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Transcorp Not Worth The Hype - Business - Nairaland

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Tony Elumelu In The Gym At Transcorp Hotel / CBN Celebrates Its "Achievements" At Transcorp Hilton (photos) / An Aerial View Of Nicon Nuga Hilton (Now Transcorp Hotel) Abuja In 1987 (2) (3) (4)

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Transcorp Not Worth The Hype by damadsuite(m): 5:44pm On Jan 12, 2007
My broker just contacted me to SELL off transcorp shares. There is so much hype about the strength of this company even when there is no subtential business activities surrounding this so called mega-company. The Nitel they bought is still in a dilapidated state. The Oil activities they said is still no where to reckon with. Nicon Hilton is the only truly functional business Transcorp is currently into and I don't see the envisage return from just Nicon Hilton.

The risk is quite high when investing basing ones analysis on future performance or an envisageD structure. Nigeria business environment is very competitive and any company can be shoked out easily especially when they are new comers. The telecom sector is almost shoke up and transcorp is certainly not going to find it easy.

Somebody should better tell us why we should buy shares of this envisage mega giant. I will rather buy their shares only when the structure they claim is on ground. Love low risk.
Re: Transcorp Not Worth The Hype by LanreDaMan(m): 8:03pm On Jan 12, 2007
Try thinking Long term and not short term .
Re: Transcorp Not Worth The Hype by damadsuite(m): 8:19pm On Jan 12, 2007
If long term, Then no rush in into this stock. The opportunity truly will remain for life if they are able to consolidate on the large capital they will get after this IPO. Well I am watching the outcome of the company and the business structure. I don't like joining the crowd.
Re: Transcorp Not Worth The Hype by IykeD1(m): 8:29pm On Jan 12, 2007
@damadsuite

My broker just contacted me to SELL off transcorp shares. There is so much hype
about the strength of this company even when there is no subtential business activities
surrounding this so called mega-company.

Did you just say that your broker just called you to "sell off your transcorp shares"?

Wonders!!! If you don't mind my asking when did you buy the shares, was it during
the Private Placement or during its Introduction to the market?

I have to say "what are you smoking" if indeed, you bought Transcorp shares within
the past 1 year, have just decided to sell it off, and are now asking anyone to provide
you reasons not to or to buy more. You got to be a joker!
Re: Transcorp Not Worth The Hype by damadsuite(m): 10:45am On Jan 13, 2007
My broker thought I bought during the private placement because he talk so much about it before the private placement. We have trading relationship with more than 7 brokerage firms because of our market data services.

Investing like most other things requires that you have a general philosophy about how to do things in order to avoid careless errors.

My argument against Transcorp is not that it is not capable of becoming the nations golden egg but I am particularly against the gambling tendency almost all are showing towards this stock or company shares.

For enlightenment purpose, I will like to raise some questions we need to answer concerning Transcorp:

What is the real VALUE of Transcorp?
An investor’s purpose should be to know both the price and the value of a company’s stock. A good investor is one who purchases a company’s share at a large discount to its intrinsic value. Have you asked yourself, what would be the value of Transcorp if it is Liquidated or sold tomorrow. I mean the net worth of Nicon Hilton, the dilapidated NITEL/MTEL and the other licenses they have been able to get from the government.

What has been the Growth of Transcorp since inception?
Experienced investors look at the underlying quality of companies and the rate at which it is growing in order to analyze whether to buy it. Transcorp has not been able to show a dogged growth capability since their inception as a giant politically backed corporation. Again there is no vital growth statistics for us to base our analysis on. Buying this stock now as a growth investor is not substantiated but sentimental ………,  Gambling Tendency!!!

• [b]What would be my Annual Return?[/b]Many investors buy stocks primary because of the stream of dividends they generate. I don’t think we should be expecting dividend from Transcorp for the next couple of years and if this is case, then this share is likely to be abandoned in years to come thereby stalling the share appreciation. Nigerians are basically “EPS investors”.

