It’s dream come true as Precision Air lists on DSE


Geza Ulole

Geza Ulole

JF-Expert Member
Joined
Oct 31, 2009
Messages
17,035
Likes
9,550
Points
280
Geza Ulole

Geza Ulole

JF-Expert Member
Joined Oct 31, 2009
17,035 9,550 280
[h=1]It’s dream come true as Precision Air lists on DSE[/h]
Michael Ngaleku Shirima, founder of Precision Air. Picture: Leonard Magomba

Michael Ngaleku Shirima will become one of the few Tanzanian stockmarket’s dollar millionaires with the listing of Precision Air at the Dar es Salaam Stock Exchange in October.
For an entrepreneur who started off as a coffee exporter, taking his airline public is a dream come true.
Mr Shirima has earned a handsome return for his perseverance and knack for being at the right place and at the right time in the airline industry.
He represents a new breed of savvy Tanzanian businessmen such as Ali Mafuruki, who are making wealth by cultivating profitable partnerships with African multinationals at a time many foreign firms struggle to operate in a harsh investment climate.
This class of investors is succeeding because they both understand how to navigate the corridors of political power and thus stay out of trouble, as well as the importance of recruiting professional managers to run their businesses.
The Tanzanian business climate is filled by a network of politicians-cum-businessmen who fill the top echelon of the monolithic ruling Chama cha Mapinduzi, the independence political party.
The union between Kenya Airways, one of the largest pan-African carriers, and Precision Air, once a small regional player in the Tanzania airline industry, seems to have been a perfect match.
Starting October 7, Mr Shirima’s firm, Precision Air, will sell its shares on the Dar es Salaam Stock Exchange, turning him into an overnight dollar millionaire. The firm is selling 31.2 per cent of its shares — 58.8 million of them — in a bid to raise $17 million to fund expansion. Each share will go for US cents 29, with the offer closing on October 28. This will leave Kenya Airways holding a 34.2 per cent stake in the company and Mr Shirima owning 34.6 per cent, valued at $18.9 million.
This means that his personal worth has grown nine times in the seven years. He sold a 49 per cent stake to Kenya Airways for $2 million in 2003. Precision Air was valued at $4.1 million in 2003 but now the airline is worth $55 million.
Wide experience
Air Tanzania Corporation, the country’s national airline after East African Airways (EAA) that was wound up in 1977, was where Mr Shirima cut his teeth in the aviation industry.
“I learned work ethics at EAA in the Operations Department and gained a wide experience inthe industry,” Mr Shirima said.
He specialised in aircraft performance but had done a pilot’s course. After working for 11 years at EAA, he moved to ATC in 1977.
However, two years later, Mr Shirima left to set up Precision Air, which at first focused on aerial spraying. Later, the company ventured into air charter operations.
Mr Shirima’s moment in the sun would come in 2002 when ATC was looking for a partner. “KQ and I made a bid for a stake in Air Tanzania Corporation in 2002 when it was up for privatisation. Seeing it was obvious that South African Airways would be the choice for ATC, KQ surprisingly approached me, but acceptance was not immediate, because I was not prepared,” Mr Shirima narrates.
He consulted with some of his senior staff and after an exchange of ideas over a few days became convinced that the partnership was worth it, “because we needed each other for value addition. Without much ado we came to an agreement.”
South Africa Airways had successfully bidded for a stake in the ATC, locking out Kenya Airways, which wanted to expand into Tanzania, but did not want to set up shop from scratch. But things did not go according to plan for ATC after bringing SAA on board. There were serious concerns that the business agreement (signed in 2002) between SAA and ATC was exploitative because the latter was entirely dependent on the former for key functions and services including aircraft maintenance, revenue and general accounting, reservations services, fuel management, training and human resources functions. — all obtained at exorbitant charges.
The agreement was also lopsided in the sense that the top management of the national airline was basically from SAA, with the local staff either sidelined or ignored in key decisions on the day-to-day management of the airline.
Meanwhile, the Tanzania government proved consistently reluctant to contribute its share of the capital. While Tanzania had a 51 per cent shareholding in ATC, “in terms of actual funding of the airline, it somehow expected SAA to provide all the funding,” says one of the former board directors. This became increasingly untenable and eventually SAA decided to let go in 2006.
Precision Air and KQ were able to make the most of ATC’s woes by boosting the capacity of their aircraft and expanding to destinations across Tanzania.
The experience KQ had gained through its partnership with KLM since 1996 helped it finance the upgrading of Precision’s fleet and recruit a management team to run the airline.
Mr Shirima stayed on as chairman. With lack of capital and management expertise no longer holding the regional carrier back, it was now on a roll, expanding in both the local and regional market. Soon, it had established itself as Tanzania’s dominant locally-owned airline, even as SAA failed to turn the national carrier around.
Precision’s current growth plans, involving expansion into more foreign markets, should see it taking on the role of a de facto national carrier. Selling shares to the public, analysts say, will strengthen this perception by creating an emotional bond with Tanzanians.
The history of African airlines puts Precision’s success into perspective. Most larger airlines — Kenya Airways, Ethiopian Airlines — have relied on their governments as anchor shareholders for support.

