Never Miss IPO Ever Again! U JUST LOST Tsh. 25M in Profits!

Above is Tanga Cement industry which has rewarded more than 700% to her IPO investors!



Since 1998 Eleven Tanzanian companies have been listed on the Dar es salaam stock Exchange(DSE) and other five Kenyan companies cross listed on the market hence bringing the number of trading companies to Sixteen. Most of Tanzanian listed companies have performed so well in one decade and still they are showing a great prospect in the future. With companies like Tanga Cement Company(SIMBA) have give return of 580% on capital gain and more than 100% in dividend payouts grossing to 700%.This is real wealth creation! Had you invested Tsh. 1,000,000 today you would be having an asset worth TZS 6.8 Million! and more than TZS 1 million in dividends payments. Other companies which have enormously performed well include TCC,Twiga and TBL. I used to belive that these great returns are entitled to reach guys but now i realize that I could've tapped these opportunities too! Anyway i know its Just the begining and i'm happy to have discovered this priceless apparent truth!

In my simple research I've discovered that Entrance at IPO level is much safer and according to DSE Data out of eleven listed companies only two companies have done not so well since being listed(TOL and NICOL) others have rewarded returns in hundreds percent!

Would you have invested TZS 1 million in every IPO in the past Ten years you will have garnered a lot of wealth! Actually the money will have Tripled to more than TZS 35 Million being capital gain & dividends paid to investors! I'm sure it will not have costed you much collecting a million for a great investment opportunity! Where is the money you raised for your colorful wedding? birthday? or graduation party? where is the money you squandered now! You could have built a great asset base with the little money you had or just by cutting a bit of your good time budget.I don't want to advice you to forgo your great moments but an element of caution should haunt you always so as to balance your present and future.

Nairobi stock exchange has more than Fifty(50) Listed companies. If Tanzania market(DSE) will pull herself to list that number then we have just started investing and we have Known the truth at the right hour.

There are some good friends, who don't like to think outside their box. They keep on criticizing stocks holding over real estate and other ventures. Anyway, swahili people have a say that, 'ukimuamsha aliyelala utalala wewe' i dont wanna wake you up buddy, just keep on. Can you buy real estate for TZS 1 million? Can you start a hussle free business for TZS 1 million? its definitely impossible unless you have that magical formula! But you can buy a piece a well run business with Products,Systems and Teams working around the clock for you to get your value. Thats why i keep on insisting on a broader approach rather than myopic one. My idiosyncrasy sometimes get over but i hope you will bear with me.

For investment fools, IPO stands for Initial Public Offer and it means the moment which companies invite the public to subscribe for ordinary shares before listing on the stock market. IPO comes when companies require to raise new capital or when investors or the government wants to reduce/offload her/his shareholding by cashing in on IPO. Most of the IPOs in Tanzania have happened because the government wanted to cut her investment in companies. However, fewer have been for raising additional capital.

Just see below inset for further information about the performance of Listed companies on the stock Market.

Lastly, i've come to realize that there are rich and supper rich guys in Tanzania and East Africa who have just gotten there genuinely and no one should ever dare to question their Fortune. These people have gotten rich just by knowing the truth earlier than you and me.Fortunately, we have discovered the secret and soon we will share the cake. Always remember that temperate value investors will champion over a long run.

by Emmanuel Akyoo
Epak Capital Limited.

NICOL RISK BEING DE-LISTED! & FUNNY VALUATION OF NICOL

National Investment Company Limited(NICOL) risk being de-listed on the Dar bourse due to failure of filing financial statements with the regulating bodies CMSA and DSE. This has lead to a month trade suspension on the stock market(DSE) and an ultimatum to file the reports for financial year 2009 and 2010 within the same month.

BELOW IS AN EXTRACT FROM NICOL'S WEBSITE:

On the 26th of February 2011 NICOL Shareholders met and made certain important decisions regarding the future of their company. CMSA did not agree with the Shareholders’ decisions, and instead CMSA issued an order for the removal of the NICOL Board and its CEO. NICOL has therefore filed a lawsuit against CMSA and has taken the Shareholders’ claims to their rights to the High Court. A decision from the Court is expected on 10th of May 2011, and as soon as that decision has been rendered, NICOL will be communicating with its Shareholders as appropriate.

Any Shareholder unable to attend the meeting of 26th February should feel free to contact the NICOL offices for copies of all documents and presentations given at that meeting.



I've got some questions to NICOL's Management!

1.Why since inception of the company a couple of years ago they have not paid dividend?
2.Why do they get into conflict with regulatory bodies? I it the only listed company?
3.After investing a couple of billions in the defunct companies, why should they tell us that they want to sell holding in NMB to diversify? how can we belive them? they have invested severally and failed!

NICOL has failed to fulfill their promises to Tanzanian investors and now they are confused!I do remember their countrywide trips to raise capital which costed millions of shareholders money, and millions of listing expenses! Why is the board of Director not complying with regulatory bodies? There must be something fishy behind these unacceptable behavior!

FUNNY MARKET VALUATION OF NICOL!

