Law School Discussion

Nine Years of Discussion
;

Author Topic: Home Ownership and Wealth Building  (Read 116176 times)

One Step Ahead

  • LSD Obsessed
  • *****
  • Posts: 6465
  • you say you want a revolution
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1310 on: August 26, 2007, 05:28:01 PM »
Everyday Kenyans Taking Stock In a Growing African Economy

By Stephanie McCrummen
Washington Post Foreign Service
Sunday, August 26, 2007; A01



NAIROBI -- One ordinary afternoon in a bright, marble-floored lobby downtown here, the following conversation took place between two women, a government worker and a self-employed soapmaker.

"I bought KenGen at 9.90 shillings," said the government worker, Josephine Nduta, referring to her stake in the initial public offering of Kenya's power company last year. "I sold them at 28 -- I made a lot of money!"

"I also made money on that," said Mary Kariuki, the soapmaker, recalling how she used the $1,000 to pay her children's school fees. "I bought 3,300 shares."

The two women carried on about liquidity and profit margins, and recalled with pride attending the first shareholder meeting of KenGen this year, an event so huge that it had to be held in the city's largest soccer stadium. About 200,000 people from all corners of the country came like so many newly minted executives.

"I felt so good," Kariuki recalled. "It was just normal, common people. People dressed well. What impressed me was the number of old women -- they were coming in their traditional clothes. They were telling me, 'Yes, we bought!' "

Stock market fever is sweeping Kenya and other sub-Saharan African countries such as Tanzania, Uganda, Nigeria and Zambia, where stock exchanges, along with national economies, have shown steady gains in recent years as people who have traditionally invested in cows or land are learning to trust in the abstraction of corporate shares.

Perhaps nowhere has the idea caught fire more quickly than in Kenya. With investment banks conducting education campaigns in rural areas and daily newspapers thick with personal finance sections, the Nairobi Stock Exchange has transformed in recent years from a rich man's club into a computerized, mass-appeal institution.

Since 2002, the number of investors has risen from 50,000 to more than 750,000, according to stock exchange executives, with much of that growth coming from rural areas. The exchange's total value has jumped from $1 billion to $12 billion, amounts that are predicted to swell again following the biggest initial public offering in Kenyan history.

Cellphone giant Safaricom, expected to go public later this year, has attracted such foreign investment banks as Goldman Sachs to Nairobi for the first time, offering their services, and analysts expect that as many as 3 million individual investors in this country of nearly 36 million will participate.

"People are coming on a daily basis just to see what it's about," said Chris Mwebesa, 36, chief executive of the Nairobi exchange. "We're seeing more rural folks coming to the market, working professionals, retirees, farmers, young people, even students."

The boom has its skeptics, especially in a country with a history of entrenched corruption. And while people such as Nduta have made money on the whole -- she is using some of it to electrify her house -- she is also aware of the risk of losing big. Even so, the boom underscores a feature of life in Africa that often gets lost amid more prevalent images of a continent in perpetual collapse: dogged optimism.

A recent opinion poll by the Pew Global Attitudes Project found that people surveyed in 10 African nations were on the whole optimistic about the future. In Kenya, 78 percent of those surveyed said life was getting better, even though a majority also reported that there were times in the past year they did not have enough money for food.

It is the kind of paradoxical confidence found in the bustling lobby of Suntra Investment Bank on a recent afternoon, where Arnolda Nyangweso was already making her second visit of the day.

"I have something telling me to buy," she said, explaining that she had come for KCB Bank shares in the morning and decided to return for more in the afternoon.

Traipsing in and out were the soapmaker and the government employee, a taxi driver, a hairdresser, a cellphone vendor, a retired farmer and others who comprise the more prosaic, if still difficult, version of life that predominates here.

Nyangweso grew up in rural Kenya, where her parents were small farmers. She and her siblings were able to attend university in Nairobi, and Nyangweso eventually got into the real estate business. After a friend introduced her to the stock exchange, she began investing two years ago.

A large percentage of new investors are women, who tend to drive financial decisions in households, just as American women do.

"When I became a mother, I saw that you have to save," said Nyangweso, who is 28 and wore a finely tailored lavender suit. "I want my son to have a good life."

After a friend introduced her to the stock exchange, she began investing two years ago, and these days she reads newspaper stock tables every morning.

The Nairobi Stock Exchange is small potatoes compared, for instance, with Johannesburg's, which is valued at more than $500 billion and is among the world's 20 largest.

