Transcorp

[xlad21]

ofoegbu, i think u are being quite unfairly judgemental, and shallow talking about the transcorp fellow that says he ll wait till it gets to 20 naira before selling. of course it may never get to 20 naira, or it may so much out perform the 20 naira mark, its just a target he has already set for himself how all investors do, me i set my own at 9 naira, just before those that bought the public offere at 7.50 will start selling theirs, but who knows, if their fortunes turn out to be really very good, i could hold for it to rise higher, or if it turns for the worse, i could just be struggling to cut my losses at the 3 naira i bought. my point is, let's not write off or disregard peoples issues or opinions here, if you have some advice to give him do, if u dont then...... after all people were buying costain when it was 1.30 naira, they continued buying the public offer barely a yr after at 13 naira, continued to buy it after the close of offer at 40 naira, now its almost 90 naira and its gaining full 5% almost on daily basis. who knows, every one has an entry point and and exit point, it just depends on the person, and wether its a gain or a loss.

[ofoegbu]

Originally Posted by xlad21

ofoegbu, i think u are being quite unfairly judgemental, and shallow talking about the transcorp fellow that says he ll wait till it gets to 20 naira before selling. of course it may never get to 20 naira, or it may so much out perform the 20 naira mark, its just a target he has already set for himself how all investors do, me i set my own at 9 naira, just before those that bought the public offere at 7.50 will start selling theirs, but who knows, if their fortunes turn out to be really very good, i could hold for it to rise higher, or if it turns for the worse, i could just be struggling to cut my losses at the 3 naira i bought. my point is, let's not write off or disregard peoples issues or opinions here, if you have some advice to give him do, if u dont then...... after all people were buying costain when it was 1.30 naira, they continued buying the public offer barely a yr after at 13 naira, continued to buy it after the close of offer at 40 naira, now its almost 90 naira and its gaining full 5% almost on daily basis. who knows, every one has an entry point and and exit point, it just depends on the person, and wether its a gain or a loss.

Xlad21: I was not refering to anyone in particular in the allegory I presented above. All I was trying to do was to try to get us to think through underlying assumptions being made when we take certain positions or viewpoints. I apologize if anyone felt I was being judgemental or calling them a "fool." The "bigger fool" term is a phrase investors and traders use all the time and is actually not derogatory (that is why it is finance theory).

I agree with you that people have very different reasons for playing in the equity market. I think my comments best serve those who are seeking to achieve long term capital growth in their investment in the market and who realize that the money is actually made when you buy and not when you sell. My points may have little relevance to people who are day trading the market and going in and out of stocks purely for profits. I admit that I have zero expertise in that aspect.

[c kenneths]

I have just decided to take a plunge in Transcorp shares. Its not my ideal selection or my best fundamentally sound stock at the moment but sometimes you go with your instincts. Something tells me that this company, although not profitable at the moment will be a scarce commodity if eventually something changes there.

There had been a lot of bad news, lack of strategy, Ndi protectionism and media bashing. But just how long will this bad news continue? If we wait for all these problems to be solved, we might not see it to buy at the price it is selling now. I expect a price loss tomorrow, but a rebound next week will not be out of place.

[nezvest]

Originally Posted by c kenneths

I have just decided to take a plunge in Transcorp shares. Its not my ideal selection or my best fundamentally sound stock at the moment but sometimes you go with your instincts. Something tells me that this company, although not profitable at the moment will be a scarce commodity if eventually something changes there.

There had been a lot of bad news, lack of strategy, Ndi protectionism and media bashing. But just how long will this bad news continue? If we wait for all these problems to be solved, we might not see it to buy at the price it is selling now. I expect a price loss tomorrow, but a rebound next week will not be out of place.

I just think you did not make up your mind in time. I am afraid of this transcorp thing for now

[obinnaD]

Originally Posted by nezvest

I just think you did not make up your mind in time. I am afraid of this transcorp thing for now

I wish the fears about Transcorp will be better defined - not in the context of people who want to double or tripple their investment in 6 months, but in a longer/medium term investment context.

