mendes911:

We miss DangCem today. All thanks to the last minute padding. LOL.
Nice Job Sir Intendy.

Thank you sir.

debeey87:
Are there Nigeria brokers that offers services to investors willing to buy US stocks?

There is a new company called Chaka...google is your friend

Nigerian Stock Market Lacks Depth—Finance Minister
https://businesspost.ng/economy/nigerian-stock-market-lacks-depth-finance-minister/

Naira Appreciates at I&E Despite 383% Rise in Demand for Dollar
https://businesspost.ng/economy/naira-appreciates-at-ie-despite-383-rise-in-demand-for-dollar/

Crude Oil Sustains Gains to Fourth Day on Friday
https://businesspost.ng/economy/crude-oil-sustains-gains-to-fourth-day-on-friday/

NASD Posts Strong Gains as NEDP Share Price Rises Third Time
https://businesspost.ng/economy/nasd-posts-strong-gains-as-nedp-share-price-rises-third-time/

onegentleguy:
CBNs new directive to DMBs and other operators on OMO auctions.

I believe this move by the CBN is aimed @ easing off pressure on the reserve while keeping rates at attractive runs for FPIs, as a way of incentivizing them to stay put(not repatriate) and possibly roll over their funds @ maturity.

Elsewhere, there will now be even more excess liquidity that should find its way outside the fixed income space(particularly the equities market) as more fund from Individuals and cooperate investors(including certain class of DPIs) seek alternative channels for returns @ maturity of their current OMO play.
With this directive, I believe the DMBs(banks) will make so much returns in Q4 given that there should now be a wider pool of arbitrage to tap from.
YoY return will most definitely come in higher as interest income(from trading gains) surges up.

It's a strong POSITIVE for the equity market space !!

It is well.

THE LIKELY IMPLICATIONS OF CBN's OMO BAN...

The Central Bank of Nigeria recently announced the exclusion of non-bank locals (individuals and corporates) from participation in its Open Market Operations at both the primary and secondary market. The exclusion implies that only Deposit Money Banks (DMBs) and Foreign Portfolio Investors (FPIs) can participate in OMOs, while everyone else, including non-bank financial institutions, will have to shift focus to T-bills and other investment options.

We believe the CBN's policy is largely in line with its drive to divert liquidity away from risk free instruments to the real sector. Prior to the current move, the apex bank instructed banks to prevent customers with outstanding loans and recipients of intervention funds from investing in T-Bills or OMOs. Restricted from participation in OMO transactions, retail and institutional actors will have to seek alternative destinations for their funds, creating extra liquidity in other assets. Below are the likely implications of the restrictions on fixed income and equity markets.

Fixed Income

The most suitable alternative for OMO bills will be investment in government T-Bills as they are similar in tenor and have been largely interchangeable in recent years. We, therefore, expect to see increased demand in the bills market and at subsequent NTB auctions through the year, given that c.27.7% of total OMO maturities (c.N1.2 trillion in November and December alone) that's due to non-bank locals cannot be rolled over in coming months.

This, together with NTB maturities and other autonomous inflows, is expected to drive yields lower at the secondary market (both the bond and money market). On average, yields declined by 15bps across the bills curve and 4bps in the bond market yesterday, the first trading session since the release of the circular.

An alternative destination for extra liquidity could be fixed deposits, which currently yield between 6.7-13.0%. Increased placements may, subsequently, force DMBs to proportionately grow lending in order to meet the new LDR requirement. In our view, current term deposit rates may also fall below current levels as yield environment softens and demand for the product increases. This is likely to reduce the funding cost of banks. We, however, note the potential offset from a likely moderation in asset yields.

Corporate bonds and commercial papers are the other investment alternatives in this segment. Investors are expected to demand a spread that partly reflects the relative illiquid nature of these instrument as well as the risk of the issuer.

Equity Market

The restriction of key corporates, such as PFAs and Insurance companies, from participation in OMO is likely to free up excess investable cash for allocation to assets beyond fixed income alternatives. We, therefore, see legroom for some flows into fundamentally strong equity names as treasury yields moderate.

Our view is also buttressed by the high earnings and dividend yields in the equity market space. For context, while some select names (especially within the tier 1 banking space) boast earnings yield in excess of 30.0%, the yield on the one-year T-bills is at 13.37%. In addition to this, dividend yields are likely to average 9.9% across our select universe, with the tier 1 banking names averaging 10.9%. High dividend yields are likely to attract institutional investors such as PFAs. The potential for capital gains in fundamentally sound counters further enhances the appeal of the equity market.

