Funds mull Nokia stop to dividend for first time in 143 years

Funds invested in Finnish equity will have to do without a dividend from Nokia for the first time since the 1870s, after the company reported slow improvement in operating profitability across its telecommunications network equipment and mobile phone businesses.

The decision not to pay a dividend following the fourth quarter results for 2012 is intended to maintain the company’s cash pile, which is seen as important to assuage bond investors, as well as being necessary to maintain competitiveness against rivals such as Apple. The US company’s shares fell about 10% after it reported sales of its iPhone product that did not meet market expectations, but it still sold about ten times as many of these as the equivalent smartphones from Nokia. The Finnish company once had a 50% global market share in mobile phone handsets.

The company said in a statement that: “To ensure strategic flexibility, the Nokia Board of Directors will propose that no dividend payment will be made for 2012 (€0.20 per share for 2011). Nokia’s Q4 financial performance combined with this dividend proposal further solidifies the company’s strong liquidity position.”

According to news agency Bloomberg, records indicate Nokia has paid a divided every year since 1871, through World Wars and the breakup of the Soviet Union, then a large trading partner of Finland.

Although any 2012 dividend would likely have been small, given Nokia’s finances overall, the move means investors have to rely on gains in the stock’s share price to obtain a return. The price has risen in the wake of the dividend announcement, but remains about 80% off its peak.

Funds data from FE shows some 30 active and passive funds with exposure to Nokia ranging from just over 1% up to about 9.5%. 

Fund Holding % NOKIA CORP
CB – Accent Income EUR – Sep 99 (F2I3) 1.34
FIM – Brands – May 00 (A9I2) 2.7
DKB – Zukunfts – Aug 07 (CAA1) 2.77
DJE – LuxTopic Aktien Europa – Jun 03 (MJN5) 2.89
Gerling – Mayerhofer Strategie AMI – Dec 11 (F02Z) 3.45
Oppenheim – PTAM Defensive Portfolio – Aug 06 (O105) 3.47
Oppenheim – PTAM Balanced Portfolio OP EUR – Oct 98 (OD63) 3.48
Lemanik – Alpha Beta Sigma – Feb 07 (Q720) 3.95
Alceda – FU Fonds – Multi Asset – Oct 08 (F7C9) 4.26
Evli – Finland Select – Jan 02 (R814) 4.31
Gerling – Geneon Invest Euro Aktien AMI – Oct 09 (GXI2) 4.69
HEL – JP Morgan European Technology – Jul 00 (HI82) 4.8
HIL – JP Morgan European Technology – Jul 00 (HJ82) 4.8
Private Estate – JPM Europe Technology – Jan 02 (PD63) 4.8
JPM – Europe Technology – Nov 99 (RT56) 4.8
Aurum – JPM Europe Technology – Apr 06 (ZN61) 4.8
FIM – Nordic – May 01 (A9H8) 5
Danske Inv – Finnish Equity – Oct 87 (GWR8) 5.54
Hansa – HI Zert Global D&P – Sep 06 (H723) 5.96
Skandia – Odin Finland – Apr 95 (S387) 6.01
Odin – Finland – Jan 07 (O040) 6.01
Sampo – Finland Value – Oct 05 (GWT3) 6.06
Universal Investment – morgen Aktien Global UI – Jan 95 (UJ55) 6.19
ComStage – DJ STOXX 600 Technology – Sep 08 (HZR7) 6.49
DB X-Trackers – Stoxx Europe 600 Technology ETF – Nov 08 (DTB2) 6.54
DB X-Trackers – Stoxx Europe 600 Technology Short Daily ETF – Nov 08 (DTB3) 6.54
Danske Inv – Finnish Institutional Equity – Oct 97 (GYI9) 7.51
Lemanik – Value Opportunities – Sep 03 (LK13) 8.02
FIM – Fenno – Aug 98 (A9H1) 8.9
iShares – MSCI Finland Capped Investable Market Index – Jan 12 (0QTN) 9.51

 

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