Is the fear that of a company that will collapse soon, fold up or never make it to profitability? Besides the negative publicity which is due to the company's perceived connections to Obasanjo, Is it really an unviable venture?

[arcade]

Originally Posted by obinnaD

I wish the fears about Transcorp will be better defined - not in the context of people who want to double or tripple their investment in 6 months, but in a longer/medium term investment context.

Is the fear that of a company that will collapse soon, fold up or never make it to profitability? Besides the negative publicity which is due to the company's perceived connections to Obasanjo, Is it really an unviable venture?

Honestly, in a longer/medium term investment context, I think transcorp is viable. You got the point of negative publicity and Obasanjo connection. Another point worth considering is the fact that the corp was just set up and got a large buy like NITEL/MTEL so there is bound to be some teething problems. It is not like Dangote group who has been in business for so long so would not have serious problems managing their sugar or cement mega plants, is it?

[hispy99]

NCP directs BPE to begin sale of NITEL

The Punch: NCP directs BPE to begin sale of NITEL

[obinnaD]

Yes, this is very true.. BPE has been given the nod to shop for new investors.
Transcorp still gets 22% though.

BusinessDay... the voice of business - Government begins search for investor for 51% equity in NITEL/MTEL

[ofoegbu]

I am wondering if anyone knows the status of the N67 billion (about $550 million) bank loan on Transcorps books (as shown in the offer prospectus) as at October 2006? How much of it was paid off with the money raised from the public offering that ended in February 2007? How much of the N4.7 billion of interest in October 2006 was actually paid and how much interest has the company been paying since then or has the interest been capitalized i.e. added to and compunded to the current bank debt of the company? The reason I ask is because all that money will have to be paid back to the bank before any equity investor gets a dime from the company. This goes directly to the viability of the company.

[iluvstocks]

Ofoegbu, you have just raised a very important question about Transcorp debt. I do not have the answers and would be very happy if somebody on this forum can help us out with that.
Inspite of this, I think it will be interesting to see how the bidding goes. My guess is that NITEL/MTEL is worth a lot more than it was when Transcorp bought it because of the current business/ political climate in the country and the increasing interest in investing in Nigeria. I also think MTN declaring 78B profit will not hurt.
I still think people are missing the other Transcorp story. They have good exposure to fantastic sectors in Nigeria i.e Transcorp Hotel and the oil wells they own. I hope I am correct but the wells were acquired when crude was less than $60 a barrel. If crude remains above $100 a barrel, they have basically doubled their investment.
Maybe I don't know what I am talking about but valuing a company with all these assets at 88B naira when Costain is valued at over 100B is just not right.

[Apache]

Originally Posted by iluvstocks

I still think people are missing the other Transcorp story. They have good exposure to fantastic sectors in Nigeria i.e Transcorp Hotel and the oil wells they own. I hope I am correct but the wells were acquired when crude was less than $60 a barrel. If crude remains above $100 a barrel, they have basically doubled their investment.
Maybe I don't know what I am talking about but valuing a company with all these assets at 88B naira when Costain is valued at over 100B is just not right.

Ehem!
Just to say one thing, can someone confirm what transcorp got? My guess is that they got an OPL license which means Oil has not been found in those blocks. Please correct me if i am wrong but if they got a prospecting license, that means they still have to search for oil. Now the engineers on this forum can give us an idea of what the amount of capital needed to search for oil involves. I belive it runs into billions of dollars
Now after finding the oil (and they had better find it). they still have to get a mining license and come up with the capital to drill this oil. In addition to the huge capital involved which they don't have, it will take an average of btw 5-10years (or even more)for all this process to occur before you can start seeing oil. Add that to their current debt of =N=67b as @ 2006.
Question - are you ready to wait that long? Will the price of oil still be as high as above $100? what is the opportunity cost lost of money invested in Transcorp now and btw 5-10 years time.
I am not too optimistic abt this Transcorp stuff but one thing i have started realising is that you can make some very good monies out of it for speculative purposes. That i think, is the direction we should be advising members on this forum to head.
Transcorp has shown with time that its resistance level is within the =N=3.2 range. If it reaches such a price, one can enter and sell at 25% gain.
Please plenty caveat emptor on this my advise as nobody should blame me if the strategy no work. I won't even try it myself

[obinnaD]

For clarity, I have no stakes in Transcorp...

