today=history tomorrow=gone future=now
DESCRIPTION
today=history tomorrow=gone future=now. THE SECRET KNOWN BY ALL:. “The rich rule over the poor, and the borrower is servant to the lender”. PROV 22vs7. TO BE COVERED. Intibane Investment & Social Club (IISC); Johannesburg Stock (Securities) Exchange (JSE); - PowerPoint PPT PresentationTRANSCRIPT
Slide 1
today=history tomorrow=gone future=now
THE SECRET KNOWN BY ALL:The rich rule over the poor, and the borrower is servant to the lenderPROV 22vs7
TO BE COVERED Intibane Investment & Social Club (IISC); Johannesburg Stock (Securities) Exchange (JSE); BB-BEE (incl MTN Zakhele Deal) and Questions
an introduction and an insightIntibane Investment & Social Club (IISC)
an introductionIntibane Investment & Social Club (IISC)
an insightIntibane Investment & Social Club (IISC)
an insightIntibane Investment & Social Club (IISC)
an insightIntibane Investment & Social Club (IISC)
an insightIntibane Investment & Social Club (IISC)
an insightIntibane Investment & Social Club (IISC)
THE JSE
THE JSEbuilding, running, listing & exiting a business
JabuPaulNancyPortia
THE JSEBuza-Kithi Capital (Pty) Ltd
THE JSEmajor players hiredMAJOR PLAYERS Investment and Merchant BankerTransfer SecretaryAttorneysReporting AccountantsLegal & Tax Advisors
THE JSE
THE JSEPROV 22vs7
THE JSEa company is being owned by the masses: ME & YOU
making money on sharesTHE JSECapital GainDividend Payout
share ownershipJSEshare ownership means owning a portion of the business, and is rewarded by dividends when profits are made, but high risk when the business is doing badly
capital gainJSE Peter buys 100 FSR shares on 1 Jan 2010 at R20 per share = R2 000 Peter sells 100 FSR shares on 31 Dec 2010 at R25 per share = R2 500 Peter has made a capital gain of R500 in 1 year
Equals 25%
market capitalisationJSE= number of shares issued X price per share
market capitalisationJSEnote the difference between authorised and issued shares
market capitalisationJSECATEGORIES (MAIN BOARD)LARGE CAPS (BLUE CHIPS)MID-CAPSSMALL CAPSALT- X
indixes/indicesJSE FTSE/All Share Index (J203) Top 40 Index Dow Jones S&P500NASDAQ DAX CAC
25
OTHER FACTS ABOUT JSELargest SSF market in volumeTake-over of BESA69 319 trades a dayWorld 20 largest exchangeCorn futures endorsed by CBOTAppr R10 bln traded daily (VS R696 bln traded at NYSE)REVENUE STREAMS (2008)THE JSE
the alternativesTHE JSE trading account with the local bank (FNB, Standard Bank, etc) visit the local stockbroker: Sasfin Frankel Pollock Investec PSG Konsult phone any stock-broking firm in SA or oversaes: Rand Merchant Bank (RMB) Cadiz etc open you own trading account on internet (ie www.sharetrakin.com)
fees on R10 000JSECOSTAMOUNTBrokerage feesR50StrateR10.92Securities Transfer Tax (STT)R25.00Investor Protection LevyR0.02VatR8.53Total FeesR94.47Dealing Cost Percentage0.94%
THE RATIONALE FOR BB-BEEThe definition of B-BBEE by dti:
an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the numbers of Black people that manage, own and control the countrys economy, as well as significant decreases in income inequalities
BEE & FDI:
BUSINESS CONFIDENCE INDEX:
BEE & FAILURE:Reasons for failure of some BEE transactions:Narrow focus of ownership controlLack of effective integrationExcessive imbalance between partnersLack of trustFundingComplex financial structures
BB-BEE: THE OVERALL
Broad Based - BEEfunding
BB-BEEthe banks
BB-BEEthe banks
BB-BEEthe banks
BB-BEEthe banks, an oligopolyConditions for successful collusion:Small number of firms & known to each otherSimilar production methods & average costsHomogeneous productsSignificant barriers to entryStable marketNo government intervention to prohibit collusionOligopolists also sometime compete on the basis of advertising, product development, etcPrice competition is often avoidedMore aggressive competition affect profitability
BB-BEEbanks & deal making SA banks are in an extremely powerful position; serious lack of competition (they pick the deals they like); deals are structured in a skewed and unfair manner; deals are sometimes extremely complex; strong relationship between owners of banks and the companies that are issuing stakes; limited consequences to the banks when the deals fail; a too conservative outlook from the banks; steep fee structure and lack of competition sustain the most arrogant banking houses;
we want more Capitec, TEBA, African Bank, to enhance competition.
