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Barclays Chairman Marcus Agius Resigns

02 Jul

The interest rate rigging scandal has claimed its first scalp among the senior  management of Barclays with the bank’s Chairman set to announce his resignation today.

Marcus Agius at a Barclays branch

The scandal has claimed its first scalp among the senior management of Barclays, as the bank confirmed on Sunday that Marcus Agius, its chairman, was set to resign

 

Marcus Agius is expected to say he is “truly sorry” for the scandal, which has   dealt a “devastating blow” to the bank. Meanwhile, Lord Turner of   Ecchinswell, the head of the Financial Services Authority, said “more heads   will roll” at badly behaving banks.
Yesterday it emerged that Barclays stepped up its efforts to rig interest   rates after Bob Diamond, its chief executive, personally spoke to the deputy   governor of the Bank of England. Bob Diamond had a conversation with Paul   Tucker about how much Barclays was claiming it had to pay to borrow money   during the financial crisis in 2008.
After Mr Diamond spoke to Mr Tucker, Barclays staff came to believe the Bank   of England wanted them to falsify this data — which was used to calculate   Libor, the interest rate that banks pay to each other.
The bank’s traders then escalated their secret attempts to manipulate the   markets and make it appear that the bank was paying less to borrow money   than was actually the case, documents show. Sources at both banks said this   was the result of a “misunderstanding” and insisted that Mr Tucker had not   sanctioned Barclays’ actions.
At the time, the Bank of England was keen to see a lower Libor rate, as that   would have been a positive sign in the depths of the credit crunch.
The disclosure increases the pressure on Mr Diamond, who has now been put at   the heart of discussions about the fixing of Libor. When he gives evidence to MPs this week the bank chief will also have to   explain why his employees were left with the understanding they had the Bank   of England’s blessing.
As the board of Barclays called an emergency meeting last night, there were   calls for a criminal inquiry into the bank by Vince Cable, the Business   Secretary, and Lord Blair of Boughton, the former Metropolitan Police   commissioner.
Mr Diamond is also facing calls to step down over his failure to spot the   scandal, which may have caused banks to charge mortgage holders, credit card   users and businesses too much for billions of pounds in loans.
Barclays was last week fined £290 million for its role in the affair. Other   high street banks are expected to face heavy penalties for similar   wrongdoing
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Posted by on July 2, 2012 in International News

 

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G20′s Family Feud to See Summit Fall Flat‏

19 Jun

Photo by: Wikipedia

JUST like every other family, the G20 has its tiffs.

But, as any Sopranos fan will tell you, some families are more  powerful than others.
The global summit – being held in the beachside resort city of  Los Cabos – is under intense pressure to drive action on the debt  crisis in Europe and the United States.
But as the first day of the two-day summit drew to an end,  leaders and officials were talking down the prospect  of anything  more than a statement on future directions or a “roadmap”.
What appears likely is a “Los Cabos Action Plan”, similar to  that issued  after the Cannes summit in 2011, in which individual  countries made  broad commitments to tackle issues.
There’s a sharp divide between the Europeans, the British, the  Americans and the rest.
British PM David Cameron is holding little back in his criticism  of the eurozone governments, raising fears of the region slipping  into  “perpetual stagnation or break up”.
Prime Minister Julia Gillard  has been a little more cautious but  still urging eurozone nations to  cut their deficits and do what  they can to stimulate growth and jobs -  not an easy balancing act  especially for countries like Greece.
China, India and Indonesia are frustrated that some of their  biggest export markets can’t get it together.
US President Barack Obama stated the obvious when he said the  world was  “very concerned” about the slowing of growth and now was  the time to  stabilise the world financial system.
The attacks are starting to bite, but may not necessarily lead  to action.
German chancellor Angela Merkel, Italy’s Mario Monti and  European Commission  chief Jose Manuel Barroso were on the defensive  as they entered the  summit.
Dr Merkel pointed the finger at Greece, as it negotiated a new  coalition government after Sunday’s elections, saying there would  be no “loosening” of the commitments to economic reform.
Mr  Barroso was blunt about the criticism: “Frankly, we are not  coming here to receive lessons in terms of democracy or in terms of  how to handle  the economy.” Mr Monti argued the EU was not the “only source of the problem”.
“The crisis had its origins in imbalances in other countries,  including the US,” he said.
What looks more certain in terms of a eurozone solution are some  fine words followed by a deferral to coming talks between European  leaders and  finance ministers. Trade issues, which are also a key part of the regular summits,  are also being talked down.
While US President Barack Obama attempted to inject some  confidence into  this policy area by inviting Mexico to join the  Trans-Pacific  Partnership agreement talks – which could lead to one  of the world’s  biggest free trade zones being formed – Cameron was  gloomy about the  rise of protectionism.
He said that since the previous G20 member  nations had put in  place 124 new trade restrictions and no progress has been made on  the Doha trade round.
As expectations of the G20  fall, national leaders could find  themselves looking to other forums,  regional groups and bilateral  deals for better ways to progress jobs  and growth. The Group of 20 accounts for more than 80 per cent of world   trade and production and two-thirds of the world population.
 
