First, I must state that at 50 there’s not much to jubilate about, but we must jubilate and jubilate we must. I remember when I clocked 18 and also when I clocked 21, I did not only jubilate, I celebrated it, not because I had achievements to show, but because it is a tradition to celebrate such milestones.

The Idea

A lot of us carry the tag Nigerian yet aren’t proud of the entity called Nigeria, not because we are ingrates but largely due to a failure of leadership and mismanagement of the Nigerian economy. For some time now, I have nurtured the idea of dissociating myself from the geographical entity called Nigeria and rather claim to be a citizen of the World (the geographical entity where the Almighty has created me). This idea has not progressed beyond that level because of the many man-made structures and barriers standing in its part.

Now I resolve to keep that idea in the cooler till a much later time when it becomes feasible to translate it into reality.

The Substitute

The very foundation structure of the entity called Nigeria is the Constitution of the Federal Republic of Nigeria, dated 1999.

The constitution determines how the president and other leaders of the country/economy emerges so it’s in our best interest (a better Nigeria for us all) to play by the rules. When we have problems the solution, we all know is not to siddon look but rather take concrete steps towards its resolution.

To stand a chance of occupying any of these leadership roles, you have to belong to a Party, emerge as the candidate of that Party for the general elections and then be elected by the entire populace at the general elections.

There are two ways to go about making this change we desire, one is ensuring that the right people get there, and the other is to volunteer your good self for service of our father land. Whichever way you choose to go about it, you have to belong to a political party (card carrying member), and join in the change process.

I have made it a personal duty not to listen to rantings about the problems of this nation anymore,without first asking the ranter if he or she belongs to a registered political party.

God bless you, God bless us, God bless Nigeria.

It’s our Jubilee lets Jubilate.

http://www.forbes.com/lists/2009/10/billiona ires-2009-richest-people_ Femi-Otedola_ S6CU.html

The World’s Billionaires
#601 Femi Otedola

Politician’s son used a majority stake in African Petroleum to get himself appointed its chief executive last year.

Femi Otedola

Net Worth:$1.2 bil
Fortune:self made
Source:Energy
Age:42
Country Of Citizenship: Nigeria
Residence:
Industry:Energy
Education:NA,
Marital Status:married, 4 children

Politician’s son used a majority stake in African Petroleum to get himself appointed its chief executive last year. Now he plans to merge it with his private firm, Zenon, to create the continent’s largest oil company. Deal has stalled in the face of government concerns about a monopoly, with his assets temporarily frozen last year. Nigerian regulators lifted the ban in January. Conflict abounds in Otedola’s life: he claims his friend and fellow billionaire, Aliko Dangote, broke a gentleman’s agreement when he thwarted Zenon’s bid to buy Chevron‘s local subsidiary in September. In retaliation, starting buying shares in Dangote’s publicly traded sugar company.

For once, both optimists and pessimist agree on one thing: 2009 would probably be one of the most challenging times in living history for most people in Nigeria and the world.

Even those who predicted that Nigeria was too detached from the global economic crisis have all reversed
their positions. Warren Buffet (arguably the greatest investor of our time) says: The secret to making money is to be cautious when everyone is greedy and to be greedy when everyone is cautious. But a lot of questions are to be answered:

Has the Nigerian stock market reached its bottom? Should I average down by investing at these low prices? Is there a real estate bubble? Will Naira depreciate further? What else can I invest in? Will I keep my job in 2009?

Will there be a banking crisis or consolidation? How best can I survive in 2009? This is an attempt to answer all these questions and more.

Many experts on the Nigerian economy agree on the following predictions:

Foreign exchange rate will depreciate further to between N150 to N175 and maybe closer to N200 per US$1
by mid to year end 2009; Nigeria’s foreign reserves may have halved by 2009 ending, from about US$52billion in December 2008 ($63bn in September 08); Prime lending rates would range between 20% and 25% depending on CBN’s willingness to print money and the mode of financing our N1 trillion deficit budget;
Crude Oil prices would range between $25 to $55 per barrel depending on weather conditions and events in the Middle East; Real Estate prices would adjust downwards by between 10% to 50% (especially in Ikoyi, Lekki and Victoria Island); Nigeria ‘s cocoa exports would drop significantly;

There would be huge swings in share prices (upwards and downward) with an average slow trend upwards;
Unemployment would rise (especially amongst bankers); Consumer confidence would drop and crime rate  would rise; and the Foreign exchange ‘black’ market would re-emerge and trade at a premium of between 5% to 10% above the official exchange rate.

Generally, all you need in 2009 are the 3 C’s: CASH, COURAGE and CALM.

CASH to survive and take advantage of all the golden opportunities which will arise.

COURAGE to aggressively implement all the highlighted recommendations/ Tips; and

CALM to remain steadfast.

What do you think? fill in your comments below.

Brief Introduction

Starcomms plc was incorporated on the 19^th July, 1995. It is the 4^th largest Nigerian Telecom operator that provides fixed line, mobile and internet/data services over wireless CDMA network. In February 2007, Starcomms Plc launches its nationwide mobile services. Starcomms subscribers has grown to 1.92 million with 1.55 million active subscribers, having full operation in 11 major cities,and going with the plan of making 20 more coverage to sum up to 31 cities by the end of 2008.

The company is also the leading provider of 3G and 3.5G broadband services in Nigeria using CDMA 2000 Ev-Do and the first company in Africa to launch Ev-Do high speed (600-800 kbps) broadband services in June 2006. The company was listed on the Nigerian Stock Exchange on the 14^th July 2008.

