PSX dividend process explained

One of the preferred forms of earnings for investors in PSX is dividend investing. It provides a relatively low-risk method of generating passive income by investing in dividend-paying companies.

The Pakistan Stock Exchange (PSX) is full of companies that pay attractive dividends. Some have consistently maintained a dividend yield of over 15% while at times companies end up paying as much as 40% of their price in dividends, though these occurrences are rare and hard to capitalize on.

For anyone new to the PSX, understanding the PSX dividend process is important. PSX is unique in many ways. For example, the dividend is declared as a percentage of face value and not as a percentage of share price. This confuses many new investors.

To make it easier to understand the whole process of dividend declaration and payment, we have compiled a guide that will guide you through all the steps of dividend payment in PSX.

It all starts with the board meeting date announcement

Board meeting date announcement

All companies are required to announce the date of their board meeting in advance. You can find the announced PSX board meeting details on our page: PSX Board Meetings.

Here is what it typically looks like:

The last two columns show the date and time as well as the purpose of the meeting.

Results announcement and declaration of dividend

On the day of the meeting, you can expect the results and payouts to be announced.

This data is also known as the dividend declaration date because the payouts are announced together with the quarterly earnings report.

The result is transmitted through the official PSX announcements page.

However, you can view a summary of the daily results on our ‘Earnings‘ page.

This is what the earnings results page looks like:

The results summary is mentioned in the last column and also contains the payout details, if any.

Reading the official company announcement

Once a company has announced a payout, it is a good idea to look at its detailed announcement. You can find the announcement on the official PSX announcements.

Here is what a typical announcement looks like:

The dividend is always mentioned as a percentage of the face value. You can find the face value of the stock on our PSX Listed Companies List page.

We have already covered how to read the payouts section of a stock from the PSX official website. You can read the detailed article on our How to read the payouts section of a stock page. This article is very helpful in understanding the common terms that are used to describe payouts and we highly recommend you go through it if you are a beginner.

Book closure dates and ex-dividend date

Once you know that a company has announced a dividend, the next step is to look for its book closure dates, so that you can calculate the ex-dividend date. The ex-dividend date is the date on which you need to already hold the stock at market open to be eligible to receive the dividend.

You can find out the book closure dates of all PSX stocks on our PSX Book Closure Dates page.

Here is what it looks like:

The current PSX rule for Ex Date is “BC – 2” which means that book closure start date minus 2 working days will become the Ex-date which further means that book closure start date minus 3 working days will become the last date you can buy the stock.

Credit of Dividend

If you are eligible for the dividend, the dividend amount is paid out to your bank account within 15 working days after the book closure start date. This can vary from company to company depending upon current PSX regulations.

You can find a list of all companies that have already sent the dividends to shareholders’ bank accounts on our Dividend Schedule page.

This concludes the process of dividend payouts in PSX.

If you have any questions, please comment in the comments section below and we will be happy to answer your queries.