Monday, 31 January 2011

Blue Finance - Le coq sportief a l'Afrique e tout le monde

Peace of Mind!!!!  mmmmm

Blue Financial Services Limited (Blue) is a true-blue, South African -based company. The claim is that they are a company who are a financial services supplier, providing ethical and credit solutions to people within Africa. A very strong worded statement; easier to say than do.

They operate in Botswana, Cameroon, Kenya, Lesotho, South Africa, Switzerland, Tanzania, Uganda and Zambia.  Not bad for a hard working bunch of okes!!!

During the fiscal year ended February 28, 2010, it had suspended operations in Cameroon and Rwanda, reasons as yet unknown. Their product offering include personal loans, short term loans, education loans, home loans, home improvement loans, debt consolidation and handset finance. Blue offers bonded home loans through Blue Home Loans, a division of Blue Financial Services Limited. Blue is listed on two stock exchanges: The JSE Limited (share code BFS) and the Botswana Stock Exchange (share code Blue).

Mayibuye Group (Pty) Ltd, a South African investment company, entered into an agreement with Blue Finance to provide ZAR 450 million (USD 58.6 million) in equity and debt financing. As a result of this recapitalization Mayibuye now owns 65 percent of Blue.

Mayi "blue" ooops Mayibuye’s turnaround strategy also aims to reduce costs and credit risks and improve corporate governance and risk management. Mayibuye appointed a new CEO Johan Meiring replacing Dave van Niekerk.  I think this is what investors are looking for.

They hope that loss-making Blue Financial Services will be profitable by February 2012 Under Meiring's guidance.

Though we have not heard much about the causes of the financials crisis one cannot help but speculate that it was caused by its lending policies and of course the credit crunch, also crunched them. They lost their operating license in Rwanda under allegation of fraud by the Reserve of Rwanda. The question is did this also contribute?

Continuing with its bid to recover from its financial crisis which they saw themselves in last year, Blue Finance has granted Existing Lenders the option to convert the whole or a portion, up to a total aggregate amount of R325 million, of the amounts owing to them into Blue ordinary shares ("Ordinary Shares"), at a conversion price of R0.13 per Ordinary Share ("Early Conversion").

International Finance Corporation confirmed converting the entire principal amount owing to it of circa R60.5 million. Furthermore, Renaissance Africa Master Fund Limited ("RenAsset"), being one of the Company`s existing lenders also confirmed that it will be converting the entire principal amount owing to it of circa. R44.4 million (under the Early Conversion).

ABSA Bank Limited has advised the Company that it will also be converting the entire principal amount owed to it by Blue, of circa. R37.4 million (under the Early Conversion). This is in addition to the confirmation received from the Nederlandse Financierings Maatschappji voor Ontwikelingslanden N.V. (Dutch Development Bank), advising Blue that it will be converting a portion of the principal amount owing to it of circa. R80 million (under the Early Conversion).

With this in mind I think we can all agree with the CEO of Blue Finance Mr. Meiring that the turnaround for Blue Finance is on course.

Thanks Lindy, a nice bit of insight.....True Blue !!!

Friday, 28 January 2011

Google flushes its Property Portal down the loo mmmmmm

Google flushes its property portal down the loo.

After much media fanfare, Google appears to have abandoned its ambitions in the property portal space less than two years after first experimenting with the idea.

The search giant announced last night that it will remove property listings from Google Maps where this option is currently available in the US, Australia, New Zealand, the UK and Japan.

As part of the change, Google is phasing out the facility for agents and developers to upload properties directly to its classified site, Google Base which is being replaced by a new service named Google Shopping.

Unprofitable business model

In its official statement Google cites low usage, fierce competition and high infrastructure costs as the main reasons for its change of heart:

“In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API (used by listing providers to submit listings), we’ve decided to discontinue the real estate service”

Shortly after launch, we outlined the hurdles Google had to overcome to succeed in its real estate venture. What has become clear is that it failed to find answers to two key questions:

How do you increase Adwords revenue at the same time as promoting your own portal?

