Agbalowomeri:
Waiting for Zenith bank at 10
Una grammar nor concern me😂

Oga Agba, this wait go long oo. That's if it's not a "wild goose wait".

😆

emmaodet:


Madam Mercy, please how do you identify a cross deal

As a layman, the best way to identify cross deal for example is:

If you are using morgan itrade platform, You check the total offer of a company and you see 10 million units, while Bids amounts to 7 million units. Then from nowhere you start to see deals of 24 million units, 30 million units etc taking place that were not placed on the offer/bid board of that same company and also without any of the current offer/bids being touched, that is surely cross deals

chillykelly86:


Bro, believe whatever suits you. I no get strength for this back and forth.

You no get strength abi, I dey my dey, you begin engage me. Just say na run you won run.

chillykelly86:


Oga Agba, this wait go long oo. That's if it's not a "wild goose wait".

😆

Zenith fit touch 25 sef. You never see anything.

I did a quick back-of-the-envelope analysis based on worse-case scenarios:

In 2023, Zenith made a Profit After Tax (PAT) of 679 billion Naira at 21.5 Earnings Per Share (EPS), with an outstanding share count (OS) of 31 billion.

Checking the 2023 statement of profit and loss on page 40, I found these lines questionable: "Trading gains" at 566.9 billion Naira and "Other operating income" at 242.5 billion Naira, both explained in more detail in Notes 10 and 11 respectively. These two lines have significantly increased from the 2022 figures, and they are both tied to the Naira devaluation. As a result, I can reasonably assume that the 2024 figures may not be as high if the Naira retraces or maintains its current stability.

So, I have discounted for the 2024 figures, and if all goes well, I estimate the 2024 PAT to be around 379 billion Naira. (Note that "Interest and similar income" more than doubled from the previous year, but I have chosen to leave it as is, as I expect the reversion to the mean to be canceled out by growth.)

If the additional OS reaches 12 billion (which I believe will be needed to raise an additional 300 billion Naira at 25 Naira per share), then the 2024 EPS would drop to 8.6. If they add 25 billion new shares instead, the EPS would drop to 6.6. If they do nothing, I expect the EPS to settle at 12.

In conclusion, in all scenarios, and with things going normally, they should be able to maintain the 4 Naira dividend (4.5 to 5 Naira is even more possible), irrespective of the number of additional shares added.

My concern is what will happen in the meantime - will the share price reach 25 Naira? If so, would it be better to exit the investment and re-enter at a better time, even if it means forgoing the 4 Naira dividend?

Oga Agba, I need your input.

ositadima1:
I did a quick back-of-the-envelope analysis based on worse-case scenarios:

In 2023, Zenith made a Profit After Tax (PAT) of 679 billion Naira at 21.5 Earnings Per Share (EPS), with an outstanding share count (OS) of 31 billion.

Checking the 2023 statement of profit and loss on page 40, I found these lines questionable: "Trading gains" at 566.9 billion Naira and "Other operating income" at 242.5 billion Naira, both explained in more detail in Notes 10 and 11 respectively. These two lines have significantly increased from the 2022 figures, and they are both tied to the Naira devaluation. As a result, I can reasonably assume that the 2024 figures may not be as high if the Naira retraces or maintains its current stability.

So, I have discounted for the 2024 figures, and if all goes well, I estimate the 2024 PAT to be around 379 billion Naira. (Note that "Interest and similar income" more than doubled from the previous year, but I have chosen to leave it as is, as I expect the reversion to the mean to be canceled out by growth.)

If the additional OS reaches 12 billion (which I believe will be needed to raise an additional 300 billion Naira at 25 Naira per share), then the 2024 EPS would drop to 8.6. If they add 25 billion new shares instead, the EPS would drop to 6.6. If they do nothing, I expect the EPS to settle at 12.