The East African:  - News |It
 
Gold Addict

Gold Addict

Senior Member
Joined
Sep 5, 2011
Messages
151
Likes
0
Points
0
Gold Addict

Gold Addict

Senior Member
Joined Sep 5, 2011
151 0 0
financial statements zao tunazipata vipi,ili tuweze kuwekeza huko na sisi,coz as far as i know kabla ya kuishu shares inabidi uonyeshe financial position yako...
 
pmwasyoke

pmwasyoke

JF-Expert Member
Joined
May 27, 2010
Messages
3,703
Likes
366
Points
180
pmwasyoke

pmwasyoke

JF-Expert Member
Joined May 27, 2010
3,703 366 180
financial statements zao tunazipata vipi,ili tuweze kuwekeza huko na sisi,coz as far as i know kabla ya kuishu shares inabidi uonyeshe financial position yako...
Naamini kama kawaida ya IPOs mawakala wote wa soko la hisa (Mfano Orbit Securities, Twiga House, 3rd Floor) watakuwa na offer documents - ambazo zinakuwa na financial details.
 
PakaJimmy

PakaJimmy

JF-Expert Member
Joined
Apr 29, 2009
Messages
16,231
Likes
351
Points
180
PakaJimmy

PakaJimmy

JF-Expert Member
Joined Apr 29, 2009
16,231 351 180
Naamini kama kawaida ya IPOs mawakala wote wa soko la hisa (Mfano Orbit Securities, Twiga House, 3rd Floor) watakuwa na offer documents - ambazo zinakuwa na financial details.
Good move!
Sijui ni kwanini, lakini naona kama ni kurisk sana kuwekeza kwenye hisa za mashirika ya ndege, na zaidi sana PW!
 
pmwasyoke

pmwasyoke

JF-Expert Member
Joined
May 27, 2010
Messages
3,703
Likes
366
Points
180
pmwasyoke

pmwasyoke

JF-Expert Member
Joined May 27, 2010
3,703 366 180
Good move!
Sijui ni kwanini, lakini naona kama ni kurisk sana kuwekeza kwenye hisa za mashirika ya ndege, na zaidi sana PW!
Mimi pia sina imani sana na airlines. Ningekuwa na senti za kuwekeza kwa hakika ningechagua blue chips za sasa.
 
Chapakazi

Chapakazi

JF-Expert Member
Joined
Apr 19, 2009
Messages
2,880
Likes
15
Points
135
Chapakazi

Chapakazi

JF-Expert Member
Joined Apr 19, 2009
2,880 15 135
Mimi pia sina imani sana na airlines. Ningekuwa na senti za kuwekeza kwa hakika ningechagua blue chips za sasa.
hizo blue chipis ni zipi?
 
Roulette

Roulette

JF-Expert Member
Joined
Dec 15, 2010
Messages
5,614
Likes
32
Points
0
Roulette

Roulette

JF-Expert Member
Joined Dec 15, 2010
5,614 32 0
wekeni kwenye gold, hamuoni vile zina paa? almost 100% up in the last 3 years
 
Chapakazi

Chapakazi

JF-Expert Member
Joined
Apr 19, 2009
Messages
2,880
Likes
15
Points
135
Chapakazi

Chapakazi

JF-Expert Member
Joined Apr 19, 2009
2,880 15 135
wekeni kwenye gold, hamuoni vile zina paa? almost 100% up in the last 3 years
Unataka watu waweke huku ikiwa imeshapanda? Ungeweka in 2005 u-hold to now...sawa! Lakini ukiweka sasa, there is no evidence kuwa itapanda juu zaidi.
 
The Boss

The Boss

JF-Expert Member
Joined
Aug 18, 2009
Messages
37,831
Likes
23,171
Points
280
The Boss

The Boss

JF-Expert Member
Joined Aug 18, 2009
37,831 23,171 280
hivi ile sheria ya miaka mitano ndo kampuni ije na IPO bado ipo?????

sheria mbovu saana.....
 