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Posted by on June 19, 2012 in International News

 

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Kutoka Bungeni : Zitto on Government Budget

19 Jun

MFblog Inaendelea kuleta matukio yanayoendelea Mjini Dodoma katika kipindi hiki cha kikao cha Bunge cha bajeti. “ALL EYES ON DODOMA-BUNGENI”

Mh. Zitto Kabwe

Mh. Zitto Kabwe

WAZIRI Kivuli wa Fedha Kabwe Zitto amewasilisha bungeni bajeti mbadala ya Kambi ya Upinzani kwa mwaka wa fedha 2012/2013.
Zitto amebainisha kasoro nyingi zilizopo katika bajeti ya Serikali iliyowasilishwa bungeni Alhamisi iliyopita.
Bajeti ya Zitto ilitanguliwa na hotuba ya Msemaji  Mkuu wa Kambi ya Upinzani kuhusu Ofisi ya Rais – Mipango, Christina  Mughwai ambaye pia alibainisha alichokiita udhaifu wa Serikali  katika kuitekeleza mipango yake ya kiuchumi.
Zitto ambaye pia ni Naibu Kiongozi wa Upinzani Bungeni katika hotuba yake  alisema mapato ya Serikali yanaweza kuongezwa kwa Sh2.885 trilioni,  hivyo kupunguza utegemezi wa mikopo ya kibiashara ambayo imekuwa  ikiligharimu taifa kiasi kikubwa cha fedha. Vyanzo vya kodi na  kiasi cha fedha kwenye mabano alivyopendekeza ni marekebisho ya kodi za  misitu ukiwemo mkaa (Sh130.8 bilioni), kupunguza misamaha ya kodi,  kuzuia ukwepaji kodi na udanganyifu wa biashara ya nje (Sh742.74  bilioni), mauzo ya hisa za Serikali (Sh415.55 bilioni), Marekebisho ya  kodi Sekta ya Madini na asilimia 25 ya Mauzo ya Madini Nje (Sh578.36  bilioni) na Marekebisho ya Kodi na Usimamizi bora wa Mapato Kampuni za  Simu (Sh502.26 bilioni).

Mapendekezo mengine ni Marekebisho ya  Kodi ya Tozo ya Kuendeleza Stadi (Sh243.52 bilioni), mapato ya  wanyamapori (Sh61.64 bilioni), kuondoa msamaha wa ushuru wa mafuta kwa  kampuni za madini (Sh44.9 bilioni), Usimamizi wa mapato ya utalii  (Sh51.75 bilioni), Kuimarisha biashara Afrika Mashariki (Sh 114.15  bilioni).

Zitto alisema kama wapinzani wangekuwa madarakani  wangekusanya kiasi cha Sh15 bilioni sawa na ile ya Serikali, lakini  tofauti ni hatua ya kutenga asilimia 35 ya mapato ya ndani kwa ajili ya  utekelezaji wa miradi ya maendeleo na kupunguza utegemezi wa bajeti  kutoka asilimia 42.37 za Serikali hadi asilimia 21.3.

 

Amesema, Serikali haipaswi kuendelea kukopa, kwani taarifa rasmi za kibenki na  ukaguzi wa hesabu zinaonyesha kwamba deni hilo linakua kwa kasi tofauti  na maelezo ya Serikali kwamba linahimilika.