In conclusion, in all scenarios, and with things going normally, they should be able to maintain the 4 Naira dividend (4.5 to 5 Naira is even more possible), irrespective of the number of additional shares added.

My concern is what will happen in the meantime - will the share price reach 25 Naira? If so, would it be better to exit the investment and re-enter at a better time, even if it means forgoing the 4 Naira dividend?

Oga Agba, I need your input.

Me wey garri dey disturb my eyes
On a more serious note IF NA ME, I don sell go wait for November 😂

ositadima1:
I did a quick back-of-the-envelope analysis based on worse-case scenarios:

In 2023, Zenith made a Profit After Tax (PAT) of 679 billion Naira at 21.5 Earnings Per Share (EPS), with an outstanding share count (OS) of 31 billion.

Checking the 2023 statement of profit and loss on page 40, I found these lines questionable: "Trading gains" at 566.9 billion Naira and "Other operating income" at 242.5 billion Naira, both explained in more detail in Notes 10 and 11 respectively. These two lines have significantly increased from the 2022 figures, and they are both tied to the Naira devaluation. As a result, I can reasonably assume that the 2024 figures may not be as high if the Naira retraces or maintains its current stability.

So, I have discounted for the 2024 figures, and if all goes well, I estimate the 2024 PAT to be around 379 billion Naira. (Note that "Interest and similar income" more than doubled from the previous year, but I have chosen to leave it as is, as I expect the reversion to the mean to be canceled out by growth.)

If the additional OS reaches 12 billion (which I believe will be needed to raise an additional 300 billion Naira at 25 Naira per share), then the 2024 EPS would drop to 8.6. If they add 25 billion new shares instead, the EPS would drop to 6.6. If they do nothing, I expect the EPS to settle at 12.

In conclusion, in all scenarios, and with things going normally, they should be able to maintain the 4 Naira dividend (4.5 to 5 Naira is even more possible), irrespective of the number of additional shares added.

My concern is what will happen in the meantime - will the share price reach 25 Naira? If so, would it be better to exit the investment and re-enter at a better time, even if it means forgoing the 4 Naira dividend?

Oga Agba, I need your input.

I may differ in this argument. Treasury bill at 22% and interest on loan at N35. Remember that the foreign exchange revaluation that you said is above N500 billion has been sent on money errands at least N100 billion will be received as return if all of it is sent on errands to Treasury bill. Then the other 2 trillion as reserve will be in loans and others investment vehicles. I think the banks know how to maintain their position. Also know that the revaluation was done at the rate of slightly below N1000. I don't expect Naira to go below N900 this year. So in terms of foreign exchange revaluation they may be no difference.
Concerning exiting the market now I think it is too early to jump out. My reasons are that the banks will try to pump their price before coming out to the market. Have you not been seeing volume of trade? After the initial pumping you will see consolidation than movement of price and then announcement of offer price. I will advise you jump out during the offer activity in the market because there will not be any interest in the stock then. You can then reenter the market after listing of the offer in the market because supply will be more than demand and price will crash. This is my 10 Kobo advice.
Still know you are the manager of your portfolio.

chipa:

I may differ in this argument. Treasury bill at 22% and interest on loan at N35. Remember that the foreign exchange revaluation that you said is above N500 billion has been sent on money errands at least N100 billion will be received as return if all of it is sent on errands to Treasury bill. Then the other 2 trillion as reserve will be in loans and others investment vehicles. I think the banks know how to maintain their position. Also know that the revaluation was done at the rate of slightly below N1000. I don't expect Naira to go below N900 this year. So in terms of foreign exchange revaluation they may be no difference.


Concerning exiting the market now I think it is too early to jump out. My reasons are that the banks will try to pump their price before coming out to the market. Have you not been seeing volume of trade? After the initial pumping you will see consolidation than movement of price and then announcement of offer price. I will advise you jump out during the offer activity in the market because there will not be any interest in the stock then. You can then reenter the market after listing of the offer in the market because supply will be more than demand and price will crash. This is my 10 Kobo advice.
Still know you are the manager of your portfolio.

