MSCI Taiwan Index- A case study on the COVID-19-induced ex-dividend date disruption

Key implications

• Taiwan's COVID-19-induced annual general meeting (AGM) shift this year has impacted nearly all (except one case) the AGMs, but not all the ex-dividend dates (XDs, around 66%). The dividend approval policy (AGM or board approval) adopted by each company played a decisive part in XD shift.
• There was a clearly defined legal boundary that presented an option for companies paying cash dividends only (87%) to shield XD risk during this year's crisis, but only 34% of companies amended the change in the articles of incorporation ahead of time.
• The XD pattern of companies with board approval policy were therefore not impacted by the crisis and we forecast their FY 2021 XDs with a high confidence rank, with just a few exceptions.
• Companies with an AGM approval policy, however, managed the crisis through varying strategies under the same goal of giving as much clarity on XDs as possible. Companies that maintained a historical AGM-XD gap or fixed XDs close to the same date with last year are believed to follow the pattern before the crisis for FY 2021's XDs with a medium confidence rank. Companies that flexibly fixed their XDs within one to two weeks after the new AGM (earlier than the AGM-XD gap) this year are estimated to follow the FY 2019's XDs pattern as well, but with a low confidence rank.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.