Stock buybacks>operating CF

[weijian]

MIIF has been buying back their shares in the market for quite sometime already. Does the Management hold a lot of options yet to be excercised?
Is that why MIIF did not increase latest dividend payout? Or for some other better reasons.
Vested.

hi Temperament,
I do not think there was an employee share option scheme for employees of the Manager (MIMAL) to start with. It did started the scrip dividend scheme (allow one to receive shares rather than cash) back in 2007 but in my memory, it was swiftly suspended after the share price crashed and the Manager deemed it to be grossly undervalued.

As to why MIIF did not increase latest dividend payout, here's my 2 cents:

(1) Current assets actually only support ~3.9cts/share/yr (based on historical data). Latest payout of 5.5cts/share/yr therefore is tied to FUTURE growth. The deficit will be made up by the existing cash hoard (~8cts/share) until the assets actually payout 5.5cts/share/yr. I can only fathom that 5.5cts/share/yr is already a high hurdle to achieve. Hence it will be hard to grow (at a sustainable rate) beyond that in the near future.
(2) It can choose to pay out 8cts/share as special dividends. The end result shd be neutral to its mgt fees but then their future ability to increase their AUM (and hence mgt fees) will be impaired once all their cash is exhausted.