We also note that a lower yield environment is potentially positive for cash-strapped companies, as cost of financing working capital and capex is likely to moderate. This is likely to positively impact on earnings in subsequent quarters.

Conversely, cash rich companies that earn high finance income will be adversely affected by expected moderation in near-term yields.

Possible Macro Implications

The restriction of local corporates and individuals from participation in OMO is positive for borrowing costs (for corporates and the FGN) as yields are likely to moderate in the near term. The clear delineation of OMO from other money market instruments also allows the CBN to attract FPI's with higher rates (for currency management) at a lower cost as the OMO sales are likely to reduce with the restriction placed on domestic non-bank investors.

The segregation of OMO from the local fixed income market substantially reduces the influence of foreign portfolio flows on local yield environment, which have in recent past led to pro-cyclical monetary policy.

The directive and others (including CBN's new policy allowing banks to recoup payments by debiting the account of loan defaulters) is positive for credit creation.

We see scope for slight increase in dollar demand pressures as locals may increasingly source FX in a bid to latch on to the likely higher rates at the primary and secondary OMO markets by disguising as foreign investors.

Agbalowomeri:


Lol make una calm down
We will get there slowly

o boy, no one ever got to a destination by moving backwards

ZOOMING IN ON THE NEWLY PROPOSED GUIDELINE FROM THE SEC...

The acting Director-General of the SEC, Mrs Mary Uduk, recently disclosed that dividends not claimed by shareholders within fifteen months would henceforth be returned to the paying companies.

I believe its a GREAT move !! Though coming a bit too late, but like they say, better late than never.
This analysis is aimed at looking at the worries, possible implications(pros on winners and cons to losers), and of course the way forward(advisory guide) with the proposed gudeline.

1st off, the move will encourage investors to massively embrace the e-dividend course as a way of ensuring quick collection of accumulated dividend.
Secondly, the move should help spur earnings from stronger liquidity boost with payment companies when monies are returned back to them following non-distributions.(expiry thereof)

To illustrate;

Assuming a company has an outstanding unclaimed dividend to the tune of N10B, and @ the same time, has short term liability of N5B and a long term liability of N20B in its debt portfolio, then of course u'd expect that those debt should incure interest expense(servicing) which eats into the coys earnings margin.
Now assuming(with this new SEC guideline) the company takes back its N10B unclaimed dividends and uses same to offset its short term debt obligation and maybe pay down some(c. 25%) of its long term position... then quite naturally, u'll expect that the burden from interest expense should trickle down. What would've been used to service the said debt(possibly as high as N1B, assuming a 10% interest accrual) can now be plauged back into the company for more return. Those cost savings can help EFFICIENT companies avoid the risk that comes with funding mismatches and better manage their laverage position.
...and also assist the coys earnings drive and growth trajectory, while supporting profitability and efficiency variants like RoIC, EM, ROAE, ROAA and AsY, which translates to a big plus for all shareholders/stakeholders.
So it makes sense to see this as a move by the SEC to re-invest the money that u left without having it 'work' for u for 15 months !!
Dont forget that VALUE drainers like inflation and interest rate would be feeding fat on the idle fund, so it's best to look to put it to good use.

Bottom line: It's a WIN-WIN situation for all stakeholders(shareholders, companies etc) if implemented !!

My advise:

I will however recommend that the SEC puts good measures and modalities in place to ensure quick compliance with the remittance of outstanding dividends by registrar bodies following declarations. ...and possibly enforce strict penalties on defaulters going forward.
It will also pay off to broaden the reach and increase the pace with enlightening the investing public on the needs and benefits of enrolling for e-dividends.

Hint line:

This move if implemented will favour the coys involved, but might be a great disvalue to certain class of coys.
Specifically, BANKS should suffer a slight drop in interest income as the additional liquidity that might come from implementing this guideline could see more companies lower their chase for funding. ...particularly with the lowering rate enviroment and decelerating purchasing power from increasing inflation.
Aside certain blue-chip coys, Banks(among the biggest benefactors of the new guideline given the sectors highly inclined dividend yield) will likely come under a little more pressure with the CBNs recent guide on LDR(now @ circa 65%) as they look to push out the excess liquidity pool available to them.
Worthy of mention is the other guidelines from the CBN, including but not limited to that on SDF, FIXED INCOME PLAY(OMO and T-BILL restrictions), which should even add to the pressure.
This will likely force a moderation in interest rate as more monies look for better returns with outflows to the real sector over time.
I expect them BANKS to manoeuvre their way around this though.
In one of my past article, I highlighted that banks that have put in place some HEDGE MECHANISM to support higher interests income against expense should feel less heat.
On that note, I like ACCESS, FCMB, UBA, ZENITH, FIDELITY and GTB in that order, giving their current mkt prices.
...I still maintain that stand !!