Finally my fellow Nairaland users, there is a great difference between investing and speculating. What are the odds of winning the lottery jackpot? Maybe 1 in every 10million.
You don’t need a card dealer or dour stranger to gamble. There are plenty of stock market gamblers who do an admirable job of losing their money on seemingly legitimate pursuits. I think investors gamble every time they commit their money to something they don’t understand.

There are a lot of questions you should ask about a company before you throw your hard earned cash at a “hot” stock. There is nothing too hot about losing your money because you didn’t take the time to understand what you were investing in.

Remember: Every Naira that you speculate with and lose is a naira that is not working for you over the long-term to create wealth.

Speculation promises to give you everything you want right now but rarely delivers; Patience almost guarantees those goals down the road.

There is nothing bad about adding Transcorp shares to your stock investment portfolio after they most have been able to refurbish NITEL, build their energy business and other “big big”  businesses they promises.

WHY THE RUSH!!! …………………,  Gambling Tendency
Re: Transcorp Not Worth The Hype by IykeD1(m): 2:14pm On Jan 13, 2007
. . . and some of the biggest investors in the world (not talking about people working for brokerages, issuing houses, etc)
bought into things that lacked all the fundamentals that the business schools will tell you to leave alone. And yet, made
billions out of them. The best investors do make gambles at some point or the other. They hand it over to the guys with
MBAs and rest of us when they are ready to cash out!

Beats me, but I don't see much difference between gambling and the stock market or should I say there are lot of similarites
between them. The stock market wouldn't be what it is or holds the attraction if the "rush" is missing. If we have to wait for
50 years before our N1 can turn into N2, I might as well just dig a hole and put the money in there. Don't tell me you haven't
benefited from this "rush" at one point or the other. Were you to violate your "golden constitution" of investment and risked
buying into Transcorp during the private placement, I know you would have cashed out by now with a 230% gain - the rush
would have been okay for you then, right?
Re: Transcorp Not Worth The Hype by damadsuite(m): 4:58pm On Jan 13, 2007
The philosophy behind your investment principle is what counts when it comes to investing. Because one would have made over 100% does not make the rationale behind buying stocks whose chances are merely speculative right. There are many other shares with well defined structure and growth prospect to buy for the main time.

Well, institutional investors are quite different from individual speculators.
Re: Transcorp Not Worth The Hype by IykeD1(m): 7:43pm On Jan 13, 2007
Damn right, I am investing for self, not for or on behalf of any institutions.

I never said buy a stock because one would have made 100%, I certainly
did not suggest to you to buy Transcorp now because of same. As a matter
of fact, in stock investment, "would have made" is an oxymoron. Its either
you made, or lost, or are hoping to make.

Finally, if I was to be investing on behalf of an institution, this will be one
of the last places I will come looking for clues. Most of us are just bunch
of morons with little or no investment experiences.
Re: Transcorp Not Worth The Hype by damadsuite(m): 3:25pm On Jan 14, 2007
I think Nigerians have got a lot of nerve and gets angry at almost anything. I am just sharing my opinion. I think we all can't be on one side of the coin.

Our diversity is the cream to our race. Love u all
Re: Transcorp Not Worth The Hype by IykeD1(m): 4:06pm On Jan 14, 2007
Agreed, just wasn't sure where you were coming from.

My apologies.
Re: Transcorp Not Worth The Hype by damadsuite(m): 5:12pm On Jan 16, 2007
Transcorp has been a major debate on most national dailies last week. Check the Nations, Guardian and Financial standard and you will see what I am saying.