“Taarifa ya Mdhibiti na Mkaguzi Mkuu wa Hesabu za Serikali inaonyesha kuwa Deni la Taifa  linazidi kuongezeka kwa asilimia 38 kutoka Sh10.5 trilioni mwaka  2009/2010 hadi Sh14.4 trilioni 2010/2011. Kwa mujibu wa Waziri wa Fedha, Deni la Taifa limefikia Sh20.3 trilioni mpaka ilipofika mwezi Machi  mwaka 2012,”

alisema Zitto na kuongeza:       “Ukisoma taarifa ya Mwezi wa Mei 2012 ya Benki Kuu ya Tanzania, Deni la Taifa sasa limefikia Sh22 trillion. Suala hapa sio ustahmilivu wa Deni kama inavyodai Serikali,  bali ni kwamba tunakopa kufanyia nini?”

Alisema hesabu za bajeti ya Serikali ya 2012/13 inayopendekezwa zinaonyesha kwamba Serikali bado ina mpango wa kukopa kwa ajili ya kugharamia matumizi ya kawaida ambayo hayazalishi wala kutozwa kodi. “Hatutaki mikopo kwa ajili ya  matumizi ya kawaida ya posho, kusafiri, magari n.k. Tuchukue mikopo  kuwekeza kwenye miradi itakayokuza uchumi na kuzalisha kodi zaidi,”  alisema.

Kuhusu mfumuko wa bei, Zitto alikosoa hatua  zinazopendekezwa na Serikali kukabiliana nao, kwamba ni zile  zilizoshindwa katika mwaka wa fedha unaoishia Juni 30, mwaka huu. Alisema hatua hizo ambazo ni kutoa vibali kwa wafanyabiashara vya kuagiza  mchele na sukari bila kutoza kodi, haziwezi kusaidia kwa kuwa hatua kama hizo zilipochukuliwa awali zilisababisha bei ya bidhaa hizo kuongezeka. “Baada ya hatua hii bei ya sukari ilipanda kutoka Sh1,700 mpaka 2,800 kwenye  maeneo mengi nchini… Serikali inachukua hatua zile zile kwa tatizo lile  lile ikitegemea matokeo tofauti,” alisema Zitto.

Alirejea  pendekezo la mwaka jana kwa Serikali kutoa vivutio kwa wakulima wadogo  kuzalisha chakula kwa wingi akisema kuwa hatua hiyo pekee ndiyo  itapunguza mfumuko wa bei. “Hakuna mbadala wa kudhibiti mfumuko  wa bei zaidi ya kuongeza uzalishaji wa chakula na kuwekeza kwa wananchi  wetu.

Serikali inafikiria uzalishaji utaongezeka kwa kusaidia wakulima  wakubwa ambao watageuza wananchi wetu kuwa manamba na vibarua ndani ya  nchi yao,” alisema na kuongeza: “Tuwekeze kwa watu wetu vijijini ili waongeze uzalishaji na kwa kufanya hivyo mfumuko wa bei ya chakula  utakuwa historia. Hakuna mwarobaini wa kupanda kwa bei za vyakula  isipokuwa kilimo”.

MF: Well done Zitto; Tunaendelea Kufuatilia yanayoendelea Dodoma kwa Ukaribu.

 

 
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Posted by on June 19, 2012 in Tanzania News

 

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Kutoka Bungeni: Misamaha ya Kodi Kupunguzwa

19 Jun

Dodoma, Tanzania

 

WIZARA ya Fedha imesema, Serikali ina lengo la kupunguza misamaha ya kodi ili isizidi asilimia moja ya pato la taifa.

Naibu wa Fedha Ms.Saada Mkuya,Mb.

Naibu wa Fedha Ms.Saada Mkuya,Mb.

 

Naibu Waziri wa Fedha, Saada Mkuya Salum ameliambia Bunge mjini Dodoma kuwa, Serikali inaendelea kupitia baadhi ya sheria za misamaha ya kodi ili kuangalia kama bado zina manufaa kwa umma.

 

Amesema, ili kutimiza azma hiyo, Mamlaka ya Mapato (TRA) kupitia mfuko wa dhamana wa ushauri wa sera na usimamizi wa kodi ulioanzishwa na Shirika la Fedha la Kimataifa (IMF) inafanya uchambuzi wa kina wa kuangalia sheria na kanuni za misamaha ya kodi.

 

Kwa mujibu wa kiongozi huyo wa Serikali, uchambuzi huo utaleta mapendekezo ya kuiondoa misamaha yote isiyo na maslahi na tija kwa taifa.

