To Apply for Safaricom IPO Online

http://www.safaricomipo.com/

Please before you apply for this shares, please read the prospectus....Be an informed Investor.

So 25% of who?????

So, is the gova selling 25% of safaricom or 25% of its ownership?????
Hapa ni Bw Kimunya...

"On the ownership of Mobitelea, Mr Kimunya said it would not warrant the delaying of the IPO since the Government was only off loading part of its 60 per cent shares. Mobitelea is alleged to own five of the 40 per cent shares held by Vodafone Plc in Safaricom."
http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=3&newsid=119896

So safaricom is worthy more than 200B, says Koimett

http://www.bdafrica.com/index.php?option=com_content&task=view&id=6664&Itemid=5822

So the shareholding structure post IPO is to look as follows:

Shareholder	Percentage Holding
PS, Treasury	35%
Vodafone Kenya & Mobitelea	40%
Kenyan Public	25%

Also according to the Prospectus on page 15 it states
"

In accordance with the GoK s policy of divesting its ownership in public enterprises, the GoK through the

Treasury is making available 10,000,000,000 ordinary shares, par value KShs 0.05 each, of Safaricom

(i.e. 25% of the total issued share capital of Safaricom from the GoK s shareholding in Safaricom) "

Then on the same page it states "Total number of issued ordinary shares
of the Company = 40,000,000,000"
Well that tells me that, 10B/40B = 1/4 which is 10B.....

Dollar vs Shilling

As the Safaricom fever continues, please be careful with the exchange rate. Some of us will lose money due to the exchange rate as the shilling strengthens against the dollar. The dollar might hit KES 50 before the end of the IPO as foreign investors jump in, and then go back to KES 70 after the IPO. Difference = 20 bobs, safaricom shares = 5 bob each????do the maths mr. smartie...
Warren Buffet rule #1, don't lose money, rule #2, don't forget rule #1.

No more multiple CDSC a/cs

No need for Wanjiku to invest her 90K in multiple accounts.The issue will be Pro-rata.If allocation happens to be 50%,it will apply across all accounts hence all you will end up with is shares worth 45K either way.In terms of transaction fee,you will pay more for mutiple accounts and when it comes to harmonisation of accounts,you will cough another 1.5%......for no reason!!

Na hiyo Kimunya amekataa....

http://www.nationmedia.com/dailynation/downloads/biz16032008.pdf

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With the Safaricom prospectus expected in the next two weeks just before the offer begins(28th March),lets indulge on some preliminary analysis based on the facts on the ground:

• The government is offloading 25% of Safaricom worth Ksh 50 B.This means Safaricom(100% )is worth KSH200B


• The total number of shares on offer are 10B at Ksh 5 per share(This means that the total number of issued shares are 40B of which 10B will be listed (25%))


• The allocation will be classified into two categories: Domestic investors(East Africans) and International institutional investors.


• The price for East Africans is fixed at Ksh 5 but for the international institutional investors,it will be determined via a book building process(That means foreigners may have to buy it at a higher price than Ksh 5 per share which would be a good signal of the anticipated opening price on June 9 when the shares begin trading in the NSE)


• 65% of the offered shares are reserved for East African residents-Kenya,Uganda,Tanzania,Rwanda and Burundi(Sorry 'Young' but Nigerians will compete with other 'foreigners' for the remaining 35%).This means the 'East Africans' will need to raise KSH 32.5B.


• In case the domestic investors(East Africans) oversubscribe their category by more than 200%,their is a provision that 15% of the shares reserved for the international pool will be clawed back to the domestic pool(I believe the financial gurus call this the claw back method).


• This means that if the domestic pool raises Ksh 65B( 200% of domestic category),then the shares to be allocated to this category will be 80% of the total offer(ie 8B shares Worth Ksh 40B).


• This method will ensure that one can expect to be allocated at least 60% of applied for shares in the event of a 200% oversubscription in the domestic category(40/65 x 100%=61.5%)


• Safaricom in Year ended 2006 made a Net profit of KSH 12B.This means an Earnings per share (EPS) of: KSH 12B/40B = KSH 0.30


• The share is therefore being offered at P/E of :KSH5/KSH 0.3=16.66

The rumoured Gross profit for year ended 2007 is KSH 21B(Net Profit KSH 14.7B)This means the shares are actually being offered at an EPS of KSH 0.3675 and P/E of 13.6.

