Shares prices of FLC Faros Construction Company (ROS) have been on the rise after the firm paid a share dividend of 10% on record as of July 4.
ROS gained around 10% from 77,720 dong ($3.42) a share on June 21 to settle at 85,500 dong ($3.76) on July 14.
The construction company issued a total of 43 million new shares, or 10% of the outstanding volume, for the dividend payout. Shareholders are expected to receive the shares in their accounts next month.
Despite this dilution, market participants keep bullish on ROS. After a period of correction, ROS shares have been going up since July 5, extending their winning streak to 10 sessions.
This uptrend can be attributed to investors’ appetite for companies that pay share dividends in a bull market. Shares of real estate developers such as DXG, TDH and HBC have also risen after share dividend payments.
Even when the company announced the suspension of a plan to sell shares to existing shareholders at a 1-for-4 ratio, citing its strong capital resources, ROS’ uptrend has remained intact.
Foreign participation is one of the main factors behind this upturn.
Foreign traders net bought nearly 40 billion dong ($1.76 million) worth of ROS shares between July 5 and 14. They net purchased 8.3 million ROS shares worth $46.5 million year to July 14, according to exchange data.
The stock’s uptrend is expected to continue because its rallies in the past usually lasted for two to three months.
Its first uptrend started right after its debut on the Ho Chi Minh City Stock Exchange (HOSE) in September last year until two months later. The second rally helped the stock climb by over 60% from mid-December 2016 to March 16, 2017.
ROS is now valued at 40.44 trillion dong ($1.78 billion) and is one of ten largest stocks in the Vietnamese stock market.