Fairfax India new issue

[giofranchi]

http://www.fairfaxindia.ca/news/press-releases/press-release-details/2015/Offer-to-Acquire-26-of-IIFL-Holdings-Limited/default.aspx

 

It seems to be a very large investment! More than 25% of AUM. After all non-banking finance, housing finance, wealth management, retail broking, institutional equities, investment banking and insurance distribution, certainly are in Fairfax’s sweet spot, and backed by a rapidly growing market. Of course I like it! ;)

 

Cheers,

 

Gio

 

[giofranchi]

Skill India Mission

 

http://timesofindia.indiatimes.com/india/Skill-India-Mission-Highlights-of-PM-Modis-speech/articleshow/48085324.cms?utm_source=twitter.com&utm_medium=referral&utm_campaign=TOIIndiaNews

 

Cheers,

 

Gio

[Guest MarkS]

I’m brand new to this board - and very impressed with the quality of the posts.  I would love to pick up some of these shares, but I would need to hold them in an IRA.  l’ve been researching whether dividends issued by Canadian companies paid to owners of shares held in an American IRA are subject to Canadian withholding tax.  First, let me state that I’m neither a tax attorney nor a CPA.  I’m just an ordinary Joe trying to make a little money.  I’m offering the pitiful results of my research in the hope that someone might find it helpful.

 

A tax treaty exists between the United States and Canada.  An American can file form NR301 with their brokerage firm and get a reduction in Canadian withholding tax from 25% to 15%. As I understand the process, NR301 applies to ordinary brokerage accounts not retirement accounts.

See:  http://www.cra-arc.gc.ca/E/pbg/tf/nr301/README.html

As stated in form NR301, if you are seeking a tax exemption, you must “apply to the CRA for a Letter of Exemption. Refer to guide T4016, Exempt U.S. Organizations – Under Article XXI of the Canada-United States Tax Convention.”

 

The Canadian Revenue Agency states that you can seek a tax exemption for Canadian Dividends paid to owners of shares held in an IRA:

 

“Individual Retirement Accounts (IRAs) are also exempt under Paragraph 2 of Article XXI. In order for an IRA plan to qualify for purposes of a Letter of Exemption, the custodian/trust/individual must provide the CRA with the following information:

• The name of the beneficial owners of the IRAs

• The Tax Identification Number of the beneficial owners

• The addresses of the beneficial owners

• A notarized affidavit as to the country of residence of the holder of the IRAs and either

i. a hard copy of the IRAs approved adoption agreement of an Individual Retirement Plan/Trust Agreement

ii. a hard copy of the custodian’s Individual Retirement Plan/Trust Agreement, and

iii. a hard copy of the fully completed IRS Form 5305 or 5305A”

 

See:    http://www.cra-arc.gc.ca/E/pub/tg/t4016/t4016-e.html

 

Obviously, an individual would have a difficult time complying with these requirements.  A brokerage firm would need to spend a significant amount of time and money complying with the rules for the benefit of their clients.  I wasted two hours of my time today on the phone with TD Ameritrade and MerrillEdge, two hours which I will never get back, trying to get someone on the phone that was willing and/or able to help.  If you have accounts with either of the above, an exemption is probably not in the cards.  I cannot speak for other brokerage accounts.  Anyone interested should contact their own brokerage firm. I would love to know if other firms are more interested in helping their clients.

 

[beerbaron]

I live in Canada, if I buy US equities thru my retirement account dividends are exempt from the US witholding tax. I believe it's part of a tax treaty between both countries. I did not have to fill in any paperwork, the broker just "knows" not to withhold anything. I would believe that it would be the same thing in the US. It might just be that the persons you talked to know very little about those details. If I were you I'd do a test and buy a dividend stock a few days before the dividend and see what happens when you get your statement. It will cost you 5$ in fees maybe but you won't lose another 2 hours at least.

 

BeerBaron

[giofranchi]

A republic of greed: Why PM Modi must crack the whip on India’s snowballing corruption

 

http://economictimes.indiatimes.com/news/politics-and-nation/a-republic-of-greed-why-pm-modi-must-crack-the-whip-on-indias-snowballing-corruption/articleshow/48108824.cms

 

 

Gio

 

 

 

[Guest MarkS]

Thanks beerbaron.  That's not a  bad idea. 

[Tommm50]

Mark S. and Beer Baron, I've been getting Fairfax dividends for years into my IRA (I live in the U.S.) and never had any withholding.

[Guest MarkS]

Thanks Tommm50. Appreciate the info.

[bearprowler6]

Another deal by the Fairfax India team:

 

http://www.stockhouse.com/news/press-releases/2015/07/20/fairfax-india-to-acquire-national-collateral-management-services-india-s

[giofranchi]

Another deal by the Fairfax India team:

 

http://www.stockhouse.com/news/press-releases/2015/07/20/fairfax-india-to-acquire-national-collateral-management-services-india-s

 

Another large investment: more than 12% of AUM.