The financial year for Safaricom ends in March.This begs the question whether the dividents for year ending March 2008 will be accruing to the government or to the new shareholders.I strongly believe the latter will be the case.I suspect the year end results will be announced sometime in May before the shares hit the market in June.It will be interesting to see in the prospectus the dividend policy Safaricom aims to put in place.

The share is not only well priced based on the unit price Ksh 5,but also well priced based on its P/E.The limiting of the foreign allocation to 35% (or 20% in case of a >200% oversubscription in the domestic category)ensures that Post IPO, the share will receive sustained demand from foreigners as they will want to up their shareholding.

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Unit Trusts

What is the Unit Trust Fund?

A Unit Trust Fund is a trust. It pools money from like-minded shareholders and invests in diversified portfolio of securities, through various schemes that address different needs of investors. The pool of money thus collected is then invested by the Asset Management Company (AMC) in different types of securities. These could include shares, debentures, Stock Market and Money Market instruments, based on the investment objective of a particular scheme. Such objective is clearly laid down in the Prospectus of that scheme. The fund adds value to the investment in two ways: income earned and any capital appreciation realized through sale. This is shared by unit holders in proportion to the number of units they own.

For example, suppose 100 people each set aside KShs100, 000 for investment. Each investor owns one hundredth of the units in issue. The money - KShs10, 000,000 -- is then invested in a range of assets. Suppose after a year, the fund has grown 20% to KShs12, 000,000. If your unit is a hundredth of the total it will then be worth KShs120, 000.

How does it work?

An investment portfolio is divided into equal units. Each unit represents a direct proportionate interest in every asset in the portfolio. The value of the units is subject to the rise and decline in the market value of the assets. You purchase units in the relevant fund and the number you will receive will depend on the amount invested and the ruling unit price (the unit price is calculated daily at the ruling market values of the various investments in the portfolio).

Why do people buy Unit Trusts?

For the average investor, Unit Trusts are a convenient and affordable way of gaining access to investments that would otherwise be available only to large institutions or the wealthy. These investments are selected by experienced professionals who devote themselves exclusively to tracking the markets, analyzing investments, and implementing a consistent investment strategy.

Who should buy Unit Trusts?

Unit Trusts have a place in almost anyone's portfolio. They offer a range of investment objectives that can satisfy a variety of investment needs. Depending on your financial circumstances and tolerance for risk, there are a variety of choices that are right for you. This could include people who have neither the time nor the experience to manage their own portfolios, small investors seeking diversification and 'ordinary' investors who simply want to improve their long-term financial security. This could also include younger investors who can take some risk while aiming for substantial growth of capital in the long term will find growth schemes (i.e. funds which invest in stocks) an ideal option

Older investors who are risk-averse and prefer a steady income in the medium term can invest in Balance schemes (i.e. funds which invest in Stock and Money market instruments). Investors in middle age can allocate their savings between equity funds and balanced funds and achieve both income and capital growth.

The benefits are summarized below.

· Diversification
Unit trusts offer an affordable and convenient way to diversify an investment. With as little as KShs100,000 for most funds, investors are able to hold a diversified portfolio of stocks of companies (or other instruments) that may otherwise be out of their reach. The more companies the collective 'pool' is invested in, the less the performance of each one will affect the whole. So, one of the main fears of direct equity investment -- that you risk losing all your money - is much diminished.

· Professional management of funds
When investing in unit trusts, investors are also leveraging the expertise of fund managers who are full time professionals. Fund managers will sometimes have analysis or research that an ordinary investor would not have access to and this could enable the fund manager to make better investment decisions.

· Access to foreign markets
Unit trusts represent a convenient and effective way to invest in foreign markets. Unit trusts can invest in areas that may be difficult to access as an individual, usually for reasons of size, liquidity or legislation. Even for serious private investors, this is a huge advantage

· Liquidity
Unit trusts are highly liquid and investors can convert their unit to cash anytime, as fund managers are obliged to buy back the units from the investor. Moreover, there are no restrictions on how long an investment has to be held before units can be sold. Investors can easily buy extra units or sell down their holdings piecemeal. They don't have to depend on other buyers in order to sell their units either, because units are created or cancelled depending on demand.

