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enyands
#211 Posted : Wednesday, May 13, 2015 7:45:23 PM
Rank: Elder

Joined: 12/25/2014
Posts: 2,301
Location: kenya
murchr wrote:
enyands wrote:
murchr wrote:
Pirate wrote:
murchr wrote:
MaichBlack wrote:
Stract_Consulting wrote:
murchr wrote:
MaichBlack wrote:
murchr wrote:
MaichBlack wrote:
Stract_Consulting wrote:
Following the AGM held on 28th February 2015, the following were reviewed and adopted as resolutions:

1.The share price adjustment will be pegged on the performance of the Society in the previous year.
2. Based on #1 above the share price was adjusted to Ksh.350 from Ksh.280. This is effective from 28th Feb 2015
3. The rebates will be distributed on a 65% plough back and 35% payout ratio. Payment will start from 11th March to 31st March 2015.
4. The Board size to expand to 9 from the current 7. This is effective from 2016
5. One slot in the Board is to be assigned to members who are non-Safaricom staff
6. Eligibility to the Board to change from 2years membership to 3years membership. Other terms remain unchanged.
7. Joining fees for groups adjusted to Ksh. 30,000 from the previous Ksh. 15,000.
8. All groups are to make a minimum monthly payment of Ksh.15,000 being Ksh.3,000 per member.
9. Groups are to make contributions per member at the rate of Ksh.3,000 per member

These questions are directed to all "chair" holders

1) I want to get in just before the next AGM. That means I buy at 350/=, right? Yes 300 shares at 350 ea

2) How will my dividends be calculated? 100% or prorated (to almost 0% if I join just before the AGM)? depends on when you get in, ref BGL answered this above

3) If the dividends are prorated, how does that affect (3) above - i.e. plough back and payout? What if my prorated dividend is not enough to plough back (65%). What then? Do you ask me for top up or I end up with "class B" shares [Highly unlikely!]

4) Am I eligible as a non Safcom individual. Yes tho you may need to be introduced by a member

5) What if I want to get out (not that I am planning to)? Is there an exit procedure? share buy back etc. Yes, shares are floated every Tuesday I guess


Check out their webpage sic.co.ke

Thanks bro. Very helpful. Only thing remaining is my 3rd question.


Cheers! I'd like to know the answer of that too...I just joined. smile


3) If the dividends are prorated, how does that affect (3) above - i.e. plough back and payout? What if my prorated dividend is not enough to plough back (65%). What then? Do you ask me for top up or I end up with "class B" shares [Highly unlikely!]
There is no way your dividend will not be enough to be ploughed back. For example if your dividend is KSH10, then Kshs 6.5 worth of shares will be ploughed back. Remember that SIC provides shares in decimal places. So you might end up with 0.02 shares

So they re - invest my 6.5 and probably your 65 and we BOTH end up with shares worth say 425/= each the following year?


You are not clear Maich


Gents,

I have been a member of SIC for 3 yrs , let me attempt to break it down.

This year SIC made 27% profit and declared div of 25% of which ratio of div ploughed back: cash payout was 65:35 . Meaning if you had shares worth 100,000 , dividend would be 25,000 of which 16,250 is re-invested (@ Kes 270/share ) and 8,750 is paid cash.

You have an option to reinvest the 8,750 (@270/share) .
The share price was then revised up by 25% to 350 and instantly your 'slaves 'are worth ,10,970 + 20,312 = 31,282 if you decided to reinvest . smile smile


Pirate, thank you for your response. Apart from statements is there another way of viewing your account information eg an online account?


@murchr what's your email address ? Wanna consult you on something. Thanks in advance


Give me yours

nyangshe at gmail dot com
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murchr
#212 Posted : Wednesday, May 13, 2015 7:47:47 PM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
MaichBlack wrote:
On a different note, the method they use to calculate the new price is flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 270/=

Dividend: 25% * 270 = 67.5/=

Re-invested = 65% * 67.5 = 43.875/=

Paid = 35% * 67.5 = 23.625/=

From my mathematics:

New Price = Old price + reinvested amount
= 270 + 43.875
= Ksh 313/=

You cannot add the whole 67.5 to get the new price because you have already taken out 23.625/=

And even if you use the whole 67.5/= (which you shouldn't) you still get 337.5/=. Go even further and use the whole 27% you still get 342.9/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 313/= NOT 350/=

On the flip side, people immediately re-investing the slaves are making double killing. I don't see why one would EVER take the money.Re-invest and sell almost immediately (if you must) and get approx. 25% more cash!!!