 

Salum amesema, mwaka ujao wa fedha, Serikali imechukua hatua za kurekebisha sheria mbalimbali za kodi kwa nia ya kupunguza misamaha na kuzuia mianya ya ukwepaji kodi.

 

Alikuwa akijibu swali la Mbunge wa Viti Maalumu Amina Abdulla Amour (CUF) aliyetaka kufahamu ni lini Serikali itapunguza misamaha yakodi hadi kufikia chini ya asilimia moja ya pato la taifa kutokana na kuwa kero kwa muda mrefu kwa taifa kukosa fedha na mapato kwa ajili ya maendeleo.

 

“Sisi pale wizarani tumeamua kulivalia njuga suala hili, tutaifanya kazi hiyo na tunaomba tupewe muda kwani jambo hili haliwezi kufanyika kwa mara moja,” alisema.

 

Wakati huo huo, Salum alisema Benki ya Wanawake inaweza kushiriki katika mpango wa kukopesha na kusimamia fedha za mabilioni ya Rais endapo inahitaji kufanya hivyo na taasisi zingine za fedha ambazo zimekidhi vigezo vilivyowekwa.

 

Alitaja vigezo hivyo kuwa ni pamoja na uwezo wa kuhudumia vijijini, kuwa na mizani nzuri za hesabu na uzoefu katika kuhudumia wajasiriamali wadogo.

 

Alisisitiza kuwa walengwa wa mfuko wa mabilioni ya Rais ni vijana, wazee, wanawake vijijini na mijini ambao wanafanya shughuli katika kuhudumia wajasiriamali wadogo.

 

Alikuwa akijibu swali la Mbunge wa Viti Maalumu Faida Mohamed Bakar (CUF) ambaye alihoji kama Serikali inakubaliana naye kwamba sasa ni wakati muafaka wa kuhamisha fedha za mkopo wa mabilioni ya Kikwete na kutumika katika Benki ya Wanawake ili wananchi wapate mikopo.

 

Wakati huohuo, Kamati ya Kudumu ya Bunge ya Fedha na Uchumi, imeafiki maeneo mengi ya kodi na tozo mbalimbali yaliyopendekezwa na Serikali kufanyiwa marekebisho, lakini ikasisitiza umuhimu wa nidhamu ya matumizi ya Serikali na uwezo wa kuongeza mapato.

 

Mbali na hayo, Kamati hiyo ilieleza kutoridhishwa na Serikali katika kasi ya kushughulikia misamaha ya kodi.

 

“Kamati inaishauri Serikali kuonesha dhamira ya kweli kufanikisha lengo hilo (la kuimarisha taratibu za kukusanya mapato pamoja na kupunguza misamaha ya kodi) na kutoa taarifa ya utekelezaji mbele ya Kamati Januari 2013,” amesema Mwenyekiti wa Kamati hiyo, Andrew Chenge.

 

Chenge alikuwa anawasilisha taarifa ya Kamati yake kuhusu hali ya uchumi wa Taifa kwa mwaka 2011 na Mpango wa Maendeleo wa Taifa kwa mwaka 2012/13 pamoja na tathimini ya utekelezaji wa Bajeti ya Serikali kwa mwaka 2011/12 na mapendekezo ya mapato na matumizi ya Serikali kwa 2012/13.

 

“Kamati inaendelea kushauri kwamba Serikali iachane na mtindo wa kuibua matumizi mapya yasiyo ya dharura ambayo hayakuidhinishwa na Bunge wakati wa utekelezaji wa bajeti”

 

“Mtindo huo unavuruga bajeti na kupunguza uwezo wa kutoa fedha za matumizi mengineyo (OC) na matumizi ya maendeleo kama ilivyokusudiwa. Kamati inasisitiza umuhimu wa Serikali kubana matumizi kwa kupunguza matumizi yasiyo ya lazima,” amesema Chenge.

 
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Posted by on June 19, 2012 in Tanzania News

 

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Industries Negatively Affected by an Economic Recovery

06 Jun

What is an economic recovery?

An economic recovery is a period of increasing business activity signaling the end of a recession. Much  like a recession, an economic recovery is not always easy to recognize until at  least several months after it has begun. Economists use a variety of indicators,  including GDP, inflation, financial markets and unemployment to analyze the  state of the economy and determine whether a recovery is in progress.

The general thinking is that recessions are bad for business. However, some  of businessess do quite well during downturns and would actually prefer that  the economy struggle a bit. On the flip side, they tend to be negatively  affected when the economy starts to recover. The following 5 industries fall into this category.