It could not square the circle of sending searchers to a site (Google maps) where the adverts are less prominent and therefore users are less profitable than in the main search results.

• How do you build a cost-effective infrastructure that presents clean, up-to-date listings in a compelling way for the property searcher?

Google cites low usage as a key reason for its exit but the main reason for failure is it never prominently promoted its listings within the main search results.

It tested this but failed to find a way to make the economics stake up so its real estate results always remained relatively hidden.

Google also arguably underestimated the time, skill and resources it requires to run a modern-day, cutting-edge property portal. If the revenues had been there, it could have bought in the expertise but the numbers just did not stack up.

Limitations of map-based search

One factor which many, including Global edge, failed to anticipate is the limitations of map-based search. A number of prominent portal owners have recently cited tests that show most consumers prefer a list of properties to quickly compare images and property features to searching on a map.

Ultimately, Google could not provide a consumer experience comparable with the best portals, in the markets in which it operated, at a cost that made the excercise worth while.

Portal owners around the world will be smiling today. It's not as good news though for agents, as Google's departure will only discourage further new entrants and raise the price of lead generation over the longer term.


So are you cutting your selling price too!

With the average time properties being on the FOR SALE market being 15 WEEKS and 6 DAYS it is no surprise 80% of sellers are being forced to reduce their asking price.

As a seller get real guys...or wait it out if you can.

Back to basics is the name of the game with YOUR HOME being the highest demand in the buying/selling market and anything else that is non-essential is put on hold for now.

So agents love the low interest rates but hate the fact that the banks are tight with their lending criteria, the mortgage brokers are sweating blood and from what we hear it takes on average 4 attempts per bank to get a positive answer - no wonder they are barely surviving this market, its tough out there.

Reasons for selling are a real mixed bag but from surveys taken:

17% are downscaling due to financial pressure

18% downscaling because they are getting older

10% are emigrating

8% relocating within South Africa - probably all going to Cape Town.

15% because of change in family structure

9% want to be closer to work or schools

So its still a buyers market for sure.

Wednesday, 19 January 2011


Standard bank scraps fixed rates but the rest of the banks hang in there!!!
Standard Bank (JSE:SBK), Africa's largest bank by assets, looks like the only big-four bank that is currently not offering a fixed interest rate for a mortgage in the present market conditions as it not a viable business option for it, leaving its customers left out as rivals continue to offer their customers the opportunity to fix.

so says Moneyweb who contacted all the big-four banks to find out if customers were able to fix the interest for their mortgages in the current market conditions. Put to Standard Bank that it currently did not offer fixed interest for mortgages and asked why that was the case, Africa's largest bank by assets said:

"Home loans borrows funds in tranches from treasury at a specified rate for a specified period. The funds are then lent to customers who enter into a fixed agreement at a specified rate for a specified risk. Tranches are currently unavailable due to the current market conditions as we purchase funds based on current conditions and interest rate expectations as well as demand."

Standard Bank went on further to say that given that the current economic conditions were not ideal in the customer's opinion to fix their rate, it did not make business sense to acquire a tranche from Treasury at a high rate if the bank would not be able to sell fixed rates to customers.

"We would then not be able to service the agreement with Treasury, which would inevitably result in increased future pricing of our fixed rate tranches. Evidently, this is not viable for business going forward. We would however purchase a tranche as demand or market conditions improve," Standard Bank spokesman Ross Linstrom said.

However, Standard Bank noted it had not discontinued fixed rates "as a product", but just did not have tranches available. A Moneyweb reader, who banks with Standard Bank and wanted to fix his rate, expressed frustration why this hasn't been communicated to clients.

FNB, Absa (JSE:ASA) and Nedbank (JSE:NED) told Moneyweb that they continued to fix, but concede demand is low in the current market conditions.

FNB's Head of Pricing, Profitability & capital Management, Praven Subbramoney, said FNB offered the fixed rate option on all registered home loan accounts and had fixed rate options of up to five years.

