“I am the Lord your God, who teaches you to profit, who leads you by the way you should go."

(Isaiah 48:17)

The Investments Division is the centerpiece of the Michael Moyo International, and is structured to create the financial pool for the company's charity and church support programs.

Headed by the Investments Director, the division handles all matters pertaining to investments, and is responsible for executing the company's business plans to ensure maximum profitability from all investments. It functions through an extensive Kingdom Business Plan, that integrates the company's business operations into divine parameters to ensure the company not only bears financial profits but also fruit to the kingdom of God.

The division also manages MMI Investment Limited, a subsidiary of the wider MMI aimed at fostering investment partnerships with other corporate entities. 

Investing in Africa

Africa is widely perceived to be impoverished and corrupt. But the best investment opportunities lie where perception differs from reality. Despite the challenges the continent is facing, Africa remains a good and rewarding investment destination - currently attracting many investors from all over the world. However, at present, only about 1% of the private capital in the world is invested in Sub-Saharan Africa. But, as the continent continues to be more prosperous, levels of private investment are set to increase significantly.

Michael Moyo International acknowledges that Africa's best chance for prosperity and stability is not from dependence on foreign aid, but from sustained private investment and enterprise. To invest in Africa is to enhance the continent’s self-sustainability, thereby, reducing poverty. Thus, to effect this, the company is dedicating a good portion of its investments in Africa.

The company's Investments Division is divided into two sections: 

• Real Estate Section
• Financial Market Section

"Real estate is at the core of almost every business, and it's certainly at the core of most people's wealth. In order to build your wealth and improve your business smarts, you need to know about real estate." - Donald Trump

Headed by the Real Estate Manager, the section undertakes all real estate investments/development initiatives of the company, and is also responsible for market research and analysis for effective real estate approach. Under this section is also the Prime Design Studio, which is responsible for all the company's building projects, and also works for outside clients.

The company's real estate endeavors currently focus on Kenya and the United States:

Overview of Kenya's Real Estate Sector

The real estate industry in Kenya remains one of the strongest in the East Africa region, attracting big investors – both locally and internationally. Better government regulations and proper investment vehicles, enhanced by the availability of capital, are some of the factors that put Kenya ahead of the rest in terms of property investment. 

 Growth of the Sector

Kenya’s real estate market has witnessed significant, steady growth in the last decade, outperforming other sectors like the capital markets and tourism in the midst of an economic downturn. Rapid urbanization, population growth, expansion of the middle class and a well-developed financial industry are the main drivers of Kenya’s property market that is recovering from nearly three decades of underinvestment. These are basic fundamentals that will no doubt lead to good growth in the sector.

Montave - Nairobi

Returns on Investments

The real estate sector is favored by high returns at a minimum cost. The Kenyan market can generate between 20 – 30% in returns, which is rare even in the US or European markets. The growing demand for housing due to rapid population growth means that property prices will keep rising, hence, more returns for developers.

The company's Real Estate Strategy

Michael Moyo International is partnering with HassConsult Limited, a leading real estate company in Kenya, as the company’s main consultant in matters pertaining to real estate investment in Kenya. Our main area of concentration is high rise commercial, residential and mixed-use developments.

The company has two key future projects: Kingdom City and Century Tower. Other smaller, current developments include high-end residential apartments and townhouses.

On a long-term basis, the company aims to expand its real estate investment projects worldwide through a modern business approach and an effective marketing plan.

 ^“Every place on which the sole of your foot treads shall be yours: from the wilderness and Lebanon, from the river, the River Euphrates, even to the Western Sea, shall be your territory.”

(Deuteronomy 11:24)

Overview of the U.S Real Estate Sector

Even as capital markets face some pressure on spreads and the cost of debt, fundamental strength in the US economy acts as an offsetting factor by supporting income growth at the property level. A tight labor market and optimistic confidence measures reinforce expectations for relatively good occupancy rates and continued rent growth in the US real estate sector.