1. Discount Stores:

These are department stores which offers its items at a lower price than many other retail stores. Economic downturns necessitate  belt-tightening on the part of consumers. In a falling economy, high-end  fashion, automobiles, and homes see a plummet in demand as individuals  focus on all but the most core necessities. Discount stores, like Mr.Price, tend to see a corresponding boost in  demand during these downturns and do well in difficult economic climates. On the flip side, these  businesses see their popularity wane when the business cycle improves and  consumers become less concerned about losing their jobs. When the economy recover consumers will go to high-end stores and most expensive cars etc.

2. Education

Job losses during recessions leave those  unfortunate enough to be handed a job termination lettesr with free time. Many use their time  constructively and return to school to either learn a new job skill or add a  degree that will make them more desirable to current employers, or in  preparation for when the employment market picks up. One study by the Pew  Research Center detailed that community colleges experienced record enrollment  trends during the credit crisis. It specifically cited individuals in the auto  industry returning to school. The center even mentioned a drop in high school  dropouts, which makes sense as there is less opportunity to find a job instead  of going to class. In an upturn, these trends reverse as earning a paycheck  becomes more possible and makes  education look less appealing in comparison. In Tanzania this could apply more to colleges that offers cheap short courses; for high fee institutions ca not be affordable for a person that looses a job.

3. Grocery Stores

In similar fashion to the alcohol-related  firms, consumers tend to eat at home more often in a down economy. The recession crisis saw the restaurant industry suffer mightily as a result of this  phenomenon.  This trend  favored food retailers. In an economic recovery, their growth tends to  slow because of less traffic in the grocery aisles.

4.Spirits

The spirits and alcohol space is unique in that it  can benefit in both good and bad times. As with retail, the higher end of the  market does well in an upswing as consumers have more discretionary money to throw around and try a more expensive bottle of wine or whiskey. A  shift also occurs as people dine out less, meaning they buy more alcohol for  drinking at home, as opposed to at a restaurant.  But overall, people are just as likely to drink  and drown their sorrows in an economic downturn. As you might expect, people  trade down to cheaper brands during a recession.

5. Pawn Shops

Pawn shops euphemistically refer to themselves as  “specialty consumer financial services” firms and tend to do well when  people need money. Labor-intensive jobs, such as those in the manufacturing  and homebuilding industries, are very economically sensitive and lay off workers  in downturns. Part of this work demographic doesn’t qualify for traditional  credit offered by banks and credit card companies and means they sometimes have  to rely on pawn shops, which offer high-interest loans and take personal  property as collateral.

The  Bottom Line For the most part, the above industries do less well  during economic recoveries. Overall, these spaces would prefer a downturn and  the chance to profit from a gloomier business climate.

 
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Posted by on June 6, 2012 in Uncategorized

 

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Finance Tip: Know Your Market Value

26 Mar
Finance Tip: Know Your Market Value

Hello MonFinance readers, i hope you had a wonderful weekend. Today i am going to give you a tip on getting paid what your job  worth; and how to ask for a raise if you feel underpaid .

It sounds simple, but many people struggle with this  basic rule; getting paid what you’re worth and of course spend less than you earn .

Whether you are employed or self-employed,  Make sure you know what your job is worth in the marketplace, by conducting an evaluation of your skills, productivity, job tasks, contribution to the company, and the going rate, both inside and outside the company, for what you do. Being underpaid even one hundred thousand shillings a month can have a significant cumulative effect over the course of your working life.

After reading this and you feel underpaid; then you have to ask for a raise in a professional way.

How do you ask for a Raise?

Many employees make the mistake of asking for a raise because they need more money, can’t pay their bills, etc.  Your personal budgeting and financial problems are not your company’s problem.  Need has nothing to do with it, so it’s best not to talk about need when asking for a raise.

Base your request on your evaluation of your skills, productivity, job tasks, your contribution to the company, and the going rate, both inside and outside the company, for what you do.  Look at the entire situation from your company’s perspective, and base your approach on THEIR needs, and on what YOU can do for THEM.

However, no matter how much or how little you’re paid, you’ll never get ahead if you spend more than you earn. this is when the Budget Tip apply.  Often it’s easier to spend less than it is to earn more, and a little cost-cutting effort in a number of areas can result in big savings. It doesn’t always have to involve making big sacrifices.