 

National Collateral is a leading private-sector agricultural commodities storage company in India that has operated for over 10 years and is now preparing to expand to take advantage of the significant market potential in India's under-developed agricultural storage industry. The company operates in the mid-stream agriculture value chain by offering end-to-end solutions in grain procurement, testing, storage and collateral management. As a result of recent fiscal and non-fiscal policy announcements in India, private sector players such as National Collateral (www.ncml.com) are enhancing the range of solutions provided to Indian farmers, traders, food processors, banks and governments and to the businesses connected to the agriculture supply chain, thereby generating significant efficiencies to help India achieve its stated national objective of greater food security.

 

Sounds like another opportunity for significant growth.

 

Cheers,

 

Gio

[bearprowler6]

For those wanting to do a deeper dive---here is a link to the NCMSL's website:

 

http://www.ncmsl.com/index.asp

 

 

[giofranchi]

Q2 2015 Results.

 

The two meaningful investments recently announced were made after the end of the quarter.

 

Cheers,

 

Gio

2015-Q2-Press-Release-FIH-Final.pdf

[giofranchi]

Some not so great news...

 

http://www.forbes.com/sites/dougbandow/2015/07/30/india-losing-opportunity-to-become-next-great-power-narendra-modis-faltering-revolution/

 

 

Gio

[gym97]

for anybody that is interested.

 

http://www.fairfaxindia.ca/news/press-releases/press-release-details/2015/Fairfax-India-to-Acquire-45-of-ADI-Finechem-Limited-and-to-Make-an-Open-Offer-for-an-Additional-26-of-ADI-Finechem-Limited/default.aspx

 

 

[Viking]

The price dipped below $10/unit this morning, which is about where it ipo'd at the beginning of the year. I like the idea of getting some exposure in my portfolio to India; can't think of a better way than Fairfax. The key will be to give FFH 3-5 years; I think it will take that long to build a very good portfolio of businesses.

 

My guess is FFH will be focused on buying positions in quality businesses (given the other risks such as corruption etc). The stock market in India has also been on a tear the last few years. It looks to me like FFH will be making purchases at fair prices. This means the benefit to FIH shareholders will take years to show through earnings growth at the acquired companies.  :-)

[wondering]

Now that the company is over its IPO honeymoon stage, and the stock is trading very close to book value, and I am considering buying a little.

 

My question is regarding the currency.  The reporting currency is in USD.  The functional currency is in INR.  I am Canadian with Canadian dollars.  I am concerned if the Canadian rises against the US dollar, it will greatly diminish my investment.  Upon greater reflection, I am thinking my bigger concern should be how the Canadian dollar performs vs. the Indian rupee because the US dollar is essentially "in" and "out".

 

Is my thinking correct?

[giofranchi]

2015 Results:

 

http://www.fairfaxindia.ca/news/press-releases/press-release-details/2016/Fairfax-India-Holdings-Corporation-Financial-Results-for-the-Year-Ended-December-31-2015/default.aspx

 

Fairfax India is selling exactly at BV: not bad for a company very well positioned to capitalize on India's strong demographic trend.

 

Cheers,

 

Gio

[ourkid8]

http://www.bloomberg.com/news/articles/2016-03-28/fairfax-to-buy-bangalore-airport-stake-for-322-million-from-gvk?cmpid=yhoo.headline

 

Fairfax to Buy Bangalore Airport Stake for $322 Million From GVK.

 

 

[obtuse_investor]

A toll bridge purchase. Wonderful!

[Jurgis]

A toll bridge purchase. Wonderful!

 

It's not a bridge. It's an airport.  ::)

 

 

 

jk

[hobbit]

http://www.fairfaxindia.ca/news/press-releases/press-release-details/2017/Fairfax-India-Holdings-Corporation-Intention-to-Make-a-Normal-Course-Issuer-Bid-for-Subordinate-Voting-Shares/default.aspx

[WneverLOSE]

Selling shares at 11.75$ and buying them back just a few months later for 18$.

 

This will surely create a ton of value.

[obtuse_investor]

This is a typical NCIB announcement. It gives management the right to repurchase stock, should they choose to exercise it.

 

 

[WneverLOSE]

Ya it was part joke part true criticism, they actually did prove the theory when they bought 1.7m shares just above the price they issues the shares (add the friction costs and it becomes material)

[DooDiligence]

Ya it was part joke part true criticism, they actually did prove the theory when they bought 1.7m shares just above the price they issues the shares (add the friction costs and it becomes material)

 

Does anyone know if they have any repurchase agreements with OMERS from the last offering?