The first of many BEE deals drowning

Moneyweb’s article on Barlow’s re-striking of BEE options echos my earlier post on the trouble of underwater incentive options. The sense of the article is that this sets a bad precedent. Of course, the precedent has been set years ago – I’ve personally calculated the additional costs under IFRS2 for BEE deals in danger of […]

ETFs and gearing, and the property market

Brief introduction to Exchange Traded Funds An “ETF” is an “Exchange Traded Fund”. In it’s simplest form, it is: a company… with very specific assets (e.g. gold bullion or a portfolio of shares with the exact weights of a particular index)… listed on (and traded on) and exchange in which one can invest to get […]

Didn’t expect this? Then you were foolish.

FNB has confirmed that they will be pulling approvals for home loans on a large scale. Many seem to have been caught by surprise. Fools. To an outsider, it appears that FNB made a mistake in underestimating the trouble in the property market when they first gave these approvals. Their estimates of property price growth, […]

When you’re underwater, what’s the incentive?

Employee Share Options became popular during the tech boom of the last millenium. They were used before, but the explosion across more companies, across more levels of employees and as an expected part of executive remuneration was a product of the Silicon Valley boom. There are pros and cons for share options. Used correctly, they […]

Airlines and hedging – now there is praise

Was watching CNN last week, and heard that at least one major US airline, South West, has been making significant use of hedging to manage their fuel costs. Many other US airlines have not been hedging significantly. Another article mentioned that Lufthansa hedged around 83% of their fuel requirements for this year. Air France-KLM hedged […]