Following the above list of shareholders, NICOL holds 6.6% of NMB Bank and current market value of the bank is Tsh415bln therefore equivalent holding of NICOL in NMB is valued at Tsh27.39bln. Amazingly, NICOL market valuation is standing at TSh 16.95bln.Had NICOL being holding only NMB it would be currently be Undervalued by the staggering Tsh 10bln.However, Nicol is holding other investments therefore the undervaluation may be even bigger! Why are the shareholders denied this value? Management of NICOL should be responsible for this gross undervaluation of the company! Would the management of NICOL be reliable one could buy NMB Shares via NICOL and hence activate the dormant NICOL's share exchange desk!

Finally, I commend and extend my sincere thanks to the regulators for standing firm to protect shareholders of NICOL! And also would like to urge CMSA and DSE not to de-list the poor managed company rather shareholders should look for non-politicians to lead and manage the company. De-listing would be a death blow to poor shareholders in upcountry who barely follow up NICOL's operations!

DAR ES SALAAM COMMUNITY BANK(DCB) ANNUAL GENERAL MEETING
DCB Annual General meeting(AGM) held on 29/May/2011. Shareholders received management reports,elected new directors and discussed several matters pertaining to the development of the bank. DCB's shares have soared recently from market price of Tsh280/share in February 2011 to Tsh460/share in the start of June 2011 an equivalent of 64% capital gain.Also, AGM meeting approved dividend payment of Tsh48 per share to shareholders.(Picture by Emmanuel Akyoo)

INFLATION AN INVISIBLE ENEMY!

It came into my attention that we should discuss a bit about an invisible element of our economy called inflation. Most of us we are currently experiencing painful bites of inflation due to the fact that our incomes are fixed(pegged to a certain rate per month) and not floating ones. One year ago one could buy 10Kg of sugar for TZS 15,000 at TZS 1500/Kg but with current prices(TZS 2000/Kg) one can only buy 7.5Kg for same TZS 15,000; inflation has taken away 2.5kgs! Same example can be discussed in terms of petroleum and diesel and you may be supprised how low your purchasing power has fallen. So this is what I want to discus with you as a potential investor. We better start bargaining from commodities point of view if we are to survive well in economies with high inflation. One year ago, would i have bargained to be paid 1000 liters of Petroleum per month my salary automatically would have moved from Tzs 1.5million to 2.2Million using current BP pump prices, I would just urge my employer to read the nearest pump price before paying me. Unfortunately, systems are set to profit from our utter ignorance,in hyper-inflated economies money does not make sense at all!

Inflation can simply be defined as the rate of increase in prices of products and services in the economy.Example of inflation is current rise in bus fares,food prices, rent, fuel prices,real estate, etc as we have seen in the example above.

INFLATION from investor's point of view is a lethal weapon! This is because a serious investor has two obligations, One to protect his capital and second to maintain fair return on his/her investment. With inflated economy one may lose value of his/her investment because to protect capital he/she should maintain return on investment which is hire than the rate of inflation. With current(April 2011) 8.5% inflation rate, already our savings at bank attracting 6% interest we are losing 2.5% to inflation, what a mess! Instead of saving money into your bank account why cant you buy some gold,silver,copper,maize,beans,Petroleum or diesel? Therefore conserving the value of your money you should be working around the clock to beat inflation. Also, to gain fair return on your investment is another obligation which may not be so easy if you slack around! What's a fair return? This depends on the investors perspective but averagely it may be gaining an edge on the average market return. In advance markets they use DOW,S&P 500 or NASDAQ indexes to measure their performance.

How do my investors hedge themselves against the wrath of inflation? As we have seen earlier that in economies with high rate of inflation money does not make sense then whatever excess cash should be directed to the factors that respond positively with inflation. Factors that moves with inflation are STOCKS,COMMODITIES and REAL ESTATE.

STOCKS: If you have some excess money/cash that can not afford buying a piece of real estate or which you will need in a couple of years ahead you can stash it in stocks especially in the companies that mostly deal with commodities like beer, cigaret, tea, etc because they can easily fight inflation by adjusting their product prices. Among the advantages of this way is that any excess amount whether a lot or little can be hedged well.

COMMODITIES: If you are a business person you may look for ways of stocking commodities that are on the inflation roller coaster! Also, for the big guys you may start hedging by buying gold,silver,copper and other exchange traded minerals. for example if tanzania
Central bank stocked Gold instead of USD dollars, Tanzania would be profiteering from the current high gold prices.

REAL ESTATE: Real estate has being performing well in hyperinflation most of the times. However, lack of city plans,ownership titles and lack of pricing model/mechanism pose a great risk to investors. One can difficultly determine the market price of a piece of real estate, this poses a risk of paying more than the market price. However for experts real estate poses a great opportunity as well.

Well, these ways are not conclusive but are among the most applied mechanisms in mitigating risks posed by inflation.

I would like to advice you to choose one of the tricks discussed above to protect your purchasing power and enriching your self. Just remember that, Cash in Hyperinflation economy is not a good commodity or a good storage of value!

Emmanuel Akyoo,
Managing Director,
Epak Capital Ltd.