· Economies of scale
Investors with relatively small amounts to invest may still enjoy economies of scale: each investor can gain access to a much wider number of stocks, or markets than if he had tried to buy them individually. For example, to buy all the shares in a typical unit trust portfolio would be very expensive since dealing in small lots in individual shares is pricey. Typically, a unit trust consists of 20-40 stocks

· Ease of use
Unit trusts offer convenience since you can buy and sell units whenever you want. Prices are quoted daily in the newspapers and on web sites. Moreover, there are no requirements for holding period (although anything below three years is generally not encouraged for Balanced and Equity Fund). Investors can also buy extra units or sell down their holdings at any time.

· Cost: To buy all the shares in a typical unit trust portfolio would be very expensive since dealing in small lots in individual shares is pricey. Equally, just to buy shares in a handful of companies would expose an investor to another level of risk entirely.

· Convenience:

No long lines, no keeping up with daily stock prices, and no depositing funds that do not earn.

Simply deposit money into the appropriate Fund and let the Fund Manager invest on your behalf.

Are unit trust guaranteed bank deposits?

Unit trusts are not bank deposits nor are they guaranteed or insured by Suntra Investment Bank Ltd, and/or affiliates, or by any local government or insurance agency. Unit trusts are subject to investment risks, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currencies should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance.

Are unit trusts insured?

Since unit trusts qualify as securities and not deposits, they are neither guaranteed nor insured. However, fund managers and the funds themselves operate under strict securities regulations. Capital Markets Authority regulations require that the assets of a unit trust (its investment) must be held in trust by a financial institution, which serves as trustee. This means that the fund manager does not actually own or have access to the mutual fund assets. As well, all fund assets must be kept separate from the trustee's other assets at all times, which means that the unit trust is not affected by the trustee's financial situation. These regulations are strictly enforced and regularly audited, helping to protect your investment.

However, this does not mean that the value of your unit trust investment will not fluctuate. Investment markets go up and down. The variability of your portfolio will depend on the type of unit trusts that you hold, movements in the investment markets, and the expertise of the portfolio manager.

What are the risks involved?

As a general rule, the more risk you are prepared to take on and the longer you can put your money away, the higher the potential return. Funds have different levels of risk, reflecting such things as the type of underlying assets, the number of stocks held, market liquidity and the manager's overall investment style.

It is sensible to establish at the outset your investment goals (for example, aiming to save for retirement, buying a home, etc) and look for a fund with an investment objective that matches these needs and expectations.

Equity Funds are open to market risk i.e. there is a possibility that the price of the stocks in which the Fund has invested may decrease. Of course, the prices may also go up, making it possible for the Fund to earn profits.

What are the disadvantages?

Collective investments in securities are the ideal investment choice for most people, but should any of the following be applicable to you, you should rather find another way of saving:

· If you want to invest for a period less than three years (except for Money Market Fund investments);

· If you want to use your investment like a savings account - in other words, if you were to make regular withdrawals (except for Money Market Fund investments);

· If you have not made enough provision for insurance, pension and short-term expenses;

· If you want to avoid risks at all costs; and

· If you were to invest borrowed money.

How do I spread risk?

Funds can go some way to spreading risk, by including investments in tens of stocks and covering different markets. However, if you want to diversify risk further, you may want to consider splitting an investment across several funds, including those investing in markets with low correlation to one another. If you are really undecided about a market, consider a monthly savings plan.

What is the ideal timeframe for an investment?

Unit trusts are generally long-term investments, and at least three to five years is usually recommended. Why? Because unit trusts offer diversification of risk via a portfolio of stocks; as such, it will take time for the portfolio to produce a return. For the same reason unit trusts are inefficient for short-term trading - stick to direct equities if you want to punt.

Subscription

What does subscription mean?

When you subscribe, you buy into a particular Unit Trust Fund

When should I subscribe?

There is no 'right' time to buy. Too many investors imagine they can perfect investment timing - so they become preoccupied checking the fluctuations in daily prices before committing. This is folly. As professionals we don't do this because we know that markets discount expected news and there are, anyway, many irrational influences that can move markets. If you feel comfortable with a fund's objectives and its long-term prospects, it's probably as good a time to buy as any.

How do I know if a fund is expensive?

