KARACHI, June 19: The government expects to earn dividend of Rs82 billion for the financial year 2008-09, from its investment in the stock market. Holder of almost half of the market, the government supplemented its income through dividend earnings of Rs78.7 billion in 2007-08.

The budget documents for 2008-09 projected 4 per cent higher earnings in returns from the government’s investment in the stock market listed companies, over what it made in the year to end on June 30, 2008. Given the bottomless pit to which the equity market is currently heading, many analysts are taking a conservative view over the government’s expectations on corporate earnings growth and therefore their propensity to pay higher dividends.

Analyst Syed Abid Ali at Taurus Securities has worked out the per share dividend of listed companies budgeted for 2008-09 (in which the government holds considerable stake).

OGDC is expected to provide dividend per share at Rs10.94, which would give a yield of 8.65 per cent; followed by SNGPL with dividend at Rs3.04 and yield at 6.44 per cent; PSO dividend at Rs22.85 and yield at 5.35 per cent; FFL per share dividend at Rs12; yield at 4.54 per cent; SSGC per share dividend at Rs1.13; yield at 4.26pc; NBP dividend at Rs6.51, yield at 3.95 per cent; PTCL per share dividend at Rs1.32; yield at 3.22pc; ABL dividend Rs1.99; yield 2.51pc; PNSC dividend Rs1.70 per share; yield 2.30pc and Mari Gas per share dividend for the upcoming year has been projected by the government at Rs3.13, which would provide a yield at 1.06pc.

Taurus Securities thought that the budgeted numbers for FY09 were “reasonable and achievable”, as they were quite in line with the past trend. But many other analysts expect a dip in corporate profitability. They feel that the calculations were made by the government in better times.

“The stock market has lost nearly a quarter of its value in two months,” says a stock strategist. With no end to the gloom and doom scenario and the worrisome government deficit numbers, all listed companies including those in which the state holds controlling stake, would be hard pressed to keep up their earnings growth for the FY08-09.