Those Transcorp angelist should be careful about how they sell their idea about this company stocks.
Re: Transcorp Not Worth The Hype by windywendy(f): 7:11pm On Jan 16, 2007
Of course there would be a lot of debate -- and that's just one more reason to avoid. If it were a sound investment, that would be clear and there would be no hot arguments about it take dangote sugar for instance. Like one of the world's greatest investors buffet would say, if you're having a hard time convincing yourself about the viability of an investment decision, avoid it.
Re: Transcorp Not Worth The Hype by damadsuite(m): 10:11am On Jan 17, 2007
Thanks for your post. That is very convincing and intelligent
Re: Transcorp Not Worth The Hype by oshkosh(m): 11:30am On Jan 17, 2007
Of course there would be a lot of debate -- and that's just one more reason to avoid. If it were a sound investment, that would be clear and there would be no hot arguments about it take dangote sugar for instance.

The reverse could also be the case. Most high growth stocks tend to be unpopular initially, but gather momemtum as the fundamentals become more acceptable to the 'general' investing public.  So whilst there are risks - real and percieved, some may view this as an opportunity.

At the point when all the indicators are mature enough to attract the fundamentals-driven investors, the intrinsic value of the company will already be reflected in the share price.

This is the scenario I'm certain will play out,  and you may quote me on this - 

-Ndi-Okereke steps down as Chairman sometime after IPO.
- A new President takes office in Nigeria and soon affirms his support/indifference to TransCorp. Better things to do with his time than politically motivated insunuations,
- TransCorp exceeds most pre-IPO projections, projects dividend payment in two years, market reacts favourably.
-  Announcements that "new" partnerships formed with foreign oil firms to develop oil blocks. Quick turnaround projected. Again, market reacts.
- Mtel increases capacity, adds 5,000+ new lines, embarks on extensive promo to include free calls. Market share starts to creep up slowly, shares follow in tow, 
- Nitel changes pricing structure (especially for SAT-3), increases capacity, leverages existing assets to increase revenue.

All these will be pushed to the press and will reflect positively on the company. Note that perceptions couldn't be worse than it  is now, and sentiments have everything to do with share price of quoted companies on the xchange.

However, for those averse to the current 'risk' profile of TransCorp, my advice is to wait for 1 - 2 years when Transcorp will have a track record and EVERYONE views it favourably, at which point  you may consider buying @ N40 - N45 per share.
Re: Transcorp Not Worth The Hype by egoldman(m): 4:22pm On Jan 17, 2007
Ok guys ,i have been reading and researching quite a lot about stocks and Nigerians stocks in particular .I have 150,000 naira to try it out with, 50,000 i plan to invest for the long term and 100,000 i plan to invest for the short term.
so here is how i plan to go about this; 50,000 i would use to buy transcorp shares ,this should be for the long term as i do feel the company would be goldmine grin in few years to come.
now for short term ,i understand that buying from the secondary market means that i should get the certificates in few days time (i could be wrong ) as there are old time stockowners that have the certificates before the IPOs ,so this would enable me to easily sell them on the niger stock exchange when i feel the value have appreciated enough,then i would buy again from secondary market,sell as the value appreciates and so on and so forth .
so now with my remaining 100.000 i would invest 50,000 in dunlop,which sells for 4.16 naira as of today as i think the company future prospects are good especially cos of their lastest All Steel Radial Tyre (ASRT) factory.
My remaining 50,000 would go to zenith bank , having researched their company from several sources ,even outside Nigeria ,i have seen that they have so much respect and have been awarded quite some awards for their efforts,i have also been following their income for quite sometime now and their innovation in the banking sector in Nigeria,there are even more reasons why i like zenith bank grin
this is how i plan to give the Nigerian stock market a try with my little 150,000 naira.i would like some to give their opinion if my plan is good or not grin
Re: Transcorp Not Worth The Hype by damadsuite(m): 3:44pm On Jan 20, 2007
egoldman:
As I previously said, the principle behind your investment drive is more important than mere casual advice from people. How are you sure people that wants you to buy a particular stocks are doing so because they already have their money stuck there. This because as more people rush into a stock the higher the price of the stock gets.

My advice is for you to follow your chosen investment principle. Over 100K is no small money for you to throw away because somebody advice you to.