The second part of your post is interesting. Though I don't understand the meaning of "pumping" yet, it is often mentioned here.

As for the first part, I have already considered that the trading gains and other operating income may be used to generate income. That is why I only deducted 300 billion from the total 808 billion (566.9 billion in "trading gains" and 242.5 billion in "other operating income".

chipa:

I may differ in this argument. Treasury bill at 22% and interest on loan at N35. Remember that the foreign exchange revaluation that you said is above N500 billion has been sent on money errands at least N100 billion will be received as return if all of it is sent on errands to Treasury bill. Then the other 2 trillion as reserve will be in loans and others investment vehicles. I think the banks know how to maintain their position. Also know that the revaluation was done at the rate of slightly below N1000. I don't expect Naira to go below N900 this year. So in terms of foreign exchange revaluation they may be no difference.
Concerning exiting the market now I think it is too early to jump out. My reasons are that the banks will try to pump their price before coming out to the market. Have you not been seeing volume of trade? After the initial pumping you will see consolidation than movement of price and then announcement of offer price. I will advise you jump out during the offer activity in the market because there will not be any interest in the stock then. You can then reenter the market after listing of the offer in the market because supply will be more than demand and price will crash. This is my 10 Kobo advice.
Still know you are the manager of your portfolio.

you made it sound like we have super banks that do not suffer loss. For your information, all holders of dollars from February this year are at a loss presently.
you also made it sound like the banks have converted all their dollars to naira and are heavily invested in Treasury Bills with those monies.

when you say in terms of forex revaluation, it makes no difference because it was done less than N1000. let me ask you this. if the rate stabilizes like this for the rest of the year, is that a forex gain for the banks? or are you assuming that last year's dollar whose gain had been captured in their books will now be brought into this year and viewed as a revaluation gain again?

me i am just a lay man and i dont understand much but if i may say something, i think the banks will not enjoy what is to happen in the next one year. maybe after that, they will stabilize. i am in alignment with ositadima1

ositadima1:


The second part of your post is interesting. Though I don't understand the meaning of "pumping" yet, it is often mentioned here.

As for the first part, I have already considered that the trading gains and other operating income may be used to generate income. That is why I only deducted 300 billion from the total 808 billion (566.9 billion in "trading gains" and 242.5 billion in "other operating income".

Himm you want to hear something from my mouth. Just know that pumping is synonym of ballooning and same as inflating. Now you understand what I mean.

vacanci:


you made it sound like we have super banks that do not suffer loss. For your information, all holders of dollars from February this year are at a loss presently.
you also made it sound like the banks have converted all their dollars to naira and are heavily invested in Treasury Bills with those monies.

when you say in terms of forex revaluation, it makes no difference because it was done less than N1000. let me ask you this. if the rate stabilizes like this for the rest of the year, is that a forex gain for the banks? or are you assuming that last year's dollar whose gain had been captured in their books will now be brought into this year and viewed as a revaluation gain again?

me i am just a lay man and i dont understand much but if i may say something, i think the banks will not enjoy what is to happen in the next one year. maybe after that, they will stabilize. i am in alignment with ositadima1

The banks are not superman but know that a lot of financial dynamic has occurred in the economy since after the the 31th Dec 2023 and the banks are going to utilize those opportunities to maintain the status. I will like to list some as
(1) The interest rate on loan has increased to upto 600 to 1000 points and still counting.
(2) The rate on Treasury bill has increased to upto 600 points.
(3) The increased in retained earnings has been deployed for service.
(4) The 1st quarter revaluation will be done at N1300 as of 31/03/2024. Which appears to be as the same rate of increase in half Year audited results of 2023 or slightly lower.
I will advise you to wait and see the earnings that will be coming from the banks in 1st quarter financial report.

chipa:

