The American depository receipts (AVIFY) of AIS PCL, the Thai telecom company, currently yield over 11%. This seems very high...why the high yield...a cheap stock because of fundamental concerns about the company or Thailand political risk factors or some other reason. Or is the company just rolling in it and pays a very generous dividend?

Edited January 12, 201115 yr by FarangBuddha

A couple of factors here:

(1) ADRs are IIRC, denominated in USD, so the yield will be calculated in USD. The ongoing depreciation of the USD will elevate the yield.

(2) AIS paid a special dividend in 2009 of 5 Baht/share almost doubling the normal dividend yield.

Before investing, remember that two biggest shareholders are Shin Corp. and Singtel. Between them they own more than 60% of the stock. AIS is run for their benefit - not the ordinary shareholder.

A couple of factors here:

(1) ADRs are IIRC, denominated in USD, so the yield will be calculated in USD. The ongoing depreciation of the USD will elevate the yield.

(2) AIS paid a special dividend in 2009 of 5 Baht/share almost doubling the normal dividend yield.

Before investing, remember that two biggest shareholders are Shin Corp. and Singtel. Between them they own more than 60% of the stock. AIS is run for their benefit - not the ordinary shareholder.

I assume the database sources I'm using [Google Finance, Yahoo Finance, and Charles Schwab] are all calculating the current dividend yield either on the past 52 weeks or the the 2010 calendar year. If that is the case, a special dividend from 2009 would not influence their current reported yield. Please inform if that is incorrect.

I would assume the basic goals of Shin Corp. and Sing Tel are to increase the value of AIS and/or receipt of current income. These are pretty much the same goals of any investor, including minority ones yes, so is there much downside there.

As you say, it's also a side bet on the continued depreciation of the dollar vis-a-vis the baht.

Edited January 13, 201115 yr by FarangBuddha

I don't think the 2010 financials are available yet. At least, they're not on Google Financials. The calculations you're seeing are probably based upon 2009 data.

Note that the ordinary dividend hasn't changed for the last four (at least) years reported. I think the extraordinary dividend must explain most of the very high yield you're seeing.

Thanks for the input. The ADRs only trade about 15k shares a day (pink sheets) and the # of shares I want to buy would double this volume and move the price allot.