Happy investment!!!!  wink
Re: Transcorp Not Worth The Hype by damadsuite(m): 4:03pm On Jan 20, 2007
Delords
My bro, your wits are extra-ordinary and very amusing. True talk man. Who do we sell to later?

Do you know even if a company performs extra-ordinarily without much demand on its shares at the secondary market, it won't make any difference in price margin (price appreciation). This because price movement is determined by the forces of supply and demand. I don't see much demand on Transcorp after this primary market show as many are already jumping in. While buy (demand) later at the secondary market. Our only hope for profit from transcorp will be bonus shares.
Re: Transcorp Not Worth The Hype by oshkosh(m): 11:14pm On Jan 20, 2007
I have to say some of these comments are a little amusing and betrays a fundamental misunderstanding of the stock market.

This principle applies to stock markets around the world and not just transcorp or the NSE.  Who is buying Nestle today, as it's valued over N200. Who is buying ETI. The truth is that there are markets beyond the shores of Nigeria and institutional investors that will find the track records of these companies appealing. The current bull in the Nigerian capital market (and most emerging economies like China, Venezuela etc) is fueled by foreign inflow of investment fund. Are you aware that the 30% growth of the Chinese market last year was directly attributable to foreign investment? Many people become extremely wealthy in fast growing markets like Nigeria, whilst some get burnt if they end up at the tail end of the spin.

There is however a real risk of a crash or 'sudden correction'  in a market that is over-valued, and this is a common concern in  Nigerian investment circles. With interest rates set to drop significantly and inflow of pension funds into the market set to continue, there is likely to be a continued northward movement of the All Share Index until other capital market instruments like options, derivatives etc are introduced.

TransCorp isn't for everyone. I dare state that I expect 90% of the general population not to invest in a company like TransCorp. This is a company that can make multi-millionaires of those that dare. But it may also go the other way. So do your homework and only take on risks you're comfortable with. However, for those who care to listen, my advice is to buy into TransCorp today or we'll be back here in December argueing whether N15 is a fair price!
Re: Transcorp Not Worth The Hype by akindayor(m): 11:58pm On Jan 20, 2007
Following the thread a feel so elated about how much of transcorp is known and the speculations trading places freely,its a sign we all ve accepted that transcorp has come to stay for good andlike some our fears dou genuine are human in nature.
Justlike damadsuite said u must ve a philosophy ,an investment principle to guide you against sentiments which will come later and prevent u from making decisions u mait l8tr regret
I'll share mine with u for calrity my own investment guide (as per transcorp) is to invest for the future of myself and kids am looking 5years down d line and bliv me i didnt invest less dn 1M during the private plcement it was money i could do witout!
so if transcorp does not yield or perform to my expectations in the nxt 2years i can still manouver and chnge tactics easily but my strategy remains (dis mait not b d case 4 most pple).
i couls easily sell off bits in pieces bt long time i bliv tcorp has come to stay and for good so am not in rush at all get it strait this is my opinion alone
Re: Transcorp Not Worth The Hype by akindayor(m): 12:02am On Jan 21, 2007
Iyke-D:

. . . and some of the biggest investors in the world (not talking about people working for brokerages, issuing houses, etc)
bought into things that lacked all the fundamentals that the business schools will tell you to leave alone. And yet, made
billions out of them. The best investors do make gambles at some point or the other. They hand it over to the guys with
MBAs and rest of us when they are ready to cash out!

Beats me, but I don't see much difference between gambling and the stock market or should I say there are lot of similarites
between them. The stock market wouldn't be what it is or holds the attraction if the "rush" is missing. If we have to wait for
50 years before our N1 can turn into N2, I might as well just dig a hole and put the money in there. Don't tell me you haven't
benefited from this "rush" at one point or the other. Were you to violate your "golden constitution" of investment and risked
buying into Transcorp during the private placement, I know you would have cashed out by now with a 230% gain - the rush
would have been okay for you then, right?
well said Iyke
5 years down d line i'll sell mine to dem @ N50 per share after making like 500% gains minimum and dey ll still rush to buy cos dey failed to come in at the rait time (NOW!)
Re: Transcorp Not Worth The Hype by akindayor(m): 12:13am On Jan 21, 2007
Delords:

I may be wrong but I am not here to scare you, but my greatest fear with transcorp is,
If we all buy TRANSCORP (100% Naija) who do we sell to when we want to sell, even if the 7.50 per share becomes N7,500 each and everybody has it.
This might sound foolish but i have my reasons for this.