Many investment newcomers make the assumption that a fund costing, say, KShs150 a unit is more expensive than a new one at KShs100 a unit. This is incorrect. The higher price of the first fund reflects the fact that its underlying assets are worth more. The fund might, say, have taken five months (which would be unusual), or five years to appreciate to that level. There is no reason to think that a new fund at KShs100 has more upside when it is investing in the same market and similar underlying assets

What is Offer Price?

Offer Price - Price at which you subscribe to an investment.

What is the Net Asset Value (NAV)?

The market value of unit trust total assets, minus liabilities, divided by the number of units or shares outstanding. This value is used to determine the prices for subscribing and redeeming units. The net asset value (NAV) is the market value of the fund's underlying securities. It is calculated at the end of the trading day. Any open-end fund buy or sell order received on that day is traded based on the net asset value calculated at the end of the day. The NAV per units is such Net Asset Value divided by the number of outstanding units

NAV = Market Value of Assets - Liabilities

- - - - - - - - - - - - - - - - - - - - - - -

Units Outstanding

Redemption/Switching

What does redemption mean?

When you redeem (sell) your units, you sell them.

What does switching mean?

Switching allows you to interchange your fund holdings foe example moving from Balanced Fund to Equity Fund.

When should I redeem my holdings?

Once invested, the hardest part is to know when to take profits or cut losses. Markets are proverbially a pull between greed and fear, and it is these emotions that can impel investors to hang on to paper gains too long or sell too quickly. If you're thinking of redemption, ask yourself simply if you have given an investment enough time to perform, whether you have reached your objectives and how the underlying fund/market prospects appear.

What are the tax benefits for investing in Unit Trust Fund units?

Under Kenyan law there are no capital gains taxes. However, any money paid out in the form of a distribution/dividend from the fund is treated as income, and may be subject to 5% tax. You should seek independent advice if unclear about your tax status.

What is a Prospectus?

It is a document which an open-end fund, is required to provide to investors. Funds say that investors should read it carefully before investing or sending money. A prospectus contains descriptions of:

• Fees, in a standardized format
• Investment Objective
• Some financial data
• Investment methods
• Risk factors and description
• Investment management and compensation
• Dividend and Capital Gain distributions

What are Dividends?

A Unit Trust Fund may receive dividend or interest income from the securities it owns; it is required to pay out this income to its investors. Most open-end funds offer an option to purchase additional shares with the dividends. Dividends are often made yearly.

What are Capital Gains?

A capital gain is the difference between what you paid for an investment and what received when you sold that investment.

Are investments in Unit Trust Fund units safe?

No stock market related investments can be termed safe with certainty; they are inherently risky. However, different funds have different risk profile, which is stated in its objective. Funds which categorize themselves as low risk, invest generally in debt which is less risky than equity. Anyway, as Unit Trust Funds have access to services of expert fund managers, they are always safer than direct investment in the stock markets.

Do Unit Trust Funds assure returns?

It is not possible to assure returns in a volatile market

How do you make money in a Unit Trust Fund?

There are three ways in which you can make money in a Unit Trust Fund

· First you can earn a dividend from the Unit Trust Fund. If you do not want the dividend, you can choose to be in the Cumulative Option. When a dividend is declared, the NAV of the units will fall, since dividend is paid out of the appreciation in the value of the unit

· Next, you can make a profit by selling the Unit Trust Fund units at a price higher than that at which you bought them. This is capital gain. (If you sell the units at a lower price, you make a capital loss.)

· Finally, the value of the units you hold can appreciate. This is unrealized capital gain. Dividends and capital gains are treated differently

When and how does fund manager arrive at distributions?

The financial year of the Suntra Funds shall commence on 1^st January and end on 31^st December. Income earned by the Suntra Funds shall be in the form of interest earned from Treasury Bills, Bonds, fixed deposits, dividends, capital gains and security appreciation. The net income from Suntra Funds shall be distributed to the unitholders at the end of the financial year. However, an allocation of income shall be done on daily basis and shall be reflected in the price of the unit.

As Unit Trust Fund schemes invest only in stock markets, are they suitable for small investors?

Unit Trust Funds are meant for small investors. The prime reason is that successful investments in stock markets require careful analysis which is not possible for a small investor. Unit Trust Funds are usually equipped to carry out thorough analysis and can provide superior returns. Some of the strategies of carrying out thorough analysis include: Talking to management of the particular companies, analyzing financial statements, researching sector, national economy, other influences such as politics and global economy.