The Nairobi exchange occupies several black-and-white checkered floors of a new downtown skyscraper overlooking the rusted tin roofs of the Kenyan capital's old colonial buildings and bustling streets.

Founded in 1954, the exchange was for decades so small and exclusive that brokers traded shares over tea in the lobby of the old, wrought-iron-clad Stanley Hotel nearby. During the 1990s, the market collapsed along with the Kenyan economy, but things began to turn around after the 2002 presidential elections, during which longtime ruler Daniel arap Moi conceded power to Mwai Kibaki.

The peaceful transition encouraged investors, including many Kenyans abroad, to return to the market. Kibaki also made some key economic policy changes, such as dramatically increasing revenue collection, which decreased government borrowing and allowed for lower interest rates.

With Kenya's economy growing by about 6 percent annually, Kibaki has also provided tax incentives to companies that go public. Several companies have, including state-owned corporations such as KenGen, whose public offering last year touched off a wave of excitement across the country, with people standing in hours-long lines to buy shares.

The offering, intended to raise $8 billion Kenyan shillings, raised $26 billion and drew in three times the number of anticipated investors, many of whom immediately tripled their money.

"People pitched tents outside of our offices," said Anthony Wangari, a manager for Suntra. "Normally we'd see maybe 100 people a day. We would see about 2,000 a day during KenGen. . . . We had to move from the building where we were because the landlord was complaining that numbers were so big people were messing up the elevators."

These days, sharply dressed men and women swing through the heavy glass doors of the stock exchange building, cellphones glued to their ears. Inside, an array of people watch the returns scroll across a big screen in a theaterlike gallery -- university students, businessmen on lunch break and plenty of full-time speculators.

"I started with 30,000 shillings," about $500, said Hillary Wandera, 41. "I have over 700,000 shillings invested now. I come here almost on a daily basis."

Past a fountain and up a circular staircase, about 40 red-coated traders sit at rows of IBM terminals buying and selling via computers, which replaced the paper system two years ago.

"We're just coming out of sheer hell," said Cecilia Njoroge, head of trading for the exchange, referring to the old system in which traders would often take three days just to enter the orders that piled up. "It's like heaven and hell."

With Safaricom and other companies wanting to go public, investment banks are trying to cull customers not only in Nairobi, a city of 2.7 million, but also in rural areas. Wangari, the Suntra manager, has conducted seminars for sugar and tea farmers out in the hinterlands, where he tries to explain the benefits of investing in shares rather than land.

"I get questions like, 'What is a share?' " he said. "And, 'What is my evidence that I've bought something?' If it's a cow, you can see the cow. If it's land, you can see the land. With shares you have nothing to show. It's a big leap."

But in a country where wealth has been symbolized by land or cows -- or, in Nairobi, having one's name attached to a skyscraper -- the symbols of the upwardly mobile are changing.

More Kenyans are taking vacations abroad these days. Huge billboards around the city advertise the accoutrements of wealth -- weekend jaunts on Kenya Airways to Paris, slender cellphones, credit cards. Sleek bars and restaurants are packed on weeknights with young, well-heeled, cosmopolitan-drinking Kenyans. Glossy GQ-like magazines offer images of a glamorous life, sometimes alongside features on wise investing.

"We're becoming enlightened," said Nduta, the government worker, who said she has persuaded her husband to start putting money in stocks rather than land. "Land is just sleeping capital."

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/25/AR2007082501291_pf.html

A.

  • LSD Obsessed
  • *****
  • Posts: 15712
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1311 on: August 26, 2007, 06:13:37 PM »
Hope they don't get burned.

A.

  • LSD Obsessed
  • *****
  • Posts: 15712
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1312 on: August 28, 2007, 09:52:00 AM »
Housing Prices: Steepest Drop in 20 Years
Tuesday August 28, 9:43 am ET
By Vinnee Tong, AP Business Writer
S&P Says Housing Prices Fell by Steepest Rate Since Its Index Was Started in 1987

NEW YORK (AP) -- U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the group said Tuesday.

The decline in home prices around the nation shows no evidence of a market recovery anytime soon.

MacroMarkets LLC Chief Economist Robert Shiller said the declining residential real estate market "shows no signs of slowing down."

The index tracks the price trends among existing single-family homes across the nation compared with a year earlier .

