Dividend yields of companies listed on Rasdaq surpass those of companies listed on the main tier of the stock exchange

• Despite this fact, investors shy away from them

Even though the dividend yields for some of the companies listed on the Rasdaq tier are double or triple when compared to those listed on the Bucharest Stock Exchange, investors still seem to favor the latter, which they see as safer. Brokers claim that the low liquidity of Rasdaq issuers, their lack of transparency and the fact that they are not as well known cause most investors to shy away from them, as the "dividend mirage" is not enough to sway them.

The dividend payout proposed by "Semrom" Muntenia (symbol: SEOM) for 2009 has one of the largest yields in the market (18.42%) (according to yesterday"s price for SEOM shares), almost three times higher than the yield of the dividend proposed by "Transgaz" and almost four times that of the dividend of SIF "Oltenia". In spite of this, SEOM shares haven"t been traded in almost one week, and the last trade was 10 shares.

"Dividends in themselves are not the main focus of investors, because on the ex-dividend date, the price of the stock usually drops by the value of the dividend", said Andrei Petrescu, portfolio manager with "Prime Transaction", who added: "Investors" goal is to hold on to stocks for a larger period of time, during which time they would also receive dividends, while at the same being able to exit when they feel the time is right, which is why they are interested in owning liquid stocks. SEOM is rather illiquid, there are very few buyers and sellers, it"s hard to believe that a big investor would buy this stock". SIF "Muntenia" controls 89.42% of the company.

"Mercur" Craiova (MRDO) proposed a dividend of 3 lei/share, with a yield of 10.71%, when compared to yesterday"s price of 28 lei/share. Even though its price yesterday increased 20.17%, this change came on the back of one trade which involved a single share.

"It"s obvious that in the case of MRDO, the company is being pressured into offering as big a dividend as possible, as its majority shareholder is SIF Oltenia, which holds a stake of 85% and is interested in getting the best return on its investment", said Raul Haş, trader with "Broker" Cluj, who added: "It is rather natural that prices go up once the dividend proposal is announced, since even if somebody wanted to buy those shares couldn"t do it, since the number of sellers is very low". Raul Haş feels that in the case of most companies listed on the stock market, shareholder polarization isn"t significant enough to allow shareholders to defend their interests: "In the case of companies listed on the stock market, it is very difficult for shareholders to reach an agreement to pressure companies into paying out big dividends, as they are extremely dispersed".

The management of "Conted" Dorohoi (CNTE) proposed a dividend of 6.41 lei/share, which would mean it one of the stocks with the highest dividend yields on the Rasdaq tier (22.73%). CNTE only rose 0.71% yesterday, to 28.2 lei/share, on a volume of just 72 shares.

Another company listed on Rasdaq, with 16.47% dividend yield is "Alimentara" Slatina (symbol: ALRV), also controlled by SIF "Oltenia". ALRV yesterday dropped 5.3%, to 12.5 lei/share, on a turnover of just 19,370 lei. "Gastronom" Buzău (GAOY) also wants to pay a dividend of 4 lei/share, which means a yield of 12.65%. GAOY stock yesterday dropped 8.93%, to 31.6 lei/share, with the in-dividend date set at March 31st.

"Investors aren"t rushing to buy stocks listed on Rasdaq that have high dividend yield because last year they approved dividends which they have yet to pay out or simply didn"t distribute them at all", said Daniel Gavrilă of "Egnatia Securities", who added: "Usually, in these companies, there is a high shareholder concentration, which makes them less attractive, transparency isn"t that great and neither is liquidity".

The highest dividend yield on the BSE is 7%, for shares of "Aerostar" Bucharest.