an analysis (the facts)MTN Zakhele BB-BEE Deal number of shares : 80 900 000 MTN shares IS NOT EQUAL TO MTN Zakhele Shares minimum subscription : 100 MTN Zenzele Shareswhich amounts to R2,000 the deal will be off : when money raised through Zakhele is below R 429 mln. Deal start : 09H00 (30 August 2010) Deal ends : 16H00 (14 October 2010) deal size: 4% of MTN
an analysis (the facts)MTN Zenzele BB-BEE Deal
funding of the dealMTN Zakhele BB-BEE Deal money raised from the public; MTN donation; Notional vendor finance; Third party bank funding
funding of the dealMTN Zakhele BB-BEE Deal money raised from the public; MTN donation; Notional vendor finance; Third party bank funding funding of the dealMTN Zakhele BB-BEE DealFUNDERSMTNBLACK PUBLICBFCMTNPICVARIOUSMTN ZAKHELE
the underlying values estimatesMTN Zakhele BB-BEE DealMTN share priceMTN Zakhele underlying valueR80.00R8.09R90.00R17.40R100R26.72R110.00R36.03R120.00R45.35R130.00R54.66
can I loose everythingMTN Zakhele BB-BEE DealYou can ultimately loose all OR part of the investment,this is an investment after-all.pooling funding togetherMTN Zakhele BB-BEE Deal TOTAL (R million)R per MTN shareEQUITY FROM ZAKHELER 1,618R20.00UPFRONT COSTS(R189)(R2.33)MTN DONATIONR1,294R16.00BIC PREF SHARES(R2,160)R26.70VENDOR FINANCER3,214R39.73
what has MTN done for meMTN Zakhele BB-BEE Deal MTN will donate R80 for every R100 provided by Black public MTN has arranged R3.2 bln from vendor finance MTN has assisted MTN Zakhele to source R2.1 bln from third part lenders MTN has been instrumental in negotiating with PIC to sell their MTN shares
in perspectiveMTN Zakhele BB-BEE DealFor every R2 000 that you invest, MTN will be able to invest R10 010 into MTN shares.
In other words:
For every R100 that you put in, MTN and funders will put in another R400 into your MTN investment
the minimums & maximumsMTN Zakhele BB-BEE Deal 100 shares at R20 per share = R2 000 you can then add R100 worth of shares with no maximum
the trading restrictionsMTN Zakhele BB-BEE Deal first three (3) years, you cannot sell your Zakhele sharesyear 4 six, you can sell to Black shareholders (BIC) subject to approval by BSTC. during the first six years, you cannot use your Zakhele shares as a security. after 6 years you can do what you like with your Zakhele shares
your Zakhele shares will only trade in the OTC market.
who are these guys?MTN R127.75 is the last share price from +/- R50 in 2006 R235 bln in market capitalisation P:E ratio of 15.5 Dividend yield of 2.66 ROE of 24.26 Authorised shares = 2.5 billion Issued shares = 1.8 billion
We simply attempt to be fearful when others are greedy, and to be greedy when others are fearfulIN CLOSING
Anything that CANNOTgo on foreverWILL endPLEASE THINK THIS OVER
THE COMMENT:if a free society cannot help the many that are poor, it cannot save the few that are richJohn F. Kennedy
THE COMMENT:WHEN SHALL EVER BE PEACE IN ATHENS?
WHEN THOSE THAT DO NOT SUFFER ARE AS ANGRY AS THOSE THAT DO.
QUESTIONS