Link Between Dividend Payouts & Depreciation of Indonesian Rupiah
At least 11 listed companies on the Indonesia Stock Exchange announced that they are ready to payout dividends to shareholders in the upcoming March-April dividend season. However, the traditional dividend season also implies rising pressures on the rupiah exchange rate as a significant number of shareholders are foreign investors.
On the list of major companies that confirmed dividend payouts in the coming dividend season the most attractive one is Indo Tambangraya Megah with a dividend yield of 6.22 percent. For short-term investors a high dividend yield is very attractive (while long-term investors would prefer to take a careful look at the fundamentals of the company as well as related sector).
Traditionally the March-April dividend season gives rise to capital outflows from Indonesia as the listed companies will need to disburse part of the dividend to foreign shareholders. David Samual, economist at Bank Central Asia (BCA), said there is a clear link between dividend payouts and the tendency of Indonesia's current account deficit to widen in the second quarter of the year. In 2016, however, this phenomenon was not visible due to asset repatriations in the context of Indonesia's tax amnesty program. These capital inflows managed to support the rupiah back then.
Bhima Yudhistira, economist at the Institute for Development and Finance (Indef), detects the same phenomenon: most foreign investors who receive the dividend in rupiah will exchange it into US dollars thus putting pressure on the rupiah in the dividend season. Yudhistira expects the rupiah to weaken to about IDR 13,800 - 13,980 per US dollar later this year.
Confirmed Dividend Payouts March-April 2018:
| Company | Dividend (IDR/share) |
Dividend Yield (%) |
Payment Date |
| Indo Tambangraya Megah |
1,840.00 | 6.22 | 20 April 2018 |
| Wahana Ottomitra Multiartha | 15.50 | 5.58 | 18 April 2018 |
| Bank Pembangunan Daerah Jawa Barat dan Banten |
90.30 | 4.34 | 26 March 2018 |
| Bank Rakyat Indonesia | 106.75 | 2.97 | 25 April 2018 |
| Bank Negara Indonesia | 255.56 | 2.78 | 20 April 2018 |
| Bank Mega | 93.34 | 2.67 | 27 March 2018 |
| Bank Mandiri | 199.03 | 2.49 | 20 April 2018 |
| Wijaya Karya Beton | 12.13 | 2.33 | 20 April 2018 |
| Bank Danamon Indonesia | 134.44 | 2.13 | 18 April 2018 |
| Bank Tabungan Negara | 57.18 | 1.56 | 24 April 2018 |
| Semen Baturaja | 3.69 | 0.10 | 29 March 2018 |
Source: Kontan