Am I dreaming?

The last 24 hours have been crazy to say the least and the worst may still not have occurred. These actions have affected not only the U.S., U.K and the rest of developed countries and markets but you got it ladies & gentleman the entire globe. This day will go down in history as a day to remember.

Not so long ago I remember news footage of people cueing outside of their banks hurrying to withdraw their savings before their institution failed (a.k.a. Northern Rock.)

In the last few hours before I lay my head on my pillow, even stranger images of BBC news footage flash before my eyes. I imagine these scenarios playing out before me as if I could not hear, read lips and all I can do is see. This is what passes before my eyes…

I see businessmen and businesswomen in large cities flowing out of their office blocks with their belongings in hand looking as if they are vacating the premises. The cities look like places that I’ve visited before namely New York City and London. I see a look of helplessness on the faces of people giving interviews and a sense of despair. Now the picture changes to other news footage across the globe. I see two men in suits that seem to be important figures probably of African countries smiling and shaking hands with one another in what seems to be some agreement of sorts. Is this really happening?

The last 24 hours have witnessed one of the worst performing days of the NYSE in the last 7 years, Lehman Bros an institution with over 150 years old filing bankruptcy, Merrill Lynch being sold and the world’s biggest insurer being thrown an $11 billion dollar lifeline. Oh yeah before I forget to mention it also witnesses Robert Mugabe and Morgan Tsvangirai shaking hands signalling a peace sharing agreement. I wonder to myself what is going on, and then Robert Mugabe makes things normal again and makes it a point of slamming and slandering the West. Some things never change.

Tourism Key in Driving Development

Travelling to foreign countries at a young age I contracted the travel bug quite early. Looking back at all those fond memories and continuing to travel as an adult I’ve been able to recognize the importance that tourism can play in creating economic opportunities not only in developed countries of the western world, but also in developing countries.

I believe that there is an untapped opportunity yet to be exploited in Africa all over the continent. As travellers continue to look for the next emerging hotspot just like investors do, it seems the majority are getting closer and closer to Africa.

I have non-African friends who have recently visited Tanzania (I haven’t even been there yet) Kenya, Namibia, Cape Verde, South Africa, Morocco and the list continues to grow. It seems the negative connotations associated with Africa are beginning to wane and to be honest there is so much diversity to be seen on the continent that you cannot find elsewhere.

I recently made a trip to Thailand and from the moment that you arrive at the airport to the moment that you leave, you understand the importance of tourism to the country and the countries GDP (I believe it is around 10% and growing.) Now I’m not speaking of sex tourism obviously but tourism of all sorts.

Tourism in Thailand has created thousands upon thousands of jobs for local people and communities. Hotels are built and of course you need staff to work in the hotels. Resorts are built on the beaches and you need staff to work in the resorts. Tourists who are travelling are looking for exciting things to do while on holidays, so inspiring entrepreneurs create activities for them to partake in from rafting, trekking through mountains and elephant riding. Tourists need to eat and drink while on holiday so restaurants and drinking establishments are created and the cycle continues. All the while let’s remember that these establishments are not just created for the tourists but locals can appreciate them as well. You begin to see development of all sorts as infrastructure needs to be created and maintained (airports, roads, bridges etc.) Tourists come to your country, have an absolutely amazing time, go home and tell all their friends about it in a blog, and next thing you have more people visiting.

I can personally speak from experience by saying that Uganda, called the “Pearl of Africa” by Winston Churchill on his arrival due to vegetation and animal species, that it is one of most beautiful countries on this Earth. Of course I am a bit biased but speak to anyone who has been there and I am sure that they will say that same thing.

Uganda has a perfect climate with the equator passing directly through it, many different habitats from deserts, savannahs and mountains, over 1,000 species of birds, and is 1 of 2 places in the world where you can see mountain gorillas in its natural environment. Oh did I forget to mention that the river Nile starts in Uganda and flows backwards to Egypt! The list could literally go on and on however that is for you to investigate further. Even though groups have begun to create hotels and better infrastructure in regards to tourism the sector is far from saturated.

This is part 1 of what will be a series of posts based on the tourism sector and how it affects development. Please feel free to leave any comments or thoughts.

Chasing Stock Splits

Sorry to keep boring some of you by blogging about stocks and equities of companies, however I do believe that this asset class has the potential of improving the fortunes of many individuals in developing countries who invest prudently in established companies (think of individuals who made riches and drastically improved their financial situations by being first movers in the Chinese and Indian equities market.)

Back in the days of my Grandfather and great Grandfather Banks were little known phenomena. Even today with banks/financial institutions rushing to developing countries with speed, the culture of saving and depositing money into these institutions to build wealth has yet to really gather pace. Uganda has one of the lowest deposit rates for banks in East Africa and Sub-Saharan Africa alike. In the days of old people accumulated wealth by obtaining and holding onto vast swathes of land or prime plots of land, and this trend has carried on even till this day. One thing people know or should know however is that Real Estate is not something that you can sell and trade with the snap of a finger and takes time to be converted to money.
The Ugandan Stock Exchange recently celebrated its 10th anniversary and people are becoming savvier to the money which can be made through stocks. Remember the Safaricom IPO of a few months back? It was one of the most highly anticipated IPO’s to date and even though it was quite disappointing (I didn’t participate) it showed peoples newfound interest and appetite for risk in investing in stocks.

Recently Uganda Clays Limited conducted its 2nd stock split in the last couple of years to increase liquidity of its shares. In the end the company decided that a split of 100:1 would take effect. My measly 150 shares have grown now to 15,000 shares and even though they have been revalued at 170 Ugandan shillings per share the 60 shilling increase since the beginning of the week have netted me roughly 300.00 GBP in two days time. Not bad work shall I say for not even being in the country, watching via internet and being produced from a developing country (I love this game!)

Now seeing how easy it was to make a few dollars/pounds the last time and also realizing it would be nice to diversify a bit I’ve been looking for the next stock to invest in which is talking of splitting stocks. I earmarked Bank of Baroda Uganda a few weeks back. Bank of Baroda is actually an Indian bank who came to Uganda years ago and was the first financial institution to list on the exchange. Just like Uganda Clays Bank of Baroda has been dogged by the fact of liquidity and shares are quite hard to find as people are reluctant to let them go (especially now since a stock split is set for next week.)

I have been received a small lot of shares (nothing drastic) and am hoping on securing my 2nd round before the split occurs which is set to be 10:1. One of the frustrating factors is that the exchange only trades stocks on Monday, Tuesday and Thursday and to make matters worse trading on happens a few hours a day. Trades occur on a first come first serve basis and whichever broker gets in the cue first, is the first broker allowed to purchase. This can become quite a headache.

Tomorrow’s an important day and I hope that I can receive my allotment before the split occurs next week. I’ll keep everyone updated as to how it goes. I’m sure that I’ll find some time during the day to make the call to my broker via my 5 pound calling card to see what the situation is..