Happy reading.

Monica.

 
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Posted by on March 26, 2012 in Articles, Finance, Economic terms and Buzz Words, Finance,Taxation and Investment

 

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Weekend review: Become Your Own Boss in 12Months by Melinda Emerson

24 Mar
Weekend review: Become Your Own Boss in 12Months by Melinda Emerson

Melinda Emerson, known as “SmallBizLady,” is one of America’s leading small business experts.  She is a seasoned entrepreneur, professional speaker, social media strategist and small business coach and the Start-Up columnist for Small Business Trends. Melinda is Forbes #1 Influential Woman for Entrepreneurs and ofcourse an Author of the Bestselling book ‘Become your own Boss in 12 Months’ I love this woman, i am following her on almost ALL social ,edia platforms, twitter,facebook,wordpress,Blogger you name it!  I keep asking myself.. I need to meet this woman and a learn a thing or two from her. Seriously.

About the Book

This book will inspire and guide you stage by stage if you are planning to start your business. You need to read this book before you go out and make any major moves. You’ll find it easy to read, well organized, and chock-full of useful information to get your started. What I really liked was that it’s not your typical business planning book as Melinda cares for your total entrepreneurial success – not just your business plan. She also gives advice on maximizing social media for your business and even touches on e-commerce as well. I highly recommend it for any aspiring entrepreneurs out there.

I short this book is;

  • Great book for starting entrepreneurs
  • Very well written
  • Breaks down the process of becoming an entrepreneur in a reasonable time-line
  • Not your typical “business planning” book (includes a life planning section amongst other unique sections)
  • Includes great advice on getting ready to start the business, leaving a job, marketing, even social media
  • Loved the way Melinda weaved her personal insights, advice, and tips into each chapter

For more articles from Melinda, visit her blog http://www.succeedasyourownboss.com

Have a Blessed Weekend. Catch me up on #MonFinanceBlog facebook page.

Monica.

 
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Posted by on March 24, 2012 in Books and Articles Reviews, General Knowledge

 

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Finance Tip: Budget

23 Mar

For you to  be financially health, build yourself a solid budget  and stick to it.

This is just good sense for absolutely everyone – Men,Women, single,  married or divorced..Employed or student, Everyone.

Examine your monthly expenses, remembering to include  everything from housing costs, utilities, groceries, car payments, gasoline,  insurance and esthetics. Do the same for your income. Subtract your expenses  from your income, and see what you’ve got leftover. You can divide the remainder  up based on what you’d like to save and what you’d like to budget toward discretionary spending. Don’t  forget to factor in money towards repayment of credit card debt, student loans  or any other debts you may have. You’ll want to get debts  paid off as quickly as you can in order to save yourself those pesky  interest costs. You should also examine methods for reducing costs, like eating  meals at home or reducing the amount you spend on entertainment  expenses.

MJ.

 
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Posted by on March 23, 2012 in Finance, Economic terms and Buzz Words, Finance,Taxation and Investment

 

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Tips for Investing in Initial Public Offering (IPOs)

21 Mar

Most people think Stocks investments is just eating a piece of cake. You do not have to be there physically to control your investments, you just browse daily or weekly on Dar es Salaam Stock Exchange site and manage your portfolio and your money multiplies.

Sounds so much Easier. In the days of dotcom mania, investors could throw money into an IPO and be almost guaranteed killer returns. Numerous companies, experienced huge first-day gains, but ended up  disappointing investors in the long-term. People who had the foresight to get  in, and out, on some of these companies, made investing look way too easy.

However, no investment is a sure thing. Investors could no  longer expect the double and triple-digit gains they got in the early tech IPO  days simply by flipping stocks. There is  still money to be made in IPOs, but the focus has shifted from the quick buck to  the long-term outlook. Rather than trying to capitalize on a stock’s initial  bounce, investors are more inclined to carefully scrutinize long-term prospects.
IPOs can be a risky investment. For the individual investor, it is tough to  predict what the stock will do on its initial day of trading and in the near  future because there is often little historical data with which to  analyze the company. Also, most IPOs are of companies going through a  transitory growth period, which are subject to additional uncertainty regarding  their future values.

WHAT IS AN IPO?

  ‘An IPO is The first sale of stock by a private company to the public. IPOs are  often issued by smaller, younger companies seeking the capital to  expand, but can also be done by large privately owned companies looking to  become publicly traded.’