I believe the biggest winners from this move(if fully implemented) will be coys in the consumer(fmcgs), industrial and manufacturing goods sectors as expense margin from finance cost, capex etc takes a breather from a more favourable rate environment.

Contrarily, the small losers should be coys who this guideline might 'take away' from.
On that note, I will be a little concerned if I hold a stake in AFPRUD and UCAP. ...particularly the former.
Though I see a small headroom for VALUE in them, given their current mkt price(risk-return in view of recent financial print), I'll prefer to be cautiously optimistic going forward.

CAVEAT: NOT to be infered to as any sought of recommendation. ...when in doubt, pls do well to seek the services of a reputable investment adviser for guidance.
My advise? ...Pls follow ur instinct.

mendes911:


That junction was based on Q2 ooooo. With Q3 result, CP fit don adjust junction go ₦7.

Abeg how much did Diego pay for these shares again? Na ₦155 right?

correct

can some one confirm ACCESS O/S pls

i have 35,545,226 but they keep using 32,210,461

this increase the EPS from 2.52 to 2.78

treasury shares not up to 3.3b

same thing happen last Q.

somebody pls break it down to my level to avoid keeping wrong O/S on my bedsheet

Bloomberg also puts the os at 35.5b

currentprice:
can some one confirm ACCESS O/S pls

i have 35,545,226 but they keep using 32,210,461

this increase the EPS from 2.52 to 2.78

treasury shares not up to 3.3b

same thing happen last Q.

somebody pls break it down to my level to avoid keeping wrong O/S on my bedsheet

It should be the one in bold my dear.
I think the mix up may likely be the result of the recent merger with DIAMOND bank and the 2 for 7 script distribution that came with it.
To be on the safer side, I'll advise u work with the figure in bold, until there's more clarity. I also did the same.

Cheers.

Unclaimed dividend when returned back to the paying company is expected to be put in a separate interest yielding account and will not be allowed for the usual operations of the company.

onegentleguy:
ZOOMING IN ON THE PROPOSED GUIDELINE FROM THE SEC...

.

Yet another acquisition by ACCESS BANK !!
...It's time to zoom in on this TRANSNATIONAL BANK Kenya to see how this aquisation benefits the shareholders/stakeholders in ACCESS.
I believe that ACCESS will go places though. There's something about...

rebekah2011:
Unclaimed dividend when returned back to the paying company is expected to be put in a separate interest yielding account and will not be allowed for the usual operations of the company.

Not in this case my dear !!
...even the SEC DG agree following her statements confirming the proposed guideline.

It is well.

CCNN faithfuls, I hear Q3 after tax profit is up 118.5%.
What's cooking?

onegentleguy:


It should be the one in bold my dear.
I think the mix up may likely be the result of the recent merger with DIAMOND bank and the 2 for 7 script distribution that came with it.
To be on the safer side, I'll advise u work with the figure in bold, until there's more clarity. I also did the same.

Cheers.

35,545,226 is what i have been using. according to their report released it was 35,545,226 also

but 2.79 EPS was reported. they use 32,21,0461 as O/S which make the eps look higher against 2.52 if they use the 35b

^
^^
the reason i use to rank UBA above ACcess was d above concern.

eps reported after merger use to be over stated though they might say it cos of treasury share bla bla but why using the whole 35b as equity capital

OakPearl:
CCNN faithfuls, I hear Q3 after tax profit is up 118.5%.
What's cooking?

Look very well o if you are interested....
Yes PAT improves and so is OS.....
With increase in PAT, there is still a big reduction in eps which makes the stock expensive at current price...

currentprice:
^
^^
the reason i use to rank UBA above ACcess was d above concern.

eps reported after merger use to be over stated though they might say it cos of treasury share bla bla but why using the whole 35b as equity capital

I understand ur concern, but don't use only that to adjudge matters.
Like I've said in times past, its ALWAYS best to use a combination of several KEY fundamental variants to better guage VALUE !!
When u do that, u'll see that ACCESS rates slightly better than UBA.
There is a reason why the former has a better ACCRUALS RATIO than the latter.

Both coys are a strong BUY though.

pluto09:



Look very well o if you are interested....
Yes PAT improves and so is OS.....
With increase in PAT, there is still a big reduction in eps which makes the stock expensive at current price...

U get sense well well !!

