Thanks, @Jace h. You may be right, but we haven’t long to wait...

Thanks, @Jace h. You may be right, but we haven’t long to wait now (7 weeks). The trading on the ASX in the lead-up to the dividend announcement on 29 February should provide a good indication of market expectations. The strong share price performance recently (from $4.81 on 19 December to $5.39 on 5 January) is a promising sign.

As you’re clearly a well-informed tracker of dividend movements I’d be interested in your views on another matter. As we’ve noted above, YAL not only pays very high dividends (relative to most) but the fact that those dividends are now fully franked adds materially to their value. That said, I was surprised to see the very sharp correction in the YAL share price last year when the shares traded ex dividend. On 14 March, the day when the shares first traded ex, the share price fell by a massive $1.16, or nearly 17% — substantially more than the value of the dividend (70c) and the implicit value of the franking credits combined. And it didn’t stop there: the share price fell further from $6.86 on 13 March to just $5.39 on 27 March — a drop of 21.4% in just two weeks.

Circumstances differ between individuals but in my own case, I would have been considerably better off last year selling my YAL shares before they traded ex (accepting any CGT implications) and then buying back at some time in the next 3-4 months (the shares traded as low as $4.38 in late June), rather than holding on to the shares and taking advantage of the franked dividends. Do you have a view, please, on whether this pattern is likely to recur this year and in the future? My own stance currently is that, if the shares spike significantly higher in the lead-up to 29 February (to $6 or beyond, say) I’ll probably sell up before the ex date and trade back in.

Would appreciate views on this, please.