It beats my imagination, why the huge negative perception about this company. I believed the idea was good, but it never got the support of the Nigerian masses who simply thought it was some way to make the rich wealthier and poor poorer. We would rather have foreign firms holding our economy than taking out destinies in our hands. The refineries are classical examples of disposals that met public outcry, and whose revocations have yielded little after 1 year.

I make bold, and I know a lot of people will disagree with me, that the problem with Transcorp lies with Nigerians. We decided to punish an idea because of the so called man behind it- OBJ. By the way, I don't think OBJ was a great leader, but we can't rule out the fact that we saw more proactiveness in policy implementation in his time than we had seen before him or are seeing after him.

Maybe, Transcorp should just be dissolved and let Nigerians find something else to vent our OBJ anger on. It is so simple, we would rather have foreigners running the big-bucks businesses in Nigerian than have our own people do that. Bear Stearns was in the verge of total collapse - its taking the intervention of the Feds, to the tune of $30b to salvage it and save the pride and apparent blow that will have on the American economy. What happened with our privatization was not new... it happened in Russia, Britain and south korea. It is not working in our case cos we have refused to let it work...fire brigade approach to doing things...expecting instant solutions to homungous problems and never ever trusting our fellow Nigerians.

I'm not standing in for any company, but again, like I have always tried to address social issues like these, until we avail ourselves of kind reality, we just might never get it!!!

Maybe everyone should sell off their shares in the company.. SELL SELL SELL !!!!!!! Let's force the price to crash and petition to have it delisted.

[timothywill]

Originally Posted by Apache

Ehem!
Just to say one thing, can someone confirm what transcorp got? My guess is that they got an OPL license which means Oil has not been found in those blocks. Please correct me if i am wrong but if they got a prospecting license, that means they still have to search for oil. Now the engineers on this forum can give us an idea of what the amount of capital needed to search for oil involves. I belive it runs into billions of dollars
Now after finding the oil (and they had better find it). they still have to get a mining license and come up with the capital to drill this oil. In addition to the huge capital involved which they don't have, it will take an average of btw 5-10years (or even more)for all this process to occur before you can start seeing oil. Add that to their current debt of =N=67 as @ 2006.
Question - are you ready to wait that long? Will the price of oil still be as high as above $100? what is the opportunity cost lost of money invested in Transcorp now and btw 5-10 years time.
I am not too optimistic abt this Transcorp stuff but one thing i have started realising is that you can make some very good monies out of it for speculative purposes. That i think, is the direction we should be advising members on this forum to head.
Transcorp has shown with time that its resistance level is within the =N=3.2 range. If it reaches such a price, one can enter and sell at 25% gain.
Please plenty caveat emptor on this my advise as nobody should blame me if the strategy no work.

thank you for that exposure, i which you can tell them more. people should stop this idea of 'Transcorp has good Fundamental' with all those GHOST investment people feel they had. nobody ever see the staff or hear about the engineers working on the oil block for Transcorp and you keep on talking about the oil block, that is not the issue, but i beg, instead of waiting for 5-10 years before reaping the gain of investing in Transcorp on GOOD FUNDAMENTALS, i will rather wait 1 week to reap the same gain from the dying UNTL on SPECULATION.

[Apache]

Originally Posted by obinnaD

For clarity, I have no stakes in Transcorp...
It is so simple, we would rather have foreigners running the big-bucks businesses in Nigerian than have our own people do that. Bear Stearns was in the verge of total collapse - its taking the intervention of the Feds, to the tune of $30b to salvage it and save the pride and apparent blow that will have on the American economy. What happened with our privatization was not new... it happened in Russia, Britain and south korea. It is not working in our case cos we have refused to let it work...fire brigade approach to doing things...expecting instant solutions to homungous problems and never ever trusting our fellow Nigerians.

I quite disagree with you here. the banking sector is been run by Nigerians and nobody is against it, Globacom is paticipating in the telecoms sector and nobody is witch-hunting it. Oando is into the oil business for real and nobody is going against them, same with Conoil and the list can go on and on.All these companies are been run by Nigerians. So it is not a question of Nigerians not trusting nigerians. It is manner in which they went about it. Most of the companies mentioned above are public companies and they have also come out to raise funds from the public. So when things begin to go wrong, pple will definitely shout.
If Transcorp had turned Nitel around by even 1% a year after they bought it, you and i won't be sitting here typing this mail rather we will discussing the forecast PAT, EPS, PE etc.
Like i had mentioned earlier, transcorp will one day become profitable and begin to pay dividends. The problem is that for some companies like Eterna oil, Costain, This took them over 10 years for this to happen. Isn't there a possibility that money invested in other companies within this period will far surpass whatever appreciation Transcorp will make in the 10years combined. add this to the fact that Transcorp is not an illiquid stock thereby limiting the level to which it can rise.
Chei, I can't believe i dragged myself into this Transcorp debate again

[Babs_O]

As the debate goes on back and forth here SELLING and BUYING goes on in high volumes for real. Some are making money right now. Even I read a short term guru thinkering on buying Transcorp right away for the shorterm benefit.

CHART experts what does the chart (oracle) say. I am ready for both short and long term plays on Transcorp. If the chart says it will go scarce soon then I better load more for the short-term ride till the long term picture become clearer. It has already made me a cool 50% in 2 months. (Also made me losses from the IPO)

Also I think Tom is trying but only an insider can give us a better picture. I say he has tried since he won over the Senate before Odey pulled a fast one and he still nipped it in the bud quickly by reaching Yaradua.

On debts Transcorp owes. What about the assets. Even a license is an asset you know. I 'm not an expert in valuation but I have read some analyst reports on valuation which I think is more reasonable. They have more assets than debts !

On Baba (OBJ). He is a leader who has achieved much. A leader doesn't necessarily need to be the originator of an idea but must be able to spot it and give it space to be. Achievements - Banking Consolidation (via Soludo), Debt repayment (via Okonjo) Transcorp (via ?) ...etc. The benefits we are seeing today with the bouncing stock market are traceable to his past leadership !.

[c kenneths]

As we arguing back and forth about whether to buy transcorp or not, the stock chalked another 16 kobo in the middle of this bear market. A Case of indecision as the elephant meat is beign shared

You go chop?

[nezvest]

C Kenneths, you must understand that transcorp is a very volatile stock and inconsistency in government policy is against the continous growth of the stock in the market. I recommend that people only invest only money they can abandon if things turn out bad for transcorp.

[Yusuf]

Originally Posted by c kenneths

As we arguing back and forth about whether to buy transcorp or not, the stock chalked another 16 kobo in the middle of this bear market. A Case of indecision as the elephant meat is beign shared

You go chop?

Dear Forum Member,

Can someone please confirm this? I learnt that the issue with T-corp is not only about Obj. Someone just told me that all companies that Madam NSE (Ndidi Okereke) has sat as a board member has not been doing well. I challenged the person to give me example which he actually mentioned ABOSELDEHYDE LABS. PLC, ONWUKA HI-TEK INDUSTRIES PLC. etc. I have confirmed that of Aboseldehyde Labs but I could not confirm Onwuka. Please can someone help confirm and also research more on other companies that Madam NSE is a board member?

[hispy99]

Originally Posted by obinnaD

For clarity, I have no stakes in Transcorp...

It beats my imagination, why the huge negative perception about this company. I believed the idea was good, but it never got the support of the Nigerian masses who simply thought it was some way to make the rich wealthier and poor poorer. We would rather have foreign firms holding our economy than taking out destinies in our hands. The refineries are classical examples of disposals that met public outcry, and whose revocations have yielded little after 1 year.

I make bold, and I know a lot of people will disagree with me, that the problem with Transcorp lies with Nigerians. We decided to punish an idea because of the so called man behind it- OBJ. By the way, I don't think OBJ was a great leader, but we can't rule out the fact that we saw more proactiveness in policy implementation in his time than we had seen before him or are seeing after him.

Maybe, Transcorp should just be dissolved and let Nigerians find something else to vent our OBJ anger on. It is so simple, we would rather have foreigners running the big-bucks businesses in Nigerian than have our own people do that. Bear Stearns was in the verge of total collapse - its taking the intervention of the Feds, to the tune of $30b to salvage it and save the pride and apparent blow that will have on the American economy. What happened with our privatization was not new... it happened in Russia, Britain and south korea. It is not working in our case cos we have refused to let it work...fire brigade approach to doing things...expecting instant solutions to homungous problems and never ever trusting our fellow Nigerians.

I'm not standing in for any company, but again, like I have always tried to address social issues like these, until we avail ourselves of kind reality, we just might never get it!!!

Maybe everyone should sell off their shares in the company.. SELL SELL SELL !!!!!!! Let's force the price to crash and petition to have it delisted.

I do not agree that the problem of Transcorp lies with Nigerians, rather the problems of Transcorp lies with Transcorp. Was the decision to pay $500million for NITEL a "joint Nigerian" decision or a Transcorp board decision? Is the lack of technical expertise to run NITEL my fault or the fault of other Nigerians? How many Nigerians were involved in the sacking/hiring of 2 or 3 GMDs at Transcorp to date? No matter how much Nigerians hate Transcorp or OBJ, if the company comes out tomoroow with fantastic results, everyone, including yours truly, will rush to hold a piece of the firm. I do not want to own a piece of a non-performing firm whether it was sponsored by OBJ or not.

The bail-out of Bear Stearns is another issue. The Fed had to act to protect the integrity of global financial systems and not to save Bear Stearns as a firm or protect Bear Stearn's pride (Bear is dead as a firm by the way, except the acquisition by JPM falls through). When financial systems or the economy is not imperilled by the implosion of a firm, nothing is done to save it (ENRON is a perfect example).

[iluvstocks]

ObinnaD, I really feel your frustration. Sometimes I wonder how some of our leaders are able to do it with all the antagonism from our people. Obasanjo left 10 months ago but my people just refuse to move on. I guess I am just not smart enough to get it.

Apache, I am not an oil guy but I don't think they need to do all the things you are talking about. They can go into partnership with other companies to monetize the license. We still do not have clarity on the two blocks they own but from what I heard they are pretty lucrative blocks. I will appreciate if anybody can shed some light on Transcorp’s OPLs.
Talking about management, I actually think Transcorp has a pretty good management. Please let us not overstate the role of the board of Directors of a company. The most important person in a company is the Chief executive officer and for Transcorp, it is Tom Itseghohi. I don’t know him much but I did check out his resume. Pretty impressive, I must say. I also heard he’s been doing some pretty good recruiting. Itseghoshi has said several times that what he needs the board to do for him is open doors that are otherwise hard to open; and that he has been getting. We saw that in the reversal of the government’s reversal of the sale of NITEL. I still maintain that Transcorp is highly undervalued and we’ve been seeing that in the continuous rise of the stock despite high volume.
Again, for disclosure purposes, I own quite a bit of Transcorp. I bought some around 3 naira and bought more around 4 naira.