A number of listed companies have announced positive 2010 business results and decided to raise their dividend payouts to satisfy shareholders' expectations.

Rubber companies Tay Ninh (TRC) and Phuoc Hoa (PHR) have announced plans to increase 2010 dividend payments from 20 per cent to 30 per cent. By the end of 2010, TRC's net profit exceeded its target for the year by over 68 per cent, reaching VND267 billion (US$13.7 million), and Phuoc Hoa Rubber Company's net profit reached VND471 billion ($24.2 million), surpassing its yearly goal by 75 per cent.
TRC Chairman Le Hai Lieu said the dividend rate had been adjusted based on the earnings per share (EPS) ratio and as the company earned large profits last year, shareholders were the first beneficiaries.
Becamex Infrastructure Development Company (IJC) has also recently agreed to pay cash dividends of at least 30 per cent instead of the 18 per cent that had previously been approved after news that its 2010 net profit doubled the previous year's figure to reach almost VND209 billion ($10.7 million).
Other companies also plan to increase their dividend rates, including Ninh Binh Thermal Power (NBP) from 10 to 25 per cent, The Foreign Trade Forwarding and Transportation Co (VNT) from 15 to 20 per cent and Duc Thanh Wood Processing (GDT) from 15 to 20 per cent.
Some market analysts said with Vietnamese investor psychology, increasing dividends was considered an effective remedy to a hike in share prices, as dividend payouts would contribute to investors' decisions over whether they would reinvest, thereby affecting share prices.
Shares of Becamex Infrastructure Development hit their ceiling price in six consecutive sessions following the dividend announcement while PHR shares also rose for three straight days.
"When the market is good, investors prefer dividends in the form of stocks, but when the market declines, accompanied by the time it takes for shares to reach investor accounts, they prefer cash dividends," said Nguyen Ngoc Truong Chinh, General Director of Golden Lotus Securities Company.
Investors expect dividend rates to at least equal bank deposit rates and Chinh said in the context of current high inflation and rather low dividend rates, increasing dividends could contribute to creating a positive investor psychology.
"Viet Nam's stock market is built upon faith and with 90 per cent of individual investors, that belief dictates the market performance," Chinh said.
The announcement of the dividend increase sent a message that the company was confident about its future business performance and had sufficient financial resources to maintain a high dividend level, Chinh said.