The banks are not superman but know that a lot of financial dynamic has occurred in the economy since after the the 31th Dec 2023 and the banks are going to utilize those opportunities to maintain the status. I will like to list some as
(1) The interest rate on loan has increased to upto 600 to 1000 points and still counting.
(2) The rate on Treasury bill has increased to upto 600 points.
(3) The increased in retained earnings has been deployed for service.
(4) The 1st quarter revaluation will be done at N1300 as of 31/03/2024. Which appears to be as the same rate of increase in half Year audited results of 2023 or slightly lower.
I will advise you to wait and see the earnings that will be coming from the banks in 1st quarter financial report.

So you think the higher the interest rate the better it is for the banks? So if interest rate for example jumps to 50%, you expect business men to go after loans at such rate? What happens to the cry that higher interest rate is hurting businesses. Apart from turning away borrowers, a high rate can amount to many defaults on loans.

You keep mentioning revaluation as if what we have now has not changed to devaluation. Most banks have USD bought at over 1500 too

Anyways when the Q1 report is out, let's see what it is but again let's compare it to previous quarter and not with Q1 2023. That's how we will know what's up

chipa:

The banks are not superman but know that a lot of financial dynamic has occurred in the economy since after the the 31th Dec 2023 and the banks are going to utilize those opportunities to maintain the status. I will like to list some as
(1) The interest rate on loan has increased to upto 600 to 1000 points and still counting.
(2) The rate on Treasury bill has increased to upto 600 points.
(3) The increased in retained earnings has been deployed for service.
(4) The 1st quarter revaluation will be done at N1300 as of 31/03/2024. Which appears to be as the same rate of increase in half Year audited results of 2023 or slightly lower.
I will advise you to wait and see the earnings that will be coming from the banks in 1st quarter financial report.

The revaluations are not done at current market rates like that. But at very conservative rates less than N800.
One can use ETI reports which are published both in NGN and USD to estimate what rates are being used by the banks to compute their translations.

Kwibaba:


I also do not agree that it is common sense that those are the only 2 objectives of the recapitalization. What happened to the plan of 1 trillion economy of the govt? How do they achieve that by staching money away?

I think the capital raise is indeed to support the $1T economy.
Long term investors need to watch the GDP growth of the economy. The kind of growth that occurs will suggest the likely growth in bank incomes. Most likely the quarterly reports of the banks will be released before GDP data. If both align in a growth direction it means the recapitalization of the banks is delivering results. The rate of growth at individual bank level as well as group level will suggest the quality of the growth the banks & government is achieving. Poor growth signals trouble in the horizon.

ositadima1:


You no get strength abi, I dey my dey, you begin engage me. Just say na run you won run.

Make I run my run in peace. As you don carry engineering come. Before you go begin apply Laplace transforms on top the matter, make I shift.

vacanci:


So you think the higher the interest rate the better it is for the banks? So if interest rate for example jumps to 50%, you expect business men to go after loans at such rate? What happens to the cry that higher interest rate is hurting businesses. Apart from turning away borrowers, a high rate can amount to many defaults on loans.

You keep mentioning revaluation as if what we have now has not changed to devaluation. Most banks have USD bought at over 1500 too

Anyways when the Q1 report is out, let's see what it is but again let's compare it to previous quarter and not with Q1 2023. That's how we will know what's up

What do you think is fueling the inflation you are seeing? Partly cost of doing business which have one of its components as the cost of funds (Interest rate). Read the financial report of most of the companies and see how the cost of fund is increasing ( financial expenses).
This will invariably be pushed down to us leading to inflation. The companies that actually need to keep operation going on go for the loans and get it. The companies that can not afford it or can not push it down to anyone stay off and close shop.
My fingers are crossed waiting patiently for 1st quarter financial report.

chillykelly86:


Make I run my run in peace. As you don carry engineering come. Before you go begin apply Laplace transforms on top the matter, make I shift.

chillykelly86:


Make I run my run in peace. As you don carry engineering come. Before you go begin apply Laplace transforms on top the matter, make I shift.

