Category: Finance

Published on by Nayar

Key Rate is down to 4% from 4.5% in Mauritius. Should you rejoice?

As from September 2024, the new rates came into effect.

Before starting to chant for your favourite politician, let’s see if its a good thing.

If you have lots of Money in the Bank?

Bad news for you. You will receive less interests per year on your savings account. You will now receive Rs 26,000 instead Rs 31,000 on Rs 1 million Rupees in MCB. So your money isn’t going to grow as fast in the bank.

If you have a current home loan?

Good news for you mate if you have a floating interest loan. You will be paying less on interest charges now as the PLR has also decreased.

So yeah. You may chant.

For new home buyers?

If interest rate decreases, meaning you’ll be able to get higher loan amount to purchase your dream price right? RIGHT? Sorry but nope.

Let’s consider a person getting Rs 30,000 per month as salary. The bank would give a maximum loan of Rs 1,832,710 to that person if the interest rate 6.75% pa. The person can therefore make an offer of Rs 1.8 million to a house owner to purchase. 

When the interest rate is decreased by 0.5%, the person will be allowable of a loan of Rs 1,930,222.

But you see. If you have money despite not doing anything, your colleagues also has more money to bid on the same house. In the end, you’ll end up paying the house Rs 1.9 millions. You didn’t make any “progress”.

Conclusion

Money is losing value.

Published on by Nayar

Breaking Even on FUNDKISS after 5 Years.

I have been investing on the FUNDKISS platform since 2019. FUNDKISS is a peer-to-peer lending platform based in Mauritius. Over the years, I have invested Rs 525,000. Today, i just broke even after 5 years!!!

There’s no point is calculating CAGR. Do you think it was worth it? If I would have kept the money in the bank, with interest I’d would have gotten much more for 5 years. I know COVID19 played a huge part in this sub par performance. I have lots of capital in default + arrears.

While I still have lots of capital outstanding, I don’t have any big expectations from them. Some projects haven’t paid me in 8 months. Most of the remaining ones are non-performers.

I’m glad I didn’t “lose” money in math terms but we’ll have to ignore inflation figures or even basic saving interest rate (3.1%) right now. How was your experience so far? 

Published on by Nayar

2 Years investing in Mauritian Stock Market.

Today marks exactly 2 years since i first purchased stocks on the Mauritian stock market.

Yeah. I bought 100 shares of MCB. But then the prices dropped after that so I purchased more and more as I gained more confidence.

I regret to not having bought more of the stocks at those cheap prices but anyways. It’s good that I started. I invested in 11 companies since then.

 

So how is my return today, after exactly 2 years you ask?

Well well well, I made some substantial loss of around Rs 40k with 4 stocks (18k + 19k + 0.5k + 2k). But these are just paper losses as I haven’t really sold them since I bought (unrealised loss). But on the the rest of my stocks, I made some quite some money; again just paper gains as I haven’t sold them for a profit. I did receive like some 60k of dividends throughout these years.

How much did I lose as compared to the US Dollar? On 18th May 2021, USD was Rs 39.45. Today is it 45.50. That’s about 15% loss in purchasing power.

But my portfolio grew about 10% in these 2 years. Therefore my purchasing power compared to USD was around -5%.

If I would have just bought USD in May 2021, It would have been more profitable. But anyways, I think I’m kinda satisfied with my portfolio. It’s quite liquid and gives dividends. My Compound annual growth rate (CAGR)  is 4.88% currently which is slightly above what banks would give as interest on fixed deposit. Fixed deposits don’t go down in value though.

Yeah. Sometimes the stock value goes down and you’re like wondering is it transitory or something really bad happened. But as I said, I did lose substantially with some stocks. I also made the mistake of listening to some of my friends instead of just trusting my guts and my analysis. Fortunately my main stocks are covering my losses.

I hope you enjoyed reading my experience. Have a great day or night wherever you are 🙂

Published on by Nayar

First Time Attending Company Annual Meeting: SBM Holdings Ltd.

I started investing in the stock market since May 2021. I had bought few shares of SBM Holdings Ltd (SBMH.N0000). And I was therefore sent the Annual Report and an invitation to attend the Annual Meeting. BTW, SBM stands for State Bank of Mauritius.

Due to COVID-19 pandemic, the meetings were separated into multiple rooms so I could get to see the board members live.

Basically the meeting starts by the board members saying all is good. Then QA session where board members are asked questions about scandals, mismanagement of funds. The board will answer these:

  • We are only a holding company so we cannot answer what the operating company are doing
  • We cannot divulge loans given to certain customers as these are private
  • We take note, we will relay the information to the children company board members.

So basically what I understood is that the actual banking company is shielded from any scrutiny as I have shares only in the holding company and thus will not get invited in the children annual meeting if they do happen.

Everyone got 2 bags of food: 1 food pack for breakfast and 1 food pack at the end for lunch. Yay!

Tastes OK but I would have preferred Dividend payments. The goodies bag cost more than the amount of dividends I would have got but still 😛

Next hopefully will attend the meeting for SWAN GENERAL LTD. Wonder how similar it would be to this one.