividend level. For example, Lazy Co.'s stock price returning from 90 TWD to 100 TWD signifies a filled ex-dividend.
Ex-Dividend Market Phenomenon
The ex-dividend season often leads to a market phenomenon due to the high attraction of dividends. High cash dividend distributions and high yields can drive the stock price up as investors rush to buy.
How to Check Ex-Dividend Dates
To participate in an ex-dividend, you must buy the stock before the ex-dividend date. The most critical date is the ex-dividend reference date.
Helpful websites include: 1. TWSE Ex-Dividend Dates 2. Goodinfo Ex-Dividend Information
Calculation of Ex-Dividend Price
The ex-dividend reference price is calculated by adjusting the last traded price on the day before the ex-dividend date by the amount of dividend distributed.
Participation in Ex-Dividend
To participate, buy stocks through a Taiwanese brokerage account. If you don't have one, consider the following recommended options:
| Discounted Brokerage Accounts | | ----------------------------- | | E.SUN Securities | Sign Up Offer Here | | Shin Kong Securities | Sign Up Offer Here |
Buy at least one trading day before the ex-dividend date to be eligible.
Should You Participate?
Evaluating Ex-Dividend Participation
Consider the company's potential to fulfill the ex-dividend and overall business prospects. Avoid participating solely based on high yields.
Beware of Price Depreciation
Ensure the company has strong business fundamentals to avoid losing money on price depreciation, even if you gain from dividends.
Taxation Reminder
Cash dividends are taxable and should be considered in your tax planning. For more information, visit the official channels for tax regulations.