Work with 280. The price last year was 280/- not 270/- as stated by pirate
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
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Pirate
#213 Posted : Thursday, May 14, 2015 9:38:26 AM
Rank: Member

Joined: 4/4/2007
Posts: 91
murchr wrote:
MaichBlack wrote:
On a different note, the method they use to calculate the new price is flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 270/=

Dividend: 25% * 270 = 67.5/=

Re-invested = 65% * 67.5 = 43.875/=

Paid = 35% * 67.5 = 23.625/=

From my mathematics:

New Price = Old price + reinvested amount
= 270 + 43.875
= Ksh 313/=

You cannot add the whole 67.5 to get the new price because you have already taken out 23.625/=

And even if you use the whole 67.5/= (which you shouldn't) you still get 337.5/=. Go even further and use the whole 27% you still get 342.9/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 313/= NOT 350/=

On the flip side, people immediately re-investing the slaves are making double killing. I don't see why one would EVER take the money.Re-invest and sell almost immediately (if you must) and get approx. 25% more cash!!!


Work with 280. The price last year was 280/- not 270/- as stated by pirate


Ooops, my bad .. Correct. 280
Knowledge is power , but action gets things done ...
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Pirate
#214 Posted : Thursday, May 14, 2015 9:41:55 AM
Rank: Member

Joined: 4/4/2007
Posts: 91
murchr wrote:
Pirate wrote:
murchr wrote:
MaichBlack wrote:
Stract_Consulting wrote:
murchr wrote:
MaichBlack wrote:
murchr wrote:
MaichBlack wrote:
Stract_Consulting wrote:
Following the AGM held on 28th February 2015, the following were reviewed and adopted as resolutions:

1.The share price adjustment will be pegged on the performance of the Society in the previous year.
2. Based on #1 above the share price was adjusted to Ksh.350 from Ksh.280. This is effective from 28th Feb 2015
3. The rebates will be distributed on a 65% plough back and 35% payout ratio. Payment will start from 11th March to 31st March 2015.
4. The Board size to expand to 9 from the current 7. This is effective from 2016
5. One slot in the Board is to be assigned to members who are non-Safaricom staff
6. Eligibility to the Board to change from 2years membership to 3years membership. Other terms remain unchanged.
7. Joining fees for groups adjusted to Ksh. 30,000 from the previous Ksh. 15,000.
8. All groups are to make a minimum monthly payment of Ksh.15,000 being Ksh.3,000 per member.
9. Groups are to make contributions per member at the rate of Ksh.3,000 per member

These questions are directed to all "chair" holders

1) I want to get in just before the next AGM. That means I buy at 350/=, right? Yes 300 shares at 350 ea

2) How will my dividends be calculated? 100% or prorated (to almost 0% if I join just before the AGM)? depends on when you get in, ref BGL answered this above

3) If the dividends are prorated, how does that affect (3) above - i.e. plough back and payout? What if my prorated dividend is not enough to plough back (65%). What then? Do you ask me for top up or I end up with "class B" shares [Highly unlikely!]

4) Am I eligible as a non Safcom individual. Yes tho you may need to be introduced by a member

5) What if I want to get out (not that I am planning to)? Is there an exit procedure? share buy back etc. Yes, shares are floated every Tuesday I guess


Check out their webpage sic.co.ke

Thanks bro. Very helpful. Only thing remaining is my 3rd question.


Cheers! I'd like to know the answer of that too...I just joined. smile


3) If the dividends are prorated, how does that affect (3) above - i.e. plough back and payout? What if my prorated dividend is not enough to plough back (65%). What then? Do you ask me for top up or I end up with "class B" shares [Highly unlikely!]
There is no way your dividend will not be enough to be ploughed back. For example if your dividend is KSH10, then Kshs 6.5 worth of shares will be ploughed back. Remember that SIC provides shares in decimal places. So you might end up with 0.02 shares

So they re - invest my 6.5 and probably your 65 and we BOTH end up with shares worth say 425/= each the following year?


You are not clear Maich


Gents,

I have been a member of SIC for 3 yrs , let me attempt to break it down.

This year SIC made 27% profit and declared div of 25% of which ratio of div ploughed back: cash payout was 65:35 . Meaning if you had shares worth 100,000 , dividend would be 25,000 of which 16,250 is re-invested (@ Kes 270/share ) and 8,750 is paid cash.

You have an option to reinvest the 8,750 (@270/share) .
The share price was then revised up by 25% to 350 and instantly your 'slaves 'are worth ,10,970 + 20,312 = 31,282 if you decided to reinvest . smile smile


Pirate, thank you for your response. Apart from statements is there another way of viewing your account information eg an online account?