Chapakazi

Chapakazi

JF-Expert Member
Joined
Apr 19, 2009
Messages
2,880
Likes
15
Points
135
Chapakazi

Chapakazi

JF-Expert Member
Joined Apr 19, 2009
2,880 15 135
...He represents a new breed of savvy Tanzanian businessmen such as Ali Mafuruki, who are making wealth by cultivating profitable partnerships with African multinationals at a time many foreign firms struggle to operate in a harsh investment climate.
This class of investors is succeeding because they both understand how to navigate the corridors of political power and thus stay out of trouble, as well as the importance of recruiting professional managers to run their businesses.
The Tanzanian business climate is filled by a network of politicians-cum-businessmen who fill the top echelon of the monolithic ruling Chama cha Mapinduzi, the independence political party...
Hili ni dongo kwa Tanzania! kweli nchi ipo hovyo hovyo. Kila siku rais safari badala ya kujenga investment environment nzuri nchini!
 
Chapakazi

Chapakazi

JF-Expert Member
Joined
Apr 19, 2009
Messages
2,880
Likes
15
Points
135
Chapakazi

Chapakazi

JF-Expert Member
Joined Apr 19, 2009
2,880 15 135
Jamani ndugu zanguni, huyu mtu alifanikiwa sababu ali-take risk!! Navyosoma comments hapa ni kwamba watu kiasi fulani wanaogopa ogopa kwenda nunua hizo hisa! business haiko hivyo! kama wataka kwenda nunua, nenda nunua. Kama waona wewe si risk taker basi tuliza mpira na vijisenti vyoko!!ila ONYO: hela ya Tanzania inapoteza thamani kila siku, milioni moja ya leo ina thamani ndogo mwakani hivyo kama unavijisenti kawekezeni sana kuliko kunatisha pesa zenu benki tena katika TSh!!
Hizo shares wanauza in USD? Maana nimeona tangazo kwa michuzi wanauza share moja kwa Tsh 475! Je thamani ya pesa ikishuka si inakula kwangu pia as an investor? Ngojea nikupe a quote:
How Does Inflation Affect Stock Prices?
By Saj Karsan, Sunday, June 22, 2008, 6:43 AM | inflation, P/E | 8 comments »

As we discussed here, despite the fact that price increases should shield corporations from the effects of inflation, they actually end up eating up much of the profits in asset requirements. But this cash requirement of the business is hidden from investors, who continue to see rising earnings. Therefore, what happens to stock prices during inflationary times? Do they continue to rise along with earnings? The answer is no.

They key to understanding the argument below is to recognize that as inflation increases, central banks increase interest rates to reduce the money supply and slow inflation down: When interest rates are high, people find it expensive to borrow, and therefore there is less money floating around. With interest rates are high, people require higher returns on stocks. Well, its not so easy to just increase earnings for a stock, so its price has to adjust downward.

Consider a stock that sells at $10 with earnings of $1, a 10% return. When government bonds pay 5%, an investor may be willing to buy this stock for the extra 5% return. However, if interest rates were to rise, to say 15%, who would pay for this 10% return, when they could get 15% risk-free by buying the bonds? Therefore, the stock may drop to $5. With earnings of $1, this now generates a 20% return and is once again at a price where an investor might be willing to take the risk on this stock for the extra 5%.

As we can see, inflation compresses P/E values, which can be a painful adjustment for anyone holding stocks.
 
M

mteule

Member
Joined
Aug 2, 2007
Messages
33
Likes
0
Points
0
M

mteule

Member
Joined Aug 2, 2007
33 0 0
hisa unanunua kwa Tshs wakati sehemu kubwa ya operation cost ni gharama za kununulia jet fuel, ambayo inanunuliwa kwa USD, Hapa risk kubwa ninayoona ni kushuka thamini ya Tshs itaathiri moja kwa moja earnings za share yako. Sijui wadau wengine mnaliona hili?
 
pmwasyoke

pmwasyoke

JF-Expert Member
Joined
May 27, 2010
Messages
3,703
Likes
366
Points
180
pmwasyoke

pmwasyoke

JF-Expert Member
Joined May 27, 2010
3,703 366 180
hizo blue chipis ni zipi?
Blue chips ni kampuni zilizoorodheshwa soko la hisa kwa muda mrefui na zina historia ya kufanya vizuri na kutoa magawio mazuri mara kwa mara. Mifano hapa kwetu ni pamoja na Tanzania Cigarette Company, TBL, nk
 
C

Changamoto2015

JF-Expert Member
Joined
Oct 1, 2012
Messages
759
Likes
47
Points
45
C

Changamoto2015

JF-Expert Member
Joined Oct 1, 2012
759 47 45
Mlionunua hizi hisa tunaomba mtupe mrejesho! Biashara inakwendaje? Bila shaka ni mamilionea sasa depending on the size of your investment.
 

Forum statistics

Threads 1,251,851
Members 481,916
Posts 29,787,571