BOBU - 630, DFCU - 780, NVL - 1970, SBU - 205 UCL-250
I have already covered my sentiments about the valuations of the UCL counter in June but now things are bordering on ridiculous. The P/E ratio favoured by many people for the counter has hit 100. We are yet to see a major decline in the USE index since its inception and probably that of the exchange itself. People seem not to want to lower thier expectations on that counter. Expectations on it are even worse than those on the stanbic counter. I wonder if the Ugandan Government would bail it out in case of a collapse like the US government did for Fannie Mae and Freddie Mac earlier this week. Mark you this counter is one of the smallest in equity terms on the exchange -- not too big to fail unless we have some politicians invested there.
Interestingly, Mr Owiny the general manager of Stanbic Investments, East Africa had this to say in one of the top papers in the land (monitor) (Sept 7th 2008 in the monitor). "Uganda Clays is doubtlessly the company of the future" !!!!! I really have to spend time and find that icon for eyes rolling -- it seems well deserved here. Either he is getting ready to offload his UCL shares for stanbic investments, or something even worse. (There is a slight chance that my radar is off on this one but I wouldnt bet on that -- obviously)
Stanbic continues to see little change in share price. They have opened up thier internet banking platform to customers for a one off payment of 5000. And for the most part it works well except the feature to send email to the. They dont read the mail. Also if you need to do a transfer of more than 1 Million, well you are out of luck. They have also become more aggressive on the loan front where they will come to your office with the application forms for you to fill !
Pound rate has dropped from 3500 to about 2900 in the last 3 months. I wonder how- if at all - it will affect inflows from investors in say the UK.
DFCU. This continues to be my fav. counter. For now price still hovers around the 780-820 range for the last six months. I believe there is untapped potention in this stock. I am buying as much as possible of this. Currently I have made about 2% on this counter annualised.
BOBU Got my first dividend cheque last week. If the trend continues I may have to part with this stock next month or at 1000. Since Dec I have made 130 % return annualised on this stock. I am holding this
NVL. This has moved from 2500 to 2000 in one trading day and is now heading lower. This is as a result of rights issue shares that began trading earlier in the week. I am anxious to see and over correction so that I may jump in (around 830) !
Gold & ETF In Kenya
7 years ago
4 comments:
Clock,
Nice to see you on here and nice to find a small community of people who are into stocks knowing the wealth that can be accumulated through investing in them, especially during this virgin period. I remember when I made my first jump into UCL in February of 08' and walking around the city with a friend trying to find a broker and opening an account. I kept on trying to explain to my friend what I was trying to do and even with all my effort in the end after opening an account still do not believe he knows what/why I was doing this.
At one moment in time there is such an unawareness of the power/potential of stocks by the domestic community but then there is the group that will take out loans to invest in the market with a fervor (i.e. Safaricom.)
Now to the post. I was lucky to get into UCL with what I consider a small investment (I am not rich by any standards..yet) For me it just seemed the smart thing to do. I'd been travelling to Uganda yearly almost and recognized the construction industry was booming. With the population boom which is already playing out and the housing shortage I do not think that UCL was a bad play or will not be a bad play for many years to come.
I remember when UCL made its just from around 7,000 ugx to over the 10,000 ugx mark. I just happened to open the paper one day and thought to myself "wow". I believe they had just disclosed their financial statements and earnings.
I will admit that seeing the stock continually rise through the roof makes me a bit nervous at times and yes the exchange has not seen a major decline as of yet. Then again why should it see one....There is peace, investment and more opportunity than in the old and fading environments of the developed world.
Do you hold any UCL stock yourself I am curious? It seems that everything is going right for UCL so why should it fall? Opening of a new plant, negotiations to a joint venture in Rwanda, expansion of the board from 7 to 10 members, expansive market of S. Sudan to exploit and functioning in a region that is experiencing an acute housing shortage. I love this stock!
I personally am holding a small share of BOBU pre-split and was trying to get my hands on many more before the split after seeing how things changed for me after UCL split. The liquidity problem is definitely a nuisance that is annoying. You have money to invest, ready to invest however your broker cannot get into que in time to purchase your stocks! I will hold Baroda for some time to come. They seem to have a conservative approach to thier expansion, deposits are increasing, loans are begining to increase and financials seem solid. Call me racist but I think the Indians have this one under control and will do good things.
Never had any interest at looking at Stanbic. The stock is flat, never moves and for me that is not what I need at present.
In regards to wondering what the exchange rate means to people earning pounds and investing in Uganda...As a person living in Manchester, England it means absolutely nothing to me. The USE is where there is money to be made for not huge investments so that is where I am looking.
Jonah,
Hope all is well, I actually studied in Manchester in the late 90's - went to UMIST (now called university of Manchester) for undergrad.
I dont think the problem is that UCL is about to collapse per say, it is just that peoples expectations of it are not likely to be met. My reasons being.
1. the ROE for the last 3 years has been in the 12 - 15 % range which is low for a company with a virtual monopoly on the market.
2. Thier debt to equity has been rising since from 0.7 in 2005 to 2 in 2007. I suspect because of this there was a need for a rights issue. I worry that those funds may be mismanaged considering the intended rapid expansion and buyouts of some competitors.
3. (And most importantly) If you have a stock with a P/E ratio of 100, it means that all things being constant (ie if earnings stay roughly the same for end 2008 as 2007), then the return an investor will get will be about 1%. If earnings in 08 are double 07, then the investor will get about 2%.
To me the above seem to indicate that the stock might head down in 2009.
I do not hold any UCL shares because of point number 3. But it is true that the market can remain irrational for extremely long periods of time. If investors are not freaked out by getting 2% returns, life will continue as such until further in the future when someone realises it ...
cheers,
Carl
Are you still thinking of getting rid of BOBU? Hit 1,100 today?
Curious to know what your thoughts are.
Have been out of the country for 2 weeks.
Once I get back, first thing I do is sell my BOBU. This should be before weeks end (Fri).
I hope they broker will make the necessary split adjustments ...
Will blog about this in the next week or so. Been having a hecktic time.
-Clock
Post a Comment