Currently no. You have to rely on online statements
Knowledge is power , but action gets things done ...
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Pirate
#215 Posted : Thursday, May 14, 2015 9:47:19 AM
Rank: Member

Joined: 4/4/2007
Posts: 91
MaichBlack wrote:
On a different note, the method they use to calculate the new price is flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 270/=

Dividend: 25% * 270 = 67.5/=

Re-invested = 65% * 67.5 = 43.875/=

Paid = 35% * 67.5 = 23.625/=

From my mathematics:

New Price = Old price + reinvested amount
= 270 + 43.875
= Ksh 313/=

You cannot add the whole 67.5 to get the new price because you have already taken out 23.625/=

And even if you use the whole 67.5/= (which you shouldn't) you still get 337.5/=. Go even further and use the whole 27% you still get 342.9/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 313/= NOT 350/=

On the flip side, people immediately re-investing the slaves are making double killing. I don't see why one would EVER take the money.Re-invest and sell almost immediately (if you must) and get approx. 25% more cash!!!


For share valuation as from 2014-2015 , SIC are matching dividend declared : share increase at 1:1

So 25% dividends + 25% share revaluation makes a generous 50% return on investment .. Hence the 350 .

Knowledge is power , but action gets things done ...
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  | | Edit by user: Thursday, May 14, 2015 9:48 AM | Reason: Not specified
MaichBlack
#216 Posted : Thursday, May 14, 2015 10:13:05 AM
Rank: Elder

Joined: 7/22/2009
Posts: 7,838
Calculations redone using 280/= as advised by @murchr

The method they use to calculate the new price is still flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 280/=

Dividend: 25% * 280 = 70/=

Re-invested = 65% * 70 = 45.5/=

Paid = 35% * 70 = 24.5/=

From my mathematics:

New Price = Old price + reinvested amount
= 280 + 45.5
= Ksh 325.5/=

You cannot add the whole 70/= to get the new price because you have already taken out 24.5/=

These guys added the whole 70/= to 280/= to get 350/= ignoring the fact that they had already paid out 24.5/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 325.5/= NOT 350/=

And it get worse!!!

From these calculations, you should remain with the same number of shares but now worth 325.5/=. But in this case (what they are doing), you end up with more shares, valued at a higher price (350/=)!

Simple case:

Say you had 10,000 shares worth 280/=

Your dividends are 10,000 * 280 * 25% = 700,000/=

re-capitalized = 65% * 700,000 = 455,000/=

Cash paid = 25% * 700,000 = 175,000/=

Number of new shares allocated = 455,000 / 280 = 1,625/=

Total Number of Shares = 10,000 + 1,625 = 11,625

Price Changes immediately to 350/=, so now the value of your shares is:

11,625 * 350 = 4,068,750/=

Add 175,000 cash and you have 4,068,750 + 175,000 = 4,243,750/=

But the real value is (10,000 * 280) + (10,000 * 280 * 25%) = 3,500,000/=

=> The first bracket is for original value. The second one is for the total prorated profit attributable to your shares.

Your shares are now overvalued by 4,068,750 - 3,500,000 = 568,750/=

And that is just in the first year! And remember this will be compounded every year.

If you re-invest all your earnings:-

Number of new shares allocated = 700,000 / 280 = 2,500/=

Total Number of Shares = 10,000 + 2,500 = 12,500

Price Changes immediately to 350/=, so now the value of your shares is:

12,500 * 350 = 4,375,000/=

Your shares are now overvalued by 4,375,000 - 3,500,000 = 875,000/=

Then compound that annually.

They need a mathematician down there if not a finance guy!!!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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MaichBlack
#217 Posted : Thursday, May 14, 2015 10:20:43 AM
Rank: Elder

Joined: 7/22/2009
Posts: 7,838
Pirate wrote:
MaichBlack wrote:
On a different note, the method they use to calculate the new price is flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 270/=

Dividend: 25% * 270 = 67.5/=

Re-invested = 65% * 67.5 = 43.875/=

Paid = 35% * 67.5 = 23.625/=

From my mathematics:

New Price = Old price + reinvested amount
= 270 + 43.875
= Ksh 313/=

You cannot add the whole 67.5 to get the new price because you have already taken out 23.625/=

And even if you use the whole 67.5/= (which you shouldn't) you still get 337.5/=. Go even further and use the whole 27% you still get 342.9/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 313/= NOT 350/=

On the flip side, people immediately re-investing the slaves are making double killing. I don't see why one would EVER take the money.Re-invest and sell almost immediately (if you must) and get approx. 25% more cash!!!