 Even if you have a longer-term focus, finding a good IPO is difficult. IPOs have  many unique risks that make them different from the average stock which has been  trading for a while. If you do decide to take a chance on an IPO, here are five  points to keep in mind: 

1. Objective research is a scarce commodity 

Getting  information on companies set to go public is tough. Unlike most publicly traded  companies, private companies do not have swarms of  analysts covering them, attempting to uncover possible cracks in their corporate armor.  Remember that although most companies try to fully disclose all information in  their prospectus it is still written by  them and not by an unbiased third-party.

Search the Internet for  information on the company and its competitors, financing, past press releases,  as well as overall industry health. Even though info may be scarce, learning as  much as you can about the company is a crucial step in making a wise investment.  On the other hand, your research may lead to the discovery that a company’s  prospects are being overblown and that not acting on the investment opportunity  is the best idea.

2. Pick a company with strong brokers

Try to select a  company that has a strong underwriter.  I am not saying that the big investment banks never bring duds public, but in  general, quality brokerages bring quality companies public. Exercise more  caution when selecting smaller brokerages, because they may be willing to  underwrite any company.  However, one positive of smaller brokers is that, because of their smaller  client base, they make it easier for the individual investor to purchase pre-IPO  shares. Be aware  that most large brokerage firms will not allow your first investment to be an  IPO. The only individual investors who get in on IPOs are long-standing,  established (and often high-net-worth) customers. Of course in our country most of the brokerage firms aims at SELLING instead of ADVISING an investor.

3. Always read the prospectus

I have told you not to put all  your faith in it, but you should never skip reading the prospectus. It may be a  dry read, but the prospectus lays out the company’s risks and opportunities,  along with the proposed uses for the money raised by the IPO.

For example, if  the money is going to repay loans, or buy the equity from founders or private  investors, then look out! It is a bad sign if the company cannot afford to repay  its loans without issuing stock. Money that is going towards research, marketing  or expanding into new markets paints a better picture. Most companies have  learned that over-promising and under-delivering are mistakes often made by  those vying for marketplace success. Therefore, one of the biggest things to be  on the lookout for while reading a prospectus is an overly optimistic future  earnings outlook; this means reading the projected accounting figures carefully.
You can always request the prospectus from the broker bringing the  company public.  Get a professional to help you understand the prospectus because not anyone can read and understand the accounting information and statements disclosed in a prospectus.

4. Be cautious

Skepticism is a positive attribute to  cultivate in the IPO market. As i mentioned earlier, there is always a lot of  uncertainty surrounding IPOs, mainly because of the lack of available  information. Therefore, you should always approach an IPO with caution.
If your broker recommends an IPO, you should exercise increased caution.  This is a clear indication that most institutions and money managers have  graciously passed on the underwriter’s attempts to sell them stock. In this  situation, individual investors are likely getting the bottom feed, the  leftovers that the “big money” didn’t want. If your broker is strongly pitching  shares, there is probably a reason behind the high number of these available  stocks. This brings up an important point: even if you find a company going  public that you deem to be a worthwhile investment, it’s possible you won’t be  able to get shares. Brokers have a habit of saving their IPO allocations for  favored clients, so unless you are a high roller, chances are good that you  won’t be able to get in.

5. Consider waiting for the lock-up period to end

The lock-up period is a legally binding contract (Mostly 3 to 24 months)  between the underwriters and insiders of the company prohibiting them from  selling any shares of stock for a specified period.
The point here is that waiting until insiders are free to sell their shares is  not a bad strategy, because if they continue to hold stock once the lock-up  period has expired, it may be an indication that the company has a bright and  sustainable future. During the lock-up period, there is no way to tell whether  insiders would in fact be happy to take the spot price of the stock or not.

Let the market take its course before you take the plunge. A good company is  still going to be a good company, and a worthy investment, even after the  lock-up period expires.

The Bottom Line

By no means  I am suggesting that all IPOs should be avoided: some investors who have  bought stock at the IPO price have been rewarded handsomely by the companies in  question. Every month successful companies go public, but it is difficult to  sift through the riffraff and find the investments with the most potential. Just  keep in mind that when it comes to dealing with the IPO market, a skeptical and  informed investor is likely to perform much better than one who is not.

Happy reading and Go beat the Market!

Monica.