Starcomms over the years has position itself to exploit the significant growth expected in the Nigerian Telecommunications market.

Management Team:

The paddle of progress has been sustained over the years by well deserved executives with high level of professionalism, skills and experiences to the achievement of goals and objectives of the company. The board list includes:

1. Chief Maan Lababidi, OON (Chairman)

2. Maher Qubain (CEO)

3. Omar Lababidi

4. Navaid Burney

5. Folabi Williams

6. Paul Edwards

7. John Owers

8. Micheal Rosse

9. Oluwaseyi Owodunni (CFO)

10. Dr. Sam Nwosu (Sales Director)

11. Manoj Vashisht (Marketing Director)

12. Krishnan Madabushi (CTO)

FINANCIAL ANALYSIS

Price Movement: Performance of the shares price of Starcomms Plc on the secondary market has been on the downward trend as analyzed from the period of its listing to the current Market price. For instance, available statistics show that the Company’s share price movement, which stood at N14.33 as at 14 July, 2008, dropped to close the third quarter 26 September, 2008 at N8.04. With the current bearish trend established in the market, the share price dropped sharply to N4.05 as at December 31, 2008.

Turnover: There have been consistent and progressive increases in the turnover over a five (5) year period ending 31 December. Turnover for the year ended 31 Dec., 2003 shows a figure of N3.14 billion, N5.17 billion in 2004, N6.34billion, N13.61 billion, and N20.51 billion, for 2005, 2006, and 2007 respectively. The result for the third quarter ended 30 September 2008 showed an increase of N12.40 billion to stand at N27.13 billion as compared with the N14.73 billion third quarter result for 2007. This shows that the market for the company is expanding, and  huge growth potential.

Technical Analysis/Conclusion

Listing price of 14.33 on 14/7/2008 rose to an all-time high of 14.90 the following day, and ever since has been on the decline till date closing at 3.01 on 9/1/2009. With a total of 6,878,478,096 shares in issue, this translates to a market capitalization of 20.7 billion naira as against a market capitalization of 98.5 billion at listing, a depreciation of 79% in market valuation of the company. The entire market capitalization on the other hand depreciated by about 43% over the same period.

Since the fortune of the market is not looking bright it may be concluded that the share price of Starcomms Plc would continue to fall at a faster rate than the market.

This conclusion is further corroborated by the fact that at the Price/Earnings ratio of the company is ? with an expected dividend of 76kobo per share in Year 2010, when the earnings of the company is expected to be in the positive region based on the company’s forecast. A cursory look at the company’s forecast however, indicates that the company’s performance is below expectation, and that the forecasts may not be met. The expected loss before tax for the year ended December 2008 is put at 454 million naira, but the third quarter (September 2008) results released to market put the company’s loss before tax at over 3 billion naira.

With the final results of the company being expected in a few weeks, and considering the current market meltdown and investor apathy, it is advisable to dispose holdings in Starcomms Plc now before the results come to the market, as the market reaction to these results is expected to further dampen the company’s share price.

While some observed that this action, which the CBN said was a “deliberate and strategic” move aimed at saving the economy from an impending financial crisis, would not be effective at this point in time, others said that the adjustment could not have come at a better time.

A retired professor of economics, Kayode Familoni, who spoke with our correspondent in a telephone interview on Monday, said although the devaluation had its benefits in the face of the current global crisis, it might not be effective as a deliberate policy weapon for Nigeria at present.

Familoni, formerly of the Department of Economics, University of Lagos, said before naira devaluation could be effective as a deliberate policy weapon, the country’s non-oil products much contribute more to the Gross Domestic Product.

“Before that policy can work, the non-oil sector must be significant, which at present, is not the case in Nigeria. The price regime in the oil sector is exogenously determined, it is not controlled by the country,” he explained.

“When we devalue, our domestic products become more attractive to foreigners, but right now, the non-oil sector is relatively weak,” he added.

But the Chief Executive Officer, Financial Derivates, Mr. Bismarck Rewane, said the devaluation is a necessity at this time because of the continuous fall of oil prices.

Speaking in a telephone interview with our correspondent, Rewane noted that the country currently had a financing gap, which necessitated a prompt adjustment.

Governor of the CBN, Prof. Charles Soludo had told the Senate, while explaining the continued depreciation of the naira against the United States dollar, and other foreign currencies, that the process of devaluing the naira was “carefully thought through and deliberately implemented” to maintain an internal and external balance for the economy.

He said the crash of crude prices in the international market due to the global financial crisis had adversely affected foreign earnings and inflows into the Nigerian economy.

While explaining that this had implications for the nation’s balance of payments, Soludo said, “Every country that experiences this has two options –you either allow the prices to adjust by way of exchange rate or quantities would adjust”.

On the effect of the falling value of the naira on inflation rate, Familoni said if the value of the naira fell vis-à-vis other foreign currencies, then foreign goods and services would be relatively more expensive than domestic goods and services.

He noted that this meant that the country would be importing at higher prices, adding that “given the home price regime, the imported price regime is higher. And some of these imported goods serve as intermediate or finished goods”.

This, he said, automatically increased the prices of goods and services in Nigeria, which meant there would be higher inflation.

However, while agreeing that such effects could follow the lower value of the naira, Rewane said, “You cannot make omelette without breaking eggs”.

“There is no perfect world. Some things must give. If there is inflation, it can be managed,” he argued.

The naira, which recorded some stability in the last three years, has crashed continuously from N117 to about N138 to the dollar in the past five weeks.

The development prompted the closure of the foreign exchange market for two consecutive days shortly before the Muslim Eid el Kabir festival.