Beginning in early 2016, US real estate entered a widely- anticipated period of income-driven performance. US properties are appreciating at about the pace of inflation.

Appreciation relates back to the positive rent growth generated by properties, as opposed to the out-sized influence of capital flows the US experienced in 2015.

One57, New York City

Looking more closely at the drivers of income, rent growth is the true powerhouse behind the gains. An expectation for continued positive economic growth reinforces our view that property-level income growth should outpace inflation even as the pace of growth moderated in recent years. Income- generated performance is consistent with a long-term expectation for private commercial real estate investments.

Long-term interest rates rose in 2018 condensing the spread available on real estate. Even though the trend reversed and long-term interest rates fell during early 2019, uncertainty remains, and we expect a small upward movement in cap rates over the coming year.

Capital investment into stabilized assets is increasing, an expected outcome in a long expansion. Debt and equity capital is seeking growth strategies, and existing assets are under pressure to compete with new construction. Investors must pay careful attention to the risk-return expectations for incremental capital. A low return environment with excess capital competing for a small number of value-add deals can get aggressive quickly. Resist the inclination to increase the risk level of an investment without commensurate increased reward.

The Encore, Manhattan - New York City

“In the morning scatter your seed, and in the evening do not withhold your hand, for you do not know which will prosper; either this or that, or whether both alike will be good.”

(Ecclesiastes 11:6)

Headed by the Financial Investments Manager, the section is instrumental in exploring and monitoring the financial market ventures of the company, and comprises of a team of financial experts.

The Investments Division, through the Financial Market Section, engages in the capital market as follows (currently with a focus on Kenya and the United States):

 i) INVESTMENT IN TREASURY BONDS

The medium to long-term debt instruments (usually longer than one year) issued by a country’s government to raise money on local currency are a good investment option. In Kenya, maturities of Treasury bonds range from 1-30 years.  Kenya’s Treasury is the first the Michael Moyo International is investing in, followed by treasuries of other stable nations across Africa and the West.

Treasury Bonds Issued by the Kenya Government

So far, the government has issued Fixed-Coupon/Rate Bonds, Zero Coupon, Floating Rate, Infrastructure (project-specific), Restructuring/Special Bonds and Amortized & Savings Development Bonds.

Treasury bonds are issued monthly by the Kenya government. The most commonly issued bonds are the Fixed Coupon Bonds; often having a huge investor demand. They bear pre-determined or market-derived fixed coupon (interest) which is paid semiannually on the face value during the life of the bond. When bought at a discount (required yield higher than coupon), the investor benefits from the discount (capital gain), which is critical for secondary market trading and regular interest payment.

For details on U.S Treasury Bills investments, click here.

ii) INVESTMENT IN CORPORATE BONDS

A corporate bond is a type of debt security issued by a company to raise capital. It is a commitment by the issuing company to pay interest on the outstanding amount lent to it via the bond and to repay the principal at the agreed maturity date. The bonds are sold to investors, and their issuance is premised on the payment ability of the company, which is typically money to be earned from future operations.

NIC Bank, CIC Insurance and Consolidated Bank are examples of companies that have resorted to bonds issue as a means of raising capital in the Kenyan market.

The term of a corporate bond can be any period exceeding one year. Debt instruments for up to twelve months (Commercial Paper) are issued under the same regulatory regime but are subject to some exceptions. Under the Kenyan law, all bonds issued to the public must be listed and should not have any restrictions on transferability.

Examples of current corporate bonds issued and still outstanding in the market are CBA Bond, NIC Bank Bond, CIC Insurance Group Bond, KenGen Limited Bond, Consolidated Bank Bond, Housing Finance Bond and Centum Linked Bonds, together with many others.

The Michael Moyo International seeks to invest in corporate bonds, mainly in the East Africa region, not only as a means of increasing its profits, but also as a way of enhancing its relations with other companies for effective networking.

iii) INVESTMENT IN MUTUAL FUNDS (UNIT TRUSTS)

Unit Trusts, being an investment program funded by shareholders that trade in diversified holdings and is professionally managed, is a viable investment option for long-term investments.

