Stats: 3,176,425 members, 7,897,865 topics. Date: Monday, 22 July 2024 at 09:17 PM |
Nairaland Forum / BabsO2's Profile / BabsO2's