What is cost averaging?

If you find saving money next to impossible, you are not alone. Many Kenyans find that the biggest obstacle to meeting their goals is putting money aside after their living expenses. Shilling cost averaging is an excellent way to save and to minimize volatility risk and maximize returns. By purchasing the same Shilling amount on a regular basis, you buy more units when prices are low and fewer units when prices are high. The result is a lower average cost per unit over time.

What is a load?

A load is a sales commission charged when you buy or sell certain Unit Trusts that are distributed through stockbrokers, banks or financial planners.

• Front-end load refers to a charge when you purchase your units. Front-end loads are often negotiable and average around 4-5%.
• Back-end load refers to a charge when you sell your units. Back-end loads start around 5% and decline as you hold your units for a number of years.

What are the types of Units that Suntra offers?

The fund shall offer two classes of units namely "Class A" and "Class B" units. Each class will invest in the same "pool" (or investment Portfolio) of securities and will have the same investment objectives and policies. The two classes offer investors the ability to select a fee structure that is most appropriate for their investment goals (including the time that they expect to remain invested in the fund).

What are Class A Units?

Class A units will impose a front-end sales load. The units are sold at the offering price, which is net asset value plus an initial maximum sales charge of up to 5.0% reduced on investments of Kshs 500,000 or more, subject to a minimum charge of Kshs 500/=.

Size of Investment	As % of Offering Price
Less than KShs 500,000	5.0%
KShs 500,000 but less than KShs 1,000,000	4.75%
KShs 1,000,000 but less than KShs 2,500,000	4.5%
KShs 2,500,000 but less than KShs 5,000,000	4.25%
KShs 5,000,000 or more	4.0%

What are Class B Units?

Class B units will not have a front-end sales load. These units are suitable for long term investments. Units of the Fund are sold at net asset value and are subject to a contingent deferred sales charge, subject to a minimum charge of Kshs 500/=.

Year Since Purchase	Contingent Deferred Sales Charge as a Percentage of Amount Subject to Charge
First	5.00%
Second	4.00%
Third	3.00%
Fourth	2.0%.
Fifth	1.50%
Sixth and After	1.0%

How much must I invest?

Equity, Balanced and Money Market funds: the minimum investment is a KShs. 100,000 lump sum and KShs. 10, 000 recurring.

How do I pay?

By means of a lump-sum investment at any branch within our network , bankers cheque or personal cheque addressed to the appropriate Fund.

What is better: a recurring investment or a lump sum?

With a lump sum you can choose a time when prices are in your favor to get the best possible growth over the investment term. This requires expertise and good timing. A regular investment, of a fixed amount every month for instance, offers you the benefit of rand cost averaging. This means the average cost per unit will be less than the average of the prices at which the units were purchased over the same period.

May I change the size of my recurring investment?

Yes, it may be increased or reduced according to your needs. You can simply pay the new amount or instruct us in writing to adjust your settings.

May I switch from one fund to another?

Yes, A signed switching form is needed. Only the statutory fee and the difference in the initial fees will be payable.

What proof do I have of my investment?

You will receive a purchase advice as proof after every initial investment and additional lump-sum payments. You will also receive a Statement of Transactions every month.

Income

Do I receive an income on my investment?

Yes, the income is earned from dividends on the shares and interest on the bond and cash investments. The net income received is divided equally among the number of units in issue.

When does my fund declare income?

Most of Suntra's funds declare income twice a year.

Should I reinvest income?

Yes, definitely, unless you require it for something else. Simply reinvest your income and additional units will be purchased for you in the fund of your choice.

Withdrawal

How do I sell my units?

By instructing us in writing to do so. We will repurchase your units at the price applicable on the date on which we receive all the required documents (a signed redemption form and a copy of Identity document or passport). No costs are payable to sell your units.

Benefits

Are my units transferable?

Yes, just like ordinary shares.

May I offer units as security?

Yes, by pledging your investment to the institution. You may then not deal with the investment until such time as the pledge has been cancelled.

Does a unit trust offer tax benefits?

According to current legislation, your dividend income and capital growth are tax-free. In addition, a portion of the interest earned is tax-free, as determined by legislation from time to time.

