Ten years is a long time to wait for a return on an investment, so my theory is that if you going to wait ten years then make it worth it. I'm thinking of entering the funded option and purch***** 500 Sasol shares it should cost me about 10k, at least then after ten years i have something to wait for, what do you guys think, p.s. i'm 23 years old. The disadvantage about the cash option is that you pay out the fee, but don't get the full service, you still going to wait for ten years for your shares to be listed, you might get the dividents but i dont thing it is worth it. what do you think
On the funded deal, I calculated an IRR of 29.68% based on many assumptions and my understanding of the deal: 1)You buy for any specified amount 2)10% of this amount is paid upfront 3)Capital growth in the share price of 8.33% per annum for the next 10 years. ( Starting price used is R485-as per last week ) 4)The 90% funded amount is funded at an interest rate of 11% for the life of the transaction-10 years. 5)Pref divs earned of R16:yr 1 to 3. R22:yr 4 to 6. R28:yr 7-10. 6)Interest expense will exceed div income for the 10 years thus you need to fund the deficit on a monthly basis. Thus, for me it seems worthwhile provided I can get a decent allocation on application.
i have looked at it from a less technical point. 1.Consider the success of other BEE deals, for example Grand Parade Investments shares bought for 70c a share and will now list for R5 eight years later. 600% growth, other good deals MTN, M-net, Phutuma, etc 2.the calculation was done on a 60% weighted average price towards the end of last year, closing price now is approximately R503. 3. with the increase in oil/petrol (with no promise of ending) it seems to be the way to go. i will definetly buy, i think it's worthwhile for my future and that of my son!!
The closing price of R503 should not be clung onto. Last year when the US sneezed, every single stock market and almost every single share got hammered into the ground. Just bear that in mind that R366 is cheap compared to the current R500, however, you still have 10 years to go. Anything is possible in that time. Fortunately SOL is a blue chip and probably won't end up like a Verimark or Imuniti..