True, thanks for the fact-based rebuttal. Indeed IAS 40 allows for ongoing construction projects to be accounted for as investment property if in future they will be used as investment property i.e. land held for long-term capital appreciation, land held for a currently undetermined future use, building leased out under an operating lease, vacant building held to be leased out under an operating lease. If the properties are to be sold then they should be accounted for as Inventory with no fair value gains. I think Cytonn are building to sell so the latter should apply with no fair value gains accruing to the company. Am I wrong or ignorant here??? Please check my logic and I'll accept if I'm wrong.


Secondly, the point on CMS is, how are they raising their liquidity. If I'm not wrong (and again correct me if I'm wrong cause that's what Wazua is there for), they are offering high yielding cash products (isn't that CMS). If CMS wasn't a product, why is it accounted for as a liability?

So if a company is raising cash through high yielding cash products and constructing to sell whilst booking fair value gains, doesn't that raise a couple of red flags?

That CMS is an obvious ticking time bomb. If they are giving 18% annual interest, that means they are somehow getting 20% and above annual returns on whatever they invest in. Any smart investor knows that consistent 20% and above annual returns is the preserve of the best of the best investors. Furthermore, to guarantee such returns is the mark of a con or someone who doesn't really know what they're doing. The more plausible explanation is that they are using the CMS to fundraise for their projects, in which case, it's still a ticking time bomb because it's such an expensive way of raising funds. Their profits on the projects will be severely eroded. No matter how you look at it, this thing stinks.

@quicksand 😁😁

@M-ock so u reckon 20% pa is a great feat? Really? i am sure alot of wazuans average way above a 20% return pa. Wacha conspiracy theories. 20% pa returns is actually mediocre to a serious investor

Such wild estimates only dupe amateurs. Hapa ni Wazua.

I'm guessing Warren Buffet must be very mediocre in your view:

"Over his first 25 years at Berkshire, Mr. Buffett’s average annual return was 24 percent using book value and 30 percent using market value, compared with 10 percent for the S.&P. 500."

https://mobile.nytimes.c...hathaway-revisited.html

That CMS is an obvious ticking time bomb. If they are giving 18% annual interest, that means they are somehow getting 20% and above annual returns on whatever they invest in. Any smart investor knows that consistent 20% and above annual returns is the preserve of the best of the best investors. Furthermore, to guarantee such returns is the mark of a con or someone who doesn't really know what they're doing. The more plausible explanation is that they are using the CMS to fundraise for their projects, in which case, it's still a ticking time bomb because it's such an expensive way of raising funds. Their profits on the projects will be severely eroded. No matter how you look at it, this thing stinks.

I can see this being possible in some forms of venture capital infusion, but I do not know of any venture capitalist who wants his/her money used to pay (high) returns to other investors...

Unless.... I am misunderstanding or it is a Madoff-like venture.
________
How Madoff made it happen
Rich families placed money with wealth managers, hedge funds and private banks

After careful vetting, these professionals chose specialist fund managers. As a consistent performer over decades, Madoff was a favourite choice

Madoff’s popularity lead to specialist funds being set up to raise money to feed directly into Madoff in return for a fee

Although he told them he was investing the money, Madoff used the inflows to pay 'profits’ back to clients

The financial crisis hit inflows and caused clients to ask for their money back. With no money to pay out, the fraud was exposed

Stop quoting madoff if u dont understand how the madoff ponzi worked he was very influential in the investing community for decades. He gave out pretty average results to avoid being flagged. Please get ur facts right first before coming out with stellar assumptions.

WORD!

14% p.a.