What about inflation?

In the long term, the returns on Suntra's funds may be higher than the inflation rate. Naturally, this compensates for the negative effects of inflation.

What will happen to my investment in the event of death?

You may bequeath your investment like any other assets in your will.

May I invest in someone else's name?

Yes, but note that ownership is transferred fully to the registered unitholder(s) – only he/they may deal with the investment.

Can unit trusts be registered in the name of a minor?

Yes. The minor is regarded as the legal owner and all documents are to be signed by a parent or legal guardian if the minor is younger than 18. Children older than 18 must sign themselves, assisted by a parent or legal guardian.

Can I transfer my investment to someone else (for example, my husband/wife, children, grandchildren)?

Yes. An investor transferring his/her investment will have to pay securities transfer fees.

Can a beneficiary be nominated on my investment?

No. The value of your units forms part of your estate and is left to your heirs, in accordance with the provisions of your will.

Smart NSE: Add this

The foreign exchange movements will wipe out your gains:
Depends. On how long you are investing, currency used and timing. If you send funds for an IPO such as Safcom for speculative purposes using one of the strong currencies, you definitely lose because the Ksh will strengthen pre-IPO and weaken post-IPO as others do like you. For the long-term investor, as the economy grows, then ceteris paribus, the Ksh will strengthen, i.e. you'll gain twice. Or you could keep the funds in Kenya.
You are crowding out resident Kenyans:
Probably. So are you if you are in real estate or helping someone set up a business i.e. BS. Kenya needs your foreign currency/capital badly. And if you to make have a buck to send it there, investing at the NSE is your route
Its not easy to get a good broker:
Yes. Go for the obvious ones (D&B, CFC) and ones that meet your initial needs until you have found your feet.
It’s an illiquid market i.e. it’s hard to buy/sell shares when you want them
Yes. It’s not the FTSE or NYSE. There are like 49 stocks being traded and most have around 30% of their shares that are actively traded. That said....
Shares take long to execute:
Depends. On what quantity you want, the share you are looking to buy and your price vs the prevailing market price and timing. Typically, you can get 10,000 KCB shares in the same day if you've priced them within range of the previous day's high and low provided its a normal trading day i.e. there are no events affecting KCB's price or the NSE. By comparison, you'll be waiting for days to get 1,000 NMG shares.
There is no online trading:
True. But you can do your orders online (for D&B anyway). The actual issue is that Kenya doesn't ye have the legislation allowing Kenyan banks to use encryption for online transactions.
There is a lack of information about the listed stocks:
True up to a point. The last two years have seen an explosion of information websites from NMG's Business Daily, StocksKenya, brokers research teams to various blogs. On the other hand, a combination of unclear corporate governance legislation, CMA incompetence and firms' lack of awareness of shareholder value mean many barely have functional websites let alone providing updated information.
Its not easy to send money to a broker:
Apart from D&B, I don't of any other broker that has a correspondent bank. So this might be a tricky one if like me, you like to see an audit trail in your payments.
The trading charges are very high or unknown:
Myth. You get charged 2.12% if your order is under Ksh100,000 and 1.82% if its over Ksh100k. The tricky bit comes when your order even if over Ksh100k can not be executed in one go. Then you get charged 2.12% for each separate order.
The brokers will take your money/shares:
It’s been happening since the CDSC came along and even before. However, I don't expect it to go much longer because even GoK will get tired of it (otherwise, we won't get the foreign investors we want to come to Kenya). If you have relas/friends you trust in Kenya, pay them a apportion of your dividends and once a week the will go and demand a printed of your account from either your broker or CDSC.
Brokers will ignore your price requests:
True, if they are crooked, they'll. Others will ignore your order altogether if you ask for a price at 50% below prevailing one unless you know something they don't. Typically, ask for a price ceiling i.e. "at no more than". For most brokers, the order remains live for a month and then you have to re-order again.
Brokers only pay attention if you have loadsofmoney to invest:
Several brokers, Kestrel among them have set thresholds for the type of client they want. I think D&B should do the same because it practices it. However, some of the smaller brokers (e.g. Afrika Investment Bank) do deal with investors equally.
Capital gains tax is not applied when you sell your shares:
True, but you get 30% charge on dividends.