The Michael Moyo International's Investment Division is exploring the following types of mutual funds, in collaboration with Old Mutual and Standard Chartered Bank:

• Money Market Fund: This aims to obtain a high level of asset income while protecting the investor's capital. It aims to outperform the interest rates available on bank deposits by investing in interest-bearing securities and other short-term money market instruments of less than 12 months.

• Income Fund: This aims at achieving a reasonable level of current income, and to offer maximum stability for the capital invested. It is medium-term, i.e. 2-3 years.

• Balance Fund: This aims to achieve a reasonable level of current income and offers investors long-term capital growth. It targets diversified equities and fixed income securities. It is medium to long-term, i.e. over 3 years, and offers protection against inflation by investing in listed shares, preference shares, loan stock, etc.

• Equity Fund: This offers high returns over a medium to long-term period by maximizing the long-term capital growth, i.e, over 5 years.

iv) INVESTMENT IN THE STOCK MARKET

In the equity market, there are lots of discounted options. Through marginal trading, it often creates a great investment opportunity - both for individuals and corporate bodies. The Michael Moyo International has laid out plans to venture into stock market investment, not only in Kenya, but in various countries both in Africa and the West.

An Overview of Kenya’s Stock Market: The Nairobi Securities Exchange (NSE)

Nairobi Securities Exchange (NSE) is publicly traded and is the principal bourse in Kenya - offering an automated platform for the listing and trading of multiple securities. Over the last six decades, the NSE has consistently offered a well regulated, robust and world-class platform for the trading of equities and bonds.

The NSE is an ideal frontier market, offering investors an overview of the Kenyan economy, and — because many listed firms have expanded beyond Kenya’s borders — it also serves as an entry point to the regional economy and exposure to the East Africa capital markets.

Equity Market Reforms: Investing in Kenya’s stock market has been enhanced by a number of market reforms that have taken place recently in an effort to protect investors’ funds. These include the introduction of an automated trading system, more stringent capitalization and disclosure requirements, the adoption of a standard stock brokerage platform, and the eventual demutualization of the NSE.

An Overview of U.S Stock Market: The New York Stock Exchange (NYSE)

The New York Stock Exchange (NYSE) is considered the largest equities-based exchange in the world, based on the total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005, following the acquisition of electronic trading exchange: Archipelago. In 2007 a merger with Euronext - the largest stock exchange in Europe - led to the creation of NYSE Euronext, which was later acquired by Intercontinental Exchange, the current parent of the New York Stock Exchange.

New York Stock Exchange (NYSE)

How the New York Stock Exchange Works

Located on Wall Street in New York City, the NYSE — also known as the "Big Board" — is made up of 21 rooms that are used to facilitate trading. The main building, located at 18 Broad Street, and the one at 11 Wall Street, were both designated historical landmarks in 1978. The NYSE is the world’s largest stock exchange by market cap, estimated to be $28.5 trillion as of June 30, 2018.

The NYSE relied for many years on floor trading only, using the open outcry system. Many NYSE trades have transitioned to electronic systems, but floor traders are still used to set pricing and deal in high-volume institutional trading.

Currently, the NYSE is open for trading Monday through Friday from 9:30 AM to 4:00 PM ET. The stock exchange is closed on all federal holidays. When federal holidays fall on a Saturday, the NYSE is sometimes closed the preceding Friday. When the federal holiday falls on a Sunday, the NYSE may be closed the following Monday.

Key Takeaways

• The NYSE, which dates back to 1792, is the largest stock exchange in the world based on the total market capitalization of its listed securities.
• Many of the oldest publicly traded U.S. companies are listed on the Big Board, the nickname for the NYSE.
• The Intercontinental Exchange now owns the NYSE, having purchased the exchange in 2013.

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