Imagine if just the thing about the outstanding PAT MARGIN is used to adjudge matters... then anyone can conclude that CCNN is a GREAT BUY !!
THIS is why I've said that a combination of a broader KEY fundamental variant is absolutely necessary to BETTER GUAGE VALUE !!

Regards.

The Federal government has just announced a hold/suspension to further external borrowing.

https://nairametrics.com/2019/10/26/nigeria-makes-sudden-u-turn-suspends-external-borrowing-from-international-market/

What I think;

This could be a wider term plan to better manage the monetary rate environment and curb down the current strain on the country's reserve.
I see an ease with pressure on the local currency as more fx funds chase naira assets following the suspension to borrow externally.

This was expected, given the recent bouts of policies from the fiscal and monetary policy space.
Expectedly, the drive and hunger for revenue boost, though still very much in place, may have abated.
I am also thinking that this move may have come from the guidance of the newly instituted Economic advisory committee(ECA)

Again, I see this as another PLUS for the banks !!

Another bit of a good move !!

onegentleguy:


I understand ur concern, but don't use only that to adjudge matters.
Like I've said in times past, its ALWAYS best to use a combination of several KEY fundamental variants to better guage VALUE !!
When u do that, u'll see that ACCESS rates slightly better than UBA.
There is a reason why the former has a better ACCRUALS RATIO than the latter.

Both coys are a strong BUY though.

not using only eps to form my opinion bro. but O/S included in all my analysis in arriving at my opinion so wrong O/S will not do good to my analysis

currentprice:


not using only eps to form my opinion bro. but O/S included in all my analysis in arriving at my opinion so wrong O/S will not do good to my analysis

That's cool then !!

I EXPECT NEXT WEEK TO BE A BIG WEEK FOR DANGOTE CEMENT. THIS IS WHAT I SEE ON MY CRYSTAL BALL, I HOPE I AM RIGHT!!!

Not a recommendation, just thinking out loud.

onegentleguy:


That's cool then !!

yes brov

my opinion is not solely based on eps and pe as u always mention. thatz not so. i can tell u before i arrive at my FP or rate any compay i use more than 15 KEY fundamental variants to form my opinion plus seeking opinion from d bosses ^{but not that good in expressing d opinion with a long post sha}

currentprice:

yes brov

my opinion is not solely based on eps and pe as u always mention. thatz not so. i can tell u before i arrive at my FP or rate any compay i use more than 15 KEY fundamental variants to form my opinion plus seeking opinion from d bosses ^{but not that good in expressing d opinion with a long post sha}

...with due respect, that part in bold is tantamount to throwing a heavy stone.

But it is well !!

onegentleguy:


...with due respect, that part in bold is tantamount to throwing a heavy stone.

But it is well !!

na joke o

it is well

UBA roe, bv, peg , solvency ratio among others even better than that of ACcess

in my own opinion UBA is still hav d better numbers base on Q3

UBA FP 22.5
Access fp 24.9

let wait for their final Audit report

fingers crossed

onegentleguy:


I understand ur concern, but don't use only that to adjudge matters.
Like I've said in times past, its ALWAYS best to use a combination of several KEY fundamental variants to better guage VALUE !!
When u do that, u'll see that ACCESS rates slightly better than UBA.
There is a reason why the former has a better ACCRUALS RATIO than the latter.

Both coys are a strong BUY though.

currentprice:
UBA roe, bv, peg , solvency ratio among others even better than that of ACcess

in my own opinion UBA is still hav d better numbers base on Q3

UBA FP 22.5
Access fp 24.9

let wait for their final Audit report

fingers crossed

But ur FVE for both coys says it all !!
U can relate that to the part in bold from my revert above.
That said, I still see a higher headroom for VALUE in ACCESS than UBA going into YE.

We will see how things will eventually pan out.

Cheers.

onegentleguy:



But ur FVE for both coys says it all !!
U can relate that to the part in bold from my revert above.
That said, I still see a higher headroom for VALUE in ACCESS than UBA going into YE.

We will see how things will eventually pan out.

Cheers.

with access merger as bigger bank. buying UBA at curent mkt price of 5.85 will still give more % gain than Access at 7.3 should both move to their respective fp

the more Access move up in price the more potential uba buyer below N6 should be happy. nothing do d stock

access must break that chain next week!see jollof rice ooo

currentprice:
UBA roe, bv, peg , solvency ratio among others even better than that of ACcess

in my own opinion UBA is still hav d better numbers base on Q3

UBA FP 22.5
Access fp 24.9

let wait for their final Audit report

fingers crossed

Finally....to financial information emanating from companies I will apply my "Believability Index" developed for each company

Access Bank "BI" - 63.7%
UBA "BI" - 72.4%