For share valuation as from 2014-2015 , SIC are matching dividend declared : share increase at 1:1

So 25% dividends + 25% share revaluation makes a generous 50% return on investment .. Hence the 350 .


Therein lies the problem. You don't re-evaluate the share price by simply making public pronouncements!! It must be backed up by mathematics/fundamentals/sound financial backing.

Why would I want to own a share worth 500/= on paper and 50/= in reality.

If you are a Mumias shareholder, would you be okay if the MD woke up one day and "re-evaluated" the share price to 15/= (Assuming it was allowed) - and assuming your plan is not to sell?

Please note: They made 25% (or is it 27%) in profit. How do you end up with 50% return on investment??? Where does the rest of the money come from. You can never have return on investment being double the actual profit made. Not unless someone is printing money!!!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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  | | Edit by user: Thursday, May 14, 2015 10:23 AM | Reason: Not specified
Pirate
#218 Posted : Thursday, May 14, 2015 10:36:33 AM
Rank: Member

Joined: 4/4/2007
Posts: 91
MaichBlack wrote:
Pirate wrote:
MaichBlack wrote:
On a different note, the method they use to calculate the new price is flawed. It overvalues the share because it does not take cognizance of the money pocketed by the shareholders.

Take for example last year.

Share price 270/=

Dividend: 25% * 270 = 67.5/=

Re-invested = 65% * 67.5 = 43.875/=

Paid = 35% * 67.5 = 23.625/=

From my mathematics:

New Price = Old price + reinvested amount
= 270 + 43.875
= Ksh 313/=

You cannot add the whole 67.5 to get the new price because you have already taken out 23.625/=

And even if you use the whole 67.5/= (which you shouldn't) you still get 337.5/=. Go even further and use the whole 27% you still get 342.9/=

Not matter how you dice and slice it, you can't get 350/=

But with this approach, the current price should be Kshs. 313/= NOT 350/=

On the flip side, people immediately re-investing the slaves are making double killing. I don't see why one would EVER take the money.Re-invest and sell almost immediately (if you must) and get approx. 25% more cash!!!


For share valuation as from 2014-2015 , SIC are matching dividend declared : share increase at 1:1

So 25% dividends + 25% share revaluation makes a generous 50% return on investment .. Hence the 350 .


Therein lies the problem. You don't re-evaluate the share price by simply making public pronouncements!! It must be backed up by mathematics/fundamentals/sound financial backing.

Why would I want to own a share worth 500/= on paper and 50/= in reality.

If you are a Mumias shareholder, would you be okay if the MD woke up one day and "re-evaluated" the share price to 15/= (Assuming it was allowed) - and assuming your plan is not to sell?

Please note: They made 25% (or is it 27%) in profit. How do you end up with 50% return on investment??? Where does the rest of the money come from. You can never have return on investment being double the actual profit made. Not unless someone is printing money!!!


Well that is true however the question should be is the share price overvalued , sustainable based on their current asset base , ongoing projects and what SIC is transforming to ? Maybe a financial analyst can have a look at their financial reports and see if the share price is overvalued ( which in my last analysis was not)
Note also that like UNAITAS , SIC have capped the share drive to 1.5B , so by end of next year there will be no more monthly contribution or share purchase.

http://www.sic.co.ke/ind...5:2014-financial-report


Knowledge is power , but action gets things done ...
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  | | Edit by user: Thursday, May 14, 2015 10:42 AM | Reason: Not specified
MaichBlack
#219 Posted : Thursday, May 14, 2015 10:55:44 AM
Rank: Elder

Joined: 7/22/2009
Posts: 7,838
Haya wazuans. We have two opinions on the table. Mine and @pirate's. Ongezeni zenu tafadhali. You all know what we end up with in Wazua is always more than the total of the parts.

Thanks @pirate for the info and opinions. Will be joining you, @murchr and others kabla mzime taa!

Actually the information you guys have given might just make me bring my entry point forward. There is nowhere else I know I will take my money and I get pregnant kids (slaves) who will give birth immediately and the price of the the parents, the kids and the grand kids get "re-evaluated" immediately!!!

Plans might need to be changed.

Reviewing plans.....
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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  | | Edit by user: Thursday, May 14, 2015 11:04 AM | Reason: Not specified
Mukiri
#220 Posted : Friday, May 15, 2015 8:33:05 PM
Rank: Elder

Joined: 7/11/2012
Posts: 5,222
Agree to disagree...

And talk discuss their Ololua REITS. 22% return good in the current bear?

Proverbs 19:21
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