Friday, 23 January 2009

Colombian Companies May Cut Dividends Because of Economic Downturn, According to Portafolio

Portafolio economic newspaper says in a report that only banking companies and Ecopetrol will maintain dividends, while most industrial, manufacturing, commodities and export companies will slash them. The traditional allocation of earnings to dividends had a ratio of 70 percent to 90 percent of profits, but stock analysts expect that to fall to about 50 percent this year.

So, Colombian shareholders are being hit in two fronts: the decline in the price of their stock holdings (Ecopetrol has fallen about 30 percent since October) and reduced dividends. A recovery isn't expected before the end of the third quarter.

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