A separate S&P/Case-Shiller index that covers 20 U.S. cities fell 3.5 percent from a year earlier. A 10-city index fell 4.1 percent from a year earlier.

http://biz.yahoo.com/ap/070828/home_price_index.html?.v=7

Statistic

  • LSD Obsessed
  • *****
  • Posts: 10080
  • I never had a chance
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1313 on: August 28, 2007, 09:55:29 AM »
so that means its a good time to buy?
Look to the left -- Look to the right

A.

  • LSD Obsessed
  • *****
  • Posts: 15712
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1314 on: August 28, 2007, 09:57:46 AM »
Better time than it used to be.  But I'll let blk make the assessment.

ETA: It'll also depend on your market.  NYC hasn't cooled down, for instance.

One Step Ahead

  • LSD Obsessed
  • *****
  • Posts: 6465
  • you say you want a revolution
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1315 on: August 28, 2007, 10:01:35 AM »
so that means its a good time to buy?

don't buy til there is blood in the streets.

Statistic

  • LSD Obsessed
  • *****
  • Posts: 10080
  • I never had a chance
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1316 on: August 28, 2007, 10:06:42 AM »
does that mean something commonly? I don't get it. I feel like Alci did yesterday.  :(
Look to the left -- Look to the right

A.

  • LSD Obsessed
  • *****
  • Posts: 15712
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1317 on: August 28, 2007, 10:14:29 AM »
:D nukka

One Step Ahead

  • LSD Obsessed
  • *****
  • Posts: 6465
  • you say you want a revolution
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1318 on: August 29, 2007, 11:27:48 AM »
Social Networkers at Risk of Identity Theft
Wednesday, 29 August 2007, 2:02 pm
Press Release: Dun and Bradstreet 
Wednesday 8th August, 2007

Social Networkers at Risk of Identity Theft

Consumers should think twice before sharing personal information online

Users of social networking sites such as MySpace and Facebook are leaving themselves open to the possibility of identity theft by giving away too much personal information, according to leading credit reporting agency Dun & Bradstreet (D&B).

Research from the latest Internet Crime Report (Internet Crime Complaint Centre) reveals that internet fraud complaints are increasing, with the total dollar loss of all referred cases in 2006 reaching $198.44 million. Research indicates that only 1 in 7 incidences of internet fraud are brought to the attention of enforcement or regulatory agencies, suggesting that the dollar value of internet fraud is likely to be significantly higher. Dun & Bradstreet believes the popularity of social networking sites and the ability they provide to connect with other likeminded individuals comes with a catch: consumers are asked to submit a significant amount of personal data. Requested information on social networking sites usually includes date of birth, location, email address, job and marital status. This information can be used by fraudsters to steal a person’s identity and obtain credit in their name.

Social networking sites such as MySpace and Facebook have seen a rapid increase in popularity in recent months. Estimates indicate that MySpace and Facebook have reached worldwide user levels of 60 million and 31 million respectively.

According to John Scott, D&B New Zealand General Manager, the increasing popularity of social networking sites could have dire consequences if users are not savvy about restricting the personal information they make available. “People would usually think twice about divulging personal information in an online environment but concerns about privacy and security seem to be forgotten when using social networking sites,” said Mr Scott.

“Consumers don’t seem to realise the significance of the information they are putting on the web or who can access it.

“We don’t want to discourage consumers from using these sites – we want to ensure that when they do, they are aware of the risks associated with their actions.” Current estimates suggest that the cost of identity theft is increasing worldwide, with indications that the cost in Australia is close to $3 billion per annum. D&B warns that it will likely escalate even further with the rapid increase in users of social networking sites.

“The costs of identity theft are alarming and the implications go far beyond the mere financial impacts,” said Mr Scott.

“Many victims suffer detrimental impacts on their reputation and may even be arrested or detained for actions that they played no part in. Also, efforts to correct the inaccuracies associated with identity theft often take many years.” D&B warns that people should think carefully about the consequences of identity theft before they enter their personal details into social networking sites.

To reduce the risk of identity fraud, D&B advises consumers to follow a few simple rules:

1. use the privacy settings that are available on social networking sites – this will prevent people other than close friends from viewing personal information

2. do not include common verification information such as date of birth or mothers maiden name

3. think carefully about password selection – birthdates and pets names are very common and easy to crack.


A.

  • LSD Obsessed
  • *****
  • Posts: 15712
    • View Profile
Re: Home Ownership and Wealth Building
« Reply #1319 on: August 29, 2007, 11:33:33 AM »
Lol I seriously doubt this happened b/c of facebook.