Wednesday, October 08, 2008

Take Crash Positions

The Nairobi Stock Exchange (NSE) halted trading today for 15 minutes after the index fell by over 5%. (damn: just as I'm ready to sell some shares)


Safaricom: AKS says that pre-IPO shareholders lockout window has ended - so now can Vodafone start buying up some Safaricom shares and stem our losses?

Equihealth while other banks are sleeping, Equity Bank leads the way again this time venturing into health insurance. They have four plans starting as low as 6,700 (~$100 a year that include pre-existing conditions, HIV/AIDS, maternity, dental, eye-disease. (wow, medical insurance is a minefield, but Equity can sets its own terms in the industry and change the rules in the medical insurance industry)

The EDIT plans are;
- Mango @ cost Kshs. 6,700 per person per family for inpatient (Kshs. 13,300 per person for in & out patient), covers up to Kshs. 75,000
- Passion @ Kshs. 8,500 per family (Kshs. 15,100 per person for in & out patient), covers up to Kshs. 150,000
- Melon @ Kshs. 16,000 per family Kshs. 27,600 per person for in & out patient), covers up to Kshs. 500,000
- Apple @ Kshs. per family (Kshs. 35,700 per person for in & out patient), covers up to Kshs. 1 million

Scangroup: (Bharat Bank) As part of the sellout employee shareholders are seeking shareholder approval to sell up to 25% of their shares during the lockup period which is supposed to end in August 2009


Maishinski said...

I must admit it's pretty scary...

However, unlike many investors, I didn't buy shares, I bought a stake in a well managed company which I believe in.

As long as fundamentals haven't changed, and my company looks like it will still be there after 10 or 20 years, am gonna sleep soundly at night.

Stock Market crashes are not new. Bring it on.

Ssembonge said...

I'm riding it out all the way down. I don't need my money NOW. I'm in this for the long run.

Most people who bail end sitting out until the next top, rush in and get crashed again.

The big question is that is this a V, U, or L shapped global recession.

MainaT said...

Selling now is kind of self-defeating unless the plan is to stay out of stocks for good.
Agree, Ssem. It does depend on your horizon. My call is that it will most likely be a U curve but with an almost L shape it i.e. the downturn may last a 12-18 months.

ka-investor said...

mainat is right about selling now. unless you are really desperate for the cash you can waiting for a brighter day (2010).

Vodafone (& Mobitelea) can now buy as many shares as they wish to increase their holdings. And while they are at it how about doing a reverse share split as you had suggested. this Safaricom thing will kill the market!

Chebet said...

I'm just wondering if that 5% down yesterday was as a result of panic selling, Scary i agree with maishinki esp because as much as we want to belief we are not in an artificial economy, 2 or so troubled markets abroad also halted on Monday for a while, does this say something about the interconnection of these markets in regards to investors, were offshorers pulling out or what exactly caused the 5% drop?

coldtusker said...

leo... it's down BELOW 4/-... it traded as low as 3.70...

bankelele said...

Maishinski: I too am in for the long run; I just wanted to take out some money for a December project

I agree Bring it on.

Ssembonge: Long term too,
How long does an L shaped recession last?

MainaT: a year? So Co-op gets shoved aside? I saw the MD on the street yesterday, pretty relaxed

Ka-investor: Have a project in mind and I have too much banking exposure, anyway, I may let it (the project) sit

Chebet: To me, retail investors are not active traders. You may find its institutions and pensions, who bough Safcom at 7 who are panicking

Coldtusker: uh oh, time for a new post Safaricom 3’s

Anonymous said...

CIC Insurance already led the way with a product of 3600 a year... i.e. sh 10 per day.

These are the real trail blazers

HATUA said...

Will vodafone n mobitelea view safcom as that attractive to really increase there shareholdings especially with the increase competation

safcom must come up with strategy to avoid people from crossing the joke goes next safcom might fing itself making 17 million.

3nspeaks said...

I was watching another old billionaire on CNBC and he said that speculators panic when markets cycle kick to the down side, but heady investors know to stick it through because in the long term if you make good investments you will yield a good return.

i agree with everyone no need to sell now, instead this is when to buy in especially when you have fundamentally sound companies like EABL, EQTY, ARM at discount prices.

Anonymous said...


I have a question about you saying you are in this for the long-term:

So, if the stock price drops to 10 cents or even to 0 (zero) - you are not going to sell?

I'm just curious if there is a rule at the NSE that prevents one from selling their shares and then buying them back at a later time. Why would you not sell if the price is in free fall? you can always come back in later. can you not?


What are you going to talk about now that kenyans won't have the loan money to buy all those shares?

Ssembonge said...

Even without looking at their books, I can conclusively say that the share price will not go to zero. It's not like they are bankrupt.

Assuming that they lose half of their revenue to the competition, then the fair value should not drop below 3/=.

The biggest winners in this mangled IPO will certainly be those who skipped the IPO and bought at todays prices.

I know I had mentioned elsewhere that at below 5/= I would be tempted to buy only that I think I have the same oppportunity in the declining US stocks.

analysans said...

With the mkt p/e at 14 and some solid companies in the 3.5-10x range, its bargains galore for the LT investor.


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