Aside this, just want to inform you that there are lots of panic in the market, people are selling below the N7.50 in the secondary market, don't let the N9.71 fool you.

Ask your stock broker
when and were in the world ve u heard that d nationals all ve the same amount of stocks of a company in same qnty as u might think pple chnge mkt chnge
this is short of being pessimistic and do u also think naija ll remain same for the nxt 5-10 years down d line? i can go on an on to let u know ur fears dis in particular is uncalled for bt i wont cos it mait serve no purpose am afraid.
besideswhere u got ur info is impaired cos b4 the price of tcorp was pegged it was on a rising trend if this does not suffice
den wait till right in ur nostril it bcoms a reality den u can sell tcorp shares to south africans and naija in diaspora bt pls dont miss the train!pleeasee!!!
Re: Transcorp Not Worth The Hype by egoldman(m): 7:32am On Jan 21, 2007
Do you know even if a company performs extra-ordinarily without much demand on its shares at the secondary market, it won't make any difference in price margin (price appreciation). This because price movement is determined by the forces of supply and demand.


Am a novice when it comes to stock trading ,but let me ask,is it realy possible that while a company is doing well,posting good revenue and showing other positve signs for the future,
would such a company not always attract people to desire to own it shares ?i ask this with regards to the above quote ,thank you .
Re: Transcorp Not Worth The Hype by akindayor(m): 12:33am On Jan 22, 2007
i appreciate your analysis quite informing and don't mind me its just that some of the things u said didnt appeal to the optimistic side of me even my Realistic sides queries these decisions and more but my heart rules because i bliv in d nigerian project wh transcorp stands 4 (100% nigerian).
Moreso as u've rightly mentioned tcorp has got enough in its arsenal that with good mgt it can only deliver outstanding dividends not only so the market is quick to identify succeses no matter hw marginal and lastly their are more spectators outside (ie still waiting 4 transcorp to skyrocket or crash) so, any positive indication will only result in values increasing in exponential proportions this is what ve gather frm this forum so far. rather than bite my fingers and wish i had bought tcorp, i'll bite my fingers and hope it all works well because really it canT be much worse than this.THIS IS A RISK I GLADLY TOOK grin!
Re: Transcorp Not Worth The Hype by damadsuite(m): 5:16pm On Jan 22, 2007
akindayor

Whaoh your expectation is quite watery: Transcorp hitting N7,500 in 7years time. That is a blast that can kill a man. This means your N1,000,000 investment will be worth over N1,000,000,000 (N1Billion). Na wa for you. Your expectation is quite interesting. I think I may join the game even if it is gambling.

I will not forgive myself if it got there without me.

Well principle says wait till the structures are there. It is not bad to buy transcorp at N15 when the structures are already in place if ever it is really going to get to that height.

Just sharing my opinion. I am still a spectator on this company.
Re: Transcorp Not Worth The Hype by akindayor(m): 4:07am On Jan 23, 2007
damadsuite:

akindayor

Whaoh your expectation is quite watery: Transcorp hitting N7,500 in 7years time. That is a blast that can kill a man. This means your N1,000,000 investment will be worth over N1,000,000,000 (N1Billion). Na wa for you. Your expectation is quite interesting. I think I may join the game even if it is gambling.
Just sharing my opinion. I am still a spectator on this company.
@ damadsuite
u getting it all wrong i never said anything close to N7,500 not at all
wat i said was in 5years down d line,
Re: Transcorp Not Worth The Hype by damadsuite(m): 10:34am On Jan 23, 2007
akindayor Sorry, I misunderstood you. I really mean no offense
Re: Transcorp Not Worth The Hype by akindayor(m): 1:51am On Jan 27, 2007
no offense man dats wat nairaland is for speak ur mind albeit not offensively
catch you with transcorp shares and i'll sue u for misleading nairalanders with ur 'transcorp not worth the HYpe@ shizzle
ger it?
Re: Transcorp Not Worth The Hype by Loads: 1:59pm On Feb 04, 2007
I leave in UK and no all about Venture Capital companys, many are very successful. the vision of Transcorp is to be the most successful venture Capital companyin africa and a competitng one at the world stage. If you have the money invest in them they will be a leader of tomorrow businesses. I dont have enough time to write my findings on this company. The only thimg that can make Transcorp fail is if we have a determined government that want to put it out of business. Transcorp is a goldmine long term or short term its going to be the biggest venture capital company. The Management team is also full of fantastic business leaders that won't want to destroy their names. Good luck people
Re: Transcorp Not Worth The Hype by ebony47(f): 3:18pm On Feb 04, 2007
Yes, Loads, exactly. I believe that Transcorp is not a company on its own, but a venture capital firm that invests client money into new ventures or companies that have a high income potential but require a turnaround in their operations. To accomplish this, they need experience people that analyze companies and their profit potential thoroughly, invest following a payback period, and return the profit to investors.
I invested in the private placement of Transcorp shares, then going for 3 naira now at 2.5 times the price. So I already have a 250% appreciation. I understand the fears of Damadsuite, but my dear, I have come to realize that sometimes using the concepts of Business school in Nigeria does not work. A lot of other factors affect the Nigerian stock exchange than abroad.
Also, you say Nitel is operationally inefficient, true, but did you know that all of the current telecom companies from MTN to GLO have to buy a license from Nitel? Imagine if Nitel was run by qualified, experienced people,

Please I am not sure if egoldman invested in Dunlop before the deadline, I hope not, because based on Dunlop's financials, Dunlop went into the market for equity to pay off their debts!!!! Not a good buy at this time. However, Michelin is pretty much out of the Nigerian market, so I hope that Dunlop can reconsolidate and restrategize to take over Michelin's market share and enter into producing similar useful products, It is definitely long term, I hope that you are cool with leaving your money in for a while, cos I feel that may be the only way to make some money on it,
Re: Transcorp Not Worth The Hype by Omoba3(m): 10:24pm On Feb 04, 2007
A White Paper On Transcorp - Analyst's Report

Draw Your Own Conclusions!

This is a pdf file for my personal viewing. You can equally subscribe to WWW.PROSHARENG.COM.

I am unable to attach the main file as Nairaland server says its too big.

Here is a cut and paste of the analyst's opinion and conclusion.




The Initial Public Offering of
Transnational Corporation (Nigeria) Limited
An Independently Prepared
White Paper
January 2007
, Intelligent Investing

