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today=history tomorrow=gone future=now

today=history tomorrow=gone future=now. THE SECRET KNOWN BY ALL:. “The rich rule over the poor, and the borrower is servant to the lender”. PROV 22vs7. TO BE COVERED. Intibane Investment & Social Club (IISC); Johannesburg Stock (Securities) Exchange (JSE);

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today=history tomorrow=gone future=now

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  1. today=history tomorrow=gone future=now

  2. THE SECRET KNOWN BY ALL: “The rich rule over the poor, and the borrower is servant to the lender” PROV 22vs7

  3. TO BE COVERED • Intibane Investment & Social Club (IISC); • Johannesburg Stock (Securities) Exchange (JSE); • BB-BEE (incl MTN Zakhele Deal) and • Questions

  4. Intibane Investment & Social Club (IISC) …an introduction and an insight…

  5. Intibane Investment & Social Club (IISC) …an introduction…

  6. Intibane Investment & Social Club (IISC) …an insight…

  7. Intibane Investment & Social Club (IISC) …an insight…

  8. Intibane Investment & Social Club (IISC) …an insight…

  9. Intibane Investment & Social Club (IISC) …an insight…

  10. Intibane Investment & Social Club (IISC) …an insight…

  11. THE JSE

  12. THE JSE …building, running, listing & exiting a business… Nancy Portia Paul Jabu

  13. THE JSE “Buza-Kithi Capital (Pty) Ltd”

  14. THE JSE …major players hired…

  15. THE JSE

  16. THE JSE PROV 22vs7

  17. THE JSE …a company is being owned by the masses: ME & YOU…

  18. THE JSE making money on shares Capital Gain Dividend Payout

  19. JSE …share ownership… …share ownership means owning a portion of the business, and is rewarded by dividends when profits are made, but high risk when the business is doing badly…

  20. JSE …capital gain… • Peter buys 100 FSR shares on 1 Jan 2010 at R20 per share = • R2 000 • Peter sells 100 FSR shares on 31 Dec 2010 at R25 per share = • R2 500 • Peter has made a capital gain of R500 in 1 year • Equals 25%

  21. JSE …market capitalisation… = number of shares issued X price per share

  22. JSE …market capitalisation… …note the difference between authorised and issued shares…

  23. JSE …market capitalisation…

  24. JSE …indixes/indices… • FTSE/All Share Index (J203) • Top 40 Index • Dow Jones • S&P500 • NASDAQ • DAX • CAC

  25. THE JSE OTHER FACTS ABOUT JSE REVENUE STREAMS (2008) • Largest SSF market in volume • Take-over of BESA • 69 319 trades a day • World 20 largest exchange • Corn futures endorsed by • CBOT • Appr R10 bln traded daily (VS • R696 bln traded at NYSE)

  26. THE JSE the alternatives • trading account with the local bank (FNB, Standard Bank, etc) • visit the local stockbroker: • Sasfin Frankel Pollock • Investec • PSG Konsult • phone any stock-broking firm in SA or oversaes: • Rand Merchant Bank (RMB) • Cadiz • etc • open you own trading account on internet (ie www.sharetrakin.com)

  27. JSE …fees on R10 000…

  28. THE RATIONALE FOR BB-BEE The definition of B-BBEE by dti: “ an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the numbers of Black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities”

  29. BEE & FDI:

  30. BUSINESS CONFIDENCE INDEX:

  31. BEE & FAILURE: • Reasons for failure of some BEE transactions: • Narrow focus of ownership control • Lack of effective integration • Excessive imbalance between partners • Lack of trust • Funding • Complex financial structures

  32. BB-BEE: THE OVERALL

  33. Broad Based - BEE …funding…

  34. BB-BEE …the banks…

  35. BB-BEE …the banks…

  36. BB-BEE …the banks…

  37. BB-BEE …the banks, an oligopoly… • Conditions for successful collusion: • Small number of firms & known to each other • Similar production methods & average costs • Homogeneous products • Significant barriers to entry • Stable market • No government intervention to prohibit collusion • Oligopolists also sometime compete on the basis of advertising, product development, etc • Price competition is often avoided • More aggressive competition affect profitability

  38. BB-BEE …banks & deal making… • SA banks are in an extremely powerful position; • serious lack of competition (they pick the deals they like); • deals are structured in a skewed and unfair manner; • deals are sometimes extremely complex; • strong relationship between owners of banks and the companies that are issuing stakes; • limited consequences to the banks when the deals fail; • a too conservative outlook from the banks; • steep fee structure and lack of competition sustain the most arrogant banking houses; • we want more Capitec, TEBA, African Bank, to enhance competition.

  39. MTN Zakhele BB-BEE Deal …an analysis (the facts)… • number of shares : 80 900 000 • MTN shares IS NOT EQUAL TO MTN Zakhele Shares • minimum subscription : 100 MTN Zenzele Shares • …which amounts to R2,000 • the deal will be off : when money raised through Zakhele is below R 429 mln. • Deal start : 09H00 (30 August 2010) • Deal ends : 16H00 (14 October 2010) • deal size: 4% of MTN

  40. MTN Zenzele BB-BEE Deal …an analysis (the facts)…

  41. MTN Zakhele BB-BEE Deal …funding of the deal… • money raised from the public; • MTN donation; • Notional vendor finance; • Third party bank funding

  42. MTN Zakhele BB-BEE Deal …funding of the deal… • money raised from the public; • MTN donation; • Notional vendor finance; • Third party bank funding

  43. MTN Zakhele BB-BEE Deal …funding of the deal… FUNDERS BFC BLACK PUBLIC MTN MTN ZAKHELE VARIOUS PIC MTN

  44. MTN Zakhele BB-BEE Deal …the underlying values estimates…

  45. MTN Zakhele BB-BEE Deal …can I loose everything… “You can ultimately loose all OR part of the investment, this is an investment after-all”.

  46. MTN Zakhele BB-BEE Deal …pooling funding together…

  47. MTN Zakhele BB-BEE Deal …what has MTN done for me… • MTN will donate R80 for every R100 provided by Black public • MTN has arranged R3.2 bln from vendor finance • MTN has assisted MTN Zakhele to source R2.1 bln from third part lenders • MTN has been instrumental in negotiating with PIC to sell their MTN shares

  48. MTN Zakhele BB-BEE Deal …in perspective… For every R2 000 that you invest, MTN will be able to invest R10 010 into MTN shares. In other words: For every R100 that you put in, MTN and funders will put in another R400 into your MTN investment

  49. MTN Zakhele BB-BEE Deal …the minimums & maximums… • 100 shares at R20 per share = R2 000 • you can then add R100 worth of shares with no maximum

  50. MTN Zakhele BB-BEE Deal …the trading restrictions… • first three (3) years, you cannot sell your Zakhele shares • year 4 – six, you can sell to Black shareholders (BIC) subject to approval by BSTC. • during the first six years, you cannot use your Zakhele shares as a security. • after 6 years you can do what you like with your Zakhele shares • your Zakhele shares will only trade in the OTC market.

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