The Warsaw Stock Exchange has been publishing the value of WIG20 Total Return index for two years. Throughout this period, the basic WIG20 calculated only on the basis of shares’ prices has remained practically without changes. It means that dividends paid by the biggest stock exchange companies gave investors 10 per cent of an additional profit in two years.
In the era of lower and lower interest rates, we clearly notice the increase of investors’ interest in dividends companies, that is such partnerships which pay a dividend and share it regularly with investors – explains Tomasz Wiśniewski, vice-president in Department for Information Product Development and Stock Exchange Index in Warsaw. – We only need to look on currently interest of deposits or interest rates. The finding of an offer on 3-4 per cent level borders on the miraculous, whereas in case of WIG20TR the dividend rate totals ca. 4 per cent.
Although the stock exchange started to publish WIG20TR two years ago, the index has been calculated for years. Within decade, the return rate of WIG20 has increased by 24,78 per cent, whereas WIG20TR has reached 98,32 per cent. Those 70 percentage points of difference is an effect of additional profits, which investors achieved from investments in those companies which share their profit in the form of dividends or in the effect of new shares with rights issue – points out Tomasz Wiśniewski.
The result is even more surprising because not every company pays a dividend. Only those partnerships which shared their profits with shareholders had an influence on such dynamic growth of profitable WIG20TR index. There was a difference here in relation to what occurred couple of years ago – thinks vice-president in Information Product Department and Stock Exchange Index in Warsaw. – Well, only ten companies from WIG20 index have been paying a dividend in those days. Currently, the number of such partnerships totals 16. Moreover, the amount of a dividend, that is profit which is shared by companies with investors, has also increased. Then it was 10 billion zlotys, now – 15 billion zlotys. It has a crucial impact on managing the value of WIG20TR index.
Different factors influence the share quotation such as statements of politics and economists, situation on world stock exchange, wars or changes in prices of raw materials. However, even if they break quotations, good companies are able to make a profit of it and share it with shareholders no matter of prices of their shares. Dividends are a profit on which one may count even in a time of crash. Especially over the course of two or three years, the clear growth of diversification of the price and profitable value of WIG20 index has been noticeable – reminds the representative of the WSE. – One may say that WIG20 index stands still, but if we look on the stock exchange from the perspective of WIG20TR index, then we will be able to notice that we have been observing successive growth of quotation values of the biggest companies from the WSE.