J9. Opinion
Conducting a review on Transcorp has not been easy and providing the missing gaps
needed to achieve a helicopter view of the facts involved has been any less easy.
We can however suggest a conclusive investment decision at this time, based on the
analysis done in this report.
Transcorp represents a vehicle that promises so much change and opportunity to transform
the business landscape, whilst transferring the wealth of the country into the hands of its
people through the platform of the capital market.
No other scheme, platform or initiative to date, has been able to position every member of
the investing public with the opportunity to:
get a return from the oil produced in the country where all the key players are privately
owned companies. This will be the first time a player in the upstream sector would give
investors a share of the ‘oil dollars’;
get a return from the ever growing telecoms industry where, again, all the key players
are also privately owned and foreign dominated business (except for one – Globacom
Limited, a private and non-quoted company);
get a return from a shipping business, an otherwise capital intensive and exclusive but
highly rewarding business;
get a reward from the largely capital challenging agricultural processing and export
business; and
get a reward from tourism, entertainment and the widely acclaimed/regarded but
underdeveloped movie industry .
The business offer of Transcorp can be looked at from so many perspectives; yet the people
arrive at one seemingly ‘patriotic’ conclusion – “on paper, it is a bankable project”. For this
reason and more, it has been argued that people should invest in the company to give
Nigerians a chance to have a say in how the above deliverables are achieved. The logic is
compelling.
This thinking is an informed one and it naturally dovetails into the second school of thought
who utilizes the argument of ‘collaborative analysis - if that is the case, we should
understand what we will be managing’. The notion that the gains of democracy which
appears to have eluded Nigerians is now within grasps could not be sweeter than the
opportunity to actually influence the course of nation building through the democratic vote
which shareholding confers.
This school of thought has found an unusual ally with the hitherto pessimist group, who
now seem to have a new way of looking at the public offer. In a classic ‘domino effect’
response, they are demanding an answer to the question: What does an investment in
Transcorp translate to?
Clearly, the unspoken concern and risk driver is the unanswered value question in the
Transcorp proposition. At the core, people simply want to know whether Transcorp is
merely an experimental idea or a sound, profitable and sustainable business making its
initial public offering at a significant time in its evolution into a wealth basket of choice.
That is the remit of this report. We hope we have been able to provide an insight into what
Transcorp means to the investor, perhaps much less to the politically astute observer.
January 2007 Page 41
© 2007 www.proshareng.com
It is our hope that the information and analysis contained herein would provide the basis for
much more informed discussion on the subject.
Suffice to say however, we believe that Transcorp will be just one model out of the many
that would be derived from the emergence of mega-corporations in Nigeria in response to
the opportunities presented by the reforms of the financial services sector and the
increasing interest of the local and foreign investment community to unfolding events in
Nigeria.
Any serious business wishing to play in the Nigerian market place must be looking at a
capital base of over N50 billion to be taken seriously in the international market…a
threshold set in motion as a consequence of our reform agenda and the common-sense
capital requirement to turn the potentials identified into viable projects.
There will be more of such companies, including the expanded scope of existing businesses
that will have to respond to the size and scope of the new ‘real’ sector market economics.
Transcorp therefore represents much more than an idea, project or initiative….it is the
clearest attempt at evolving a new market model for business operations in and with
Nigeria. There is a lot more to learn about this phenomenon and it is worthwhile to
remember that reform cannot be carried out overnight, or perhaps even in three to five years
as highlighted by Transcorp, but it can be done.
For example, South Korea and Taiwan inherited large state-owned enterprises from Japan’s
colonial rule, but they managed to dismantle or privatize many of them over the years. The
trade-off between accumulation and distribution (or employment) is always difficult, but
Kim Dae Jung of Korea has shown that the worst abuses can be mitigated by severing some
of the ties between the government and the big enterprises. The listing of the shares of the
company and this public offer provides us some comfort that a significant move has been
made from the ‘usual’ practice.
The relative success of Korea’s reform program can be attributed to the depth of the
financial crisis that occurred concurrently with a defining presidential election. Kim Dae
Jung inherited Korea’s strong government, and he has used the full panoply of executive
powers to push through serious reform. Japan’s political system is often described as “a
web with no spider,” meaning that it has a strong bureaucracy with a relatively weak
executive branch. The situation in Nigeria is precisely the opposite. The president’s powers
are strong, while the bureaucracy is relatively weak. Since President Obasanjo’s re-election
in 2003, the spider has been moving rapidly through the web.
This fundamental difference helps explain the dynamism of Transcorp’s efforts by creating
a platform that eliminates political dithering.
We consider an investment in the shares of Transcorp a good investment but for short term
and long term players for the reasons advanced here. While capital appreciation presents a
pull for the short term investor, a successful execution of the plans and business articulated
here should provide considerable returns for an investor, in the long run.0
Re: Transcorp Not Worth The Hype by DrDre1(m): 1:28am On Feb 14, 2007
Hi everyone.