"The fixed rate option is great for customers that want to maintain certainty of cash flow and reduce the impact of future interest rate hikes. This has a positive impact for the bank since it assists in reducing default risk due to interest rate increases," Subbramoney said, adding the take up trend for fixed rates was influenced by interest rate cycles as well as market sentiment around the future of interest rates in the country.

Currently repo is sitting at a three decade low of 550 basis points, while prime for all the big-four banks (Standard Bank, Nedbank, First National Bank and Absa) is at 9%. The Reserve Bank is currently debating the direction of the Repo rate and is due to come with a decision this week.

"Customers generally react to the news of possible Prime rate hikes with most of our customers only requesting for the fixed rate option once the prime rate begins to increase. From a fixed rate pricing perspective, this is not always the best time to fix your interest rate since the market would have priced in the interest rate adjustment, as well as any anticipated interest rate movements," said Subbramoney.

"We have been in an environment of decreasing prime lending rates, hence the demand for the fixed rate option has been low. We anticipate a higher demand for the fixed rate option once the prime rate starts to show signs of increasing.

Rival Nedbank said its clients may opt to fix their rates for periods of 12, 24 or 60 months, but said the demand was low currently, despite the period being the most beneficial time to fix a home loan rate at the bottom of a rate cycle.

Asked what had been the motivation for Nedbank to offer the option in the current market conditions, Nedbank said:

"The main benefits to customers are twofold: Clients should have financial certainty for a period of time allowing for more accurate future financial planning. Secondly fixed rates protects against unexpected additional monthly expenses. This is particularly beneficial to clients finding themselves under cash-flow constraints," Pat Lamont, general manager of Nedbank Home Loans said.

"Clients need to take cognisance of the fact that fixed rate contracts carry financial penalties should one opt to cancel the contract. Dependent on the term, and the value of the bond amount, this may constitute a substantial amount. Hence, we would suggest that clients consider their options carefully and consult widely prior to entering into long term fixed rate contracts."

Managing Executive for Absa Home Loans Luthando Vutula said the bank offers fixed interest rates on mortgages for a term of one or two years with an option to renew it when the term lapses. It said in the past, it offered fixed interest rates to customers for longer periods, but due to market uncertainty and more frequent changes in interest rates, it decided to put a limit of two year.

"Demand has slowed with the current cycle of low interest rates, however it is expected to pick up should interest rates increase again. With the increase in average house prices over the last couple of years and with the prevailing economic conditions, customers find it difficult to invest in mortgages. For the customer's affordability, it is convenient to know that their mortgage instalment will be consistent for the next two years," Vutula said

So need some advice regards a home loan and finance  contact your mortgage fundi and let them assist you .

Tuesday, 11 January 2011

New Privates Sales in the bushveld - Hoedspruit gets really hot!

Nice to see that things have heated up in Hoedspruit - the bush veld is offering some great hot deals.

Recently picked this link up and being a sceptic followed up and found that these deals were about 35% lower than what was currently selling.

So nice place for your bush springboard especially if you like, white water rafting, trekking the bush, great bushveld training courses (awesome way to clear your head forever) and evenings to die for!!!

So, it is not always possible for everyone to own property especially when its a second property and you do not have cash to buy.

Often the options of syndicating properties is easier, other times just rent, and you can end up going to a new place every time.

So whats hot in the Hoedspruit area.

Well new owners have bought the Ngenya Deli - true blooded Itialians - bien venuto e grazie per il buon mangiare! Finalmente!!

Im sure that all the "boerevolk" will want huge portions, meat etc when polenta and pasta with subtle basil flavours is really what this is all about. Look forward to a great meal with Erika Taverna - email her and check the menu. Una pasta con un bellismo bottiglia di vino..mmmmm!

Then afterwards go down to Thelma at the African Summer Spa - what a magnificent place and what a treat - eeeeeeeish. 

Just the way to get your brain into gear for the real bushveld.....

So Hoedspruit, you have really come of age, there are great pioneers and business folk in abundance and the must be the friendliest people I know.

Love you guys!!