 
5 Comments

Posted by on March 21, 2012 in Finance, Economic terms and Buzz Words, Finance,Taxation and Investment

 

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TWAA Women’s day Celebrations Breakfast Meeting

09 Mar

It was great honor to be invited at TWAA Breakfast meeting to celebrate women’s day. The event was very informative and educative. I met amazing Tanzania Women whom I have been looking up to all the time, Dr. Marina Njelekela, Sauda Simba Kilumanga, The Haki Elimu Executive Director Ms.Elizabeth Missokia, what a lady! And many more adorable women.

It was the best way to start my day and the year ahead!

Irene Kiwia - TWAA Founder and President

Irene Kiwia - TWAA Founder and President

The event took off by a moving speech from Irene Kiwia; Irene is the Managing director of Frontline Porter Novelli and TWAA Founder and President, in her speech Irene talked about the major enemies to women, I quote “On this day, all over the world, we consider both the steps forward towards better lives for women that have been taken in recent times, as well as the progress still required. Today I don’t want to talk about our women empowerment initiatives, TWAA, the Mentorship program and so many others! I want to talk about something even more serious… OUR ENEMIES! We spend time naming our enemies: patriarchal structures, discriminative legislative and political decisions, uncaring corporate entities, criminal menaces, culture-based ignorance and economic hardships! They all are significant things, and I am not suggesting that they are not… they are extremely significant! But I have felt for a long time now that something else is at the heart of female disempowerment. Something that isn’t as easy to deconstruct or dismantle. Something that is difficult to even name, and at times feels overwhelming to even think about!  I have had conversations about this several times and most seemed to agree with me that our biggest enemy, our worst evil ugly enemy is none other than US! Yes us women! When we don’t support one another, when we are jealous of one another, when we sabotage one another, when we judge and condemn one another, when we feel that other women are undeserving of success, when we bully, back stab, gossip, rating each other as low…. I can go on till tomorrow morning on the many different when’s”

Another person who presented during the event is Ms. Modesta Mahiga, Professional Approach Group MD whose presentation was based on this year’s international theme; “Connecting Girls: Inspiring Futures”

Another inspiring speech was from Dr. Njelekela who is the current Tanzanian Women of Achievement Awards Gender Champion, the Executive Director of Muhimbili National Hospital, a former MEWATA Chairperson and a past recipient of the prestigious Martin Luther King Drum Major Award for Justice. She  seized the opportunity to launch a girls empowerment initiative titled “Kinara ni Mimi Jasiri” where she will work with young girls in Lindi, Mtwara and Iringa who are facing challenges to overcome early pregnancies, early marriages, school dropouts, STD’s and HIV/AIDS infections. The project will focus on creating awareness, sensitizing the communities and creating a peer system that will empower girls with skills and knowledge needed to overcome these challenges and lead productive, educative and healthy lives.

From Left Myself, Robi Moro and Sophia Byanaku at the Event

From Left Myself, Robi Moro and Sophia Byanaku at the Event

After the speeches a lady called Jessica entertained us with her soulful voice, she sang the songs like I believe I can fly, Hero etc. beautiful voice.

To read more about the event, you can visit Frontline Porter Novelli Blog.

I did learn a lot from the meeting, entertained by Jessica’s beautiful voice and enjoyed the breakfast.

I say “Girl power” Truly great people usually don’t feel important; they make others feel important, Love each other, help a fellow woman, Empower a girl-child.

Be Empowered!

Monica.

 
1 Comment

Posted by on March 9, 2012 in General Knowledge, Tanzania News

 

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Hello world!

17 Sep
Hello world!

Welcome to MonFinance Blog.
The idea of blogging about Money and Finance emanated from my passion for Social Media and a little knowledge I have in Finance Budgeting and Accounting.
I always give advice to my friends on Employment Taxes,social security contributions,corporate taxes and investment ideas.I need to share my little knowledge to you all and gain more from you readers.

My blog is about our everyday activities in Finance,accounting,economics- Theoretical and Practical.(I call it Our daily Maths)
And a little bit of fun..so if you have any question,comment, and or Ideas useful to this blog please share it with us.
This is a bilingual blog,so feel free to use English as well as Swahili in your contributions.

This is the beginning..Let’s walk through this together.
MJ

Follow Me on Twitter @MissNiyu    Like our Facebook Page MonFinanceBlog

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Posted by on September 17, 2010 in General Knowledge, Uncategorized

 

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