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So I am looking at my portfolio with a lot of pride. Up until today I have, through the grace of God, managed a stunning portfolio. At least this is what I was telling myself until a killjoy peeked over my spreadsheet and with a crooked smile retorted, "good morning." Asiacell! You heartbreaker who just wont go away. Okay, fine. I figure it is time I faced this issue and it is better late than never. No savvy investor should practice holding a losing stock, and I violated this rule with Asiacell. Perhaps I should have let her go a while ago in loyalty to my 3% loss rule whereas after a 3% hit, a stock must be sold for a loss. My question to investment friends is "what to do about Asiacell?" Viable Strategies (my personal consideration highlighted blue) Buy more If you were like me, you got in on this stock at its initial offering (22 points). Today the stock can most likely be purchased at just under 10. This would bring the average buy to 16 which might be a good price point if it is ever to recover. A person would have to ask themselves if they can see this stock rising to 16 points in the near future? Additionally is the handsome dividend payouts which do not appear to be lessening any time soon. I haven't experienced any other stock coming remotely close to the dividend payout of TASC. Owning more shares of TASC might equate a significant increase in yearly dividends. This option is a medium consideration for me especially if I elect to double my holdings. It is a fine time to execute a buy order as well since the stock appears to be near its bottom {nowhere to go but up}. Hold One could sit on the stock and just collect dividend checks while hoping it rebounds. Believing it will rebound however might be QUITE a stretch. A person has to first understand why it fell before they can believe why it would rebound. In my estimation, TASC fell because majority holders of it are foreign investors (75% I believe) who are very skittish about the situation in Iraq. As the security situation in Iraq improves, foreign investment will recover which could me good things for share price of TASC. This option is a weak consideration for me. I do not believe TASC will more than double its current value within any reasonable time frame especially once its competitor ZAIN comes to the bourse. TASC should probably lose market share as other telecoms become available. With AGM a ways out (December most likely) it is risky to hold through AGM and try capitalizing on any 2016 dividend payout. Sell It This is probably the most favorable decision for TASC holders seeing how its competitors are poised to come online in the near future. Even though TASC is hovering around its all time low, it might even fall further once the buzz of ZAIN fills the air. Letting go of a loser stock is tough to do because of realized losses, but a savvy investor has to know when to call it quits even when quit should have been a long time ago. This is my strongest consideration currently. I am leaning toward cutting it loose. Hopefully the dividend payout for 2015 will help recover some of my losses, but it is risky business to continue holding the stock. What are your thoughts my friends?
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Telco IPOs a Bullish Sign Posted on 05 October 2011. Tags: Asiacell, ISX, Korek, Zain The mobile phone operators are finally getting their IPOs [initial public offerings - A company's first offering of common stock to the public] organized. Recently Asiacell and Zain began conversions to joint stock ownership. Zain is also reported to have engaged Citibank and BNP Paribas to work on valuation. So far as I know, Korek has not been in the news but it is presumably on a similar track.These will be enormous offerings for a market as small as the ISX. Each company is required by the conditions of its license to list 25% of its shares. Asiacell alone will have to list 67.5 bn shares. (See this post.) At par (IQD 1), that would be about US$ 58 mn and they will certainly be looking for a higher price than that. With ISX daily volume now averaging only around US$ 2 mn, the total for the three IPOs could easily be the equivalent of a year’s worth of trading. You might think the ISX would be overwhelmed. In fact, shouldn’t the market be falling already, as people raise cash for the new issues? Actually there’s no cause for alarm. The companies clearly will not be trying to raise hundreds of millions of US dollars from local investors. The involvement of Citi and BNP makes it obvious that the main focus will be on foreign institutions, most of which are not yet in Iraq at all. For these investors, the key obstacle to investing in Iraqi shares is the lack of a custodian bank. (See thispost for more on the custody problem.) But this will be easy to fix. According to the Word Bank’s Republic of Iraq Financial Sector Review (p. 54), “a major international bank” [i.e. HSBC] has already made the necessary preparations to provide custody services and is just “waiting for the necessary licenses to be granted.” (There’s a link to the World Bank report here.) The real significance of the IPOs is that they can provide the stimulus necessary to get those licenses issued. That, in turn, will allow a host of new foreign investors, potentially commanding far greater amounts of capital than the telcos will be raising, to get into the market. This portends not so much a flood of new shares as a deluge of new money. ================================ i must admit that in my trading strategy, i lost track of the significance of the telecoms highlighted in the above article. digging up this article from the past has helped me realign some thinking. asiacell and zain are definitely foreign investor hooks into the ISX. their inclusion on the bourse not only multiplies its size but also pressures the isc to get custodian banks registered and operating. THIS is where we will make a killing, the custodian banks coming online and directing foreign capital into ISX telecos. now i am thinking it is best to play the telecoms as a long term strategy. buy and hold.