Dropout Engineer don run

kolaish:
As a layman, the best way to identify cross deal for example is:

If you are using morgan itrade platform, You check the total offer of a company and you see 10 million units, while Bids amounts to 7 million units. Then from nowhere you start to see deals of 24 million units, 30 million units etc taking place that were not placed on the offer/bid board of that same company and also without any of the current offer/bids being touched, that is surely cross deals

So its like peer to peer trading? If yes, does it mean those trading parties negotiate their prices outside of the market? Also, how come the market price of the stock isn't affected?

BabsO2:

I think the capital raise is indeed to support the $1T economy.
Long term investors need to watch the GDP growth of the economy. The kind of growth that occurs will suggest the likely growth in bank incomes. Most likely the quarterly reports of the banks will be released before GDP data. If both align in a growth direction it means the recapitalization of the banks is delivering results. The rate of growth at individual bank level as well as group level will suggest the quality of the growth the banks & government is achieving. Poor growth signals trouble in the horizon.

Economy will roar back in coming months - Tinubu

BabsO2:


Economy will roar back in coming months - Tinubu

You go dey believe politicians, Dey play.

But sha I pray the economy recovers. I pray.

Agbalowomeri:


Dropout Engineer don run

BabsO2:


Economy will roar back in coming months - Tinubu

God abeg oo, world war III has been trending since yesterday oo, Iran, Israel and co. Hope they will spare our fragile market?

Eku market ooo

wanaj0:
Eku market ooo

"Oga at the top" it's been a while. You are highly welcome

olujaidi:


So its like peer to peer trading? If yes, does it mean those trading parties negotiate their prices outside of the market? Also, how come the market price of the stock isn't affected?

Most of those cross deals are done at current market price of the stock. However, this is not to discountenance some variations in price due to system/human factor.

Mpeace:
You go dey believe politicians, Dey play.

But sha I pray the economy recovers. I pray.

I just join in prophesying and praying. Many of us want to see the market rising for the rest of the year and coming years sef.
It will be excellent to see the banks and NGX listed companies continue to grow and the $1T economy achieved.

2zona:


God abeg oo, world war III has been trending since yesterday oo, Iran, Israel and co. Hope they will spare our fragile market_?

Amen

wanaj0:
Eku market ooo

Oga, drop one or nuggets from our elders corner as we see you like this

NIGERIA BREWERIES STOPPING OPERATIONS ON SOME PLANTS
https://nairametrics.com/2024/04/12/nigerian-breweries-to-suspend-operations-in-two-of-its-nine-production-plants/

This may not be that fresh. Sorry, I don't read news so much. I am more conversant with the charts.

yok:
NIGERIA BREWERIES STOPPING OPERATIONS ON SOME PLANTS
This may not be that fresh. Sorry, I don't read news so much. I am more conversant with the charts.

Okay. Is old news. My big worry is that this Government and some people did not know what damage this Goverent has done to the economy. In 2 years time we will see the extent of damage. This is a Government many business people do not trust (like one MD of a business, the business is small probably generates turnover in single digit billion Naira range, the person express fear for businesses when we have a tax contractor (Alpha Betta related) as our President. Except something change for the positive from the Government side, so many multinational will exit and many local business may become history. It is already happening with the worsening power situation plus the less power now available now commanding double the tariff rate that was in place before this new hostile Government.

No wonder in our private forum, we observed that no Manufacturing stock is in buy zone these days. Then we just said, the answer is clear, look at the recent results/projections for next few quarters, only a good gambler will buy the manufacturing stocks with confidence or someone is using stolen funds (we know where the bulk of the funds are stollen from, the Government covers of course)

Okay let us see what will happen in the next 2 years? .

Does Morgan capital group do treasury bill