The replies on this thread are really impressing. It shows how analytical Nigerians can be in terms of business.

On the issue of buying Transcorp shares, I would advise anyone to buy shares in that company. Truth is, it has some political aspect which would be smart of anyone to take into consideration before buying it. I also want to believe that a good analysis of the areas of business of the corporation would help one take a stand.

Have a look at the major businesses of the company - Hotel, Telecommunications, Agric and Oil. These four areas are money spinners in most cases.

On the hotel business, I would like to draw your attention to the fact almost all (if not all) big events that have to do with hotels organised by the government which would have been held in some other hotels have now been moved to Hilton as frequent as possible. Also, the private sector (in terms of private organisations and "big" individuals) will hold more events in that hotel because the truth is that no organisation does not want to be in the good books of the government.

On telecommunications, NITEL is still a big player. Look at the company as a "sleeping giant". Even at this time that we may consider it to be sleeping, the truth is that the company is making millions everyday. I happen to be very close to most of the senior managers (serving and retired) of the organisation and I'm shocked sometimes at the amount of millions I hear they make in their territories in Lagos alone. That was even when he staff were being owed their salaries for several months so you can imagine when they are well motivated. NITEL at a time in the past had aircrafts during the days of military rule but everything went down because of mismanagement. Another angle is that in the whole of Nigeria, no telecomms company can beat it (for now) in terms of infrastructure/equipment. you can try and imagine how much money/time GSM operators have invested to cover Nigeria to this level but you will surprised that you can find telephone line in some of the most remote parts of the country. Their cable network coverage is the largest and don't forget their earth stations (or whatever they call them). At least I know of the one in their Victoria Island exchange. Most of all these PTOs (I won't want to start mentioning names) are owed/runned by retired managers from NITEL and they all are linked one way or the other to NITEL and (I'm of the opinion that) to that extent the monopoly of the company cannot be completely broken. Remember what happened when NITEL staff decided to switch off some of their equipments in some parts of the country during the struggle for their salaries. Most calls (especially inter-network calls) couldn't go through! I believe that is why the Federal Government has quickly responded to most of the demands of the staff. If not, they would have countinued to hold press conferences and protests all over the nation. Remember the Nigerian Airways and Nigeria Railways struggle.

On agriculture, I believe Nigeria is becoming a major force to be reckoned in Africa (and in the whole world if I may add). Think Nigeria is now the largest exporter of cassava in the world (not sure though). The company at the look of things might turn out to be the biggest investor in that area in the country and continent. It's investments might even beat that of a whole country in some parts of Africa at a time when food shortage are becoming more rampant. You can only imagine what will be the return.

The last but not the least is the oil part. Everyone knows that there is money in oil business from whatever angle you look at it from. Even if this area of the company is not in full operation, you know that oil blocks don't just dry up abi? I believe the problem in the Niger-Delta will have an end someday.

In all, have you ever wondered why almost all the big people and people that matter in Nigeria rally round during the company's events. Skeptics ahould also note that a corporation tied to banks like Zenith, First Bank, e.t.c. and other big private sector players is not to be walked away from without a deep thought. The bottom line is that if you have loose money as (Delords pointed out), you should buy it before it closes (whao, it is even today!!!). It is like buying into four sectors of the economy with the price of one/two and they can complement each other. That's another advantage you won't find with most stocks.

On a last note, politically speaking, when you buy into that company, keep praying some people never get to the position of the president of this nation or else.
Re: Transcorp Not Worth The Hype by frankiriri(m): 1:35am On Mar 06, 2007
In believe that Transorp is over hyped . I like the idea of Transcorp but what I dont like is when people talk as if missing out on Transcorp will mean missing on on gains in the capital market. There are other companies with good fundamentals which will also be gaining in prices. So that I choose to adopt a wait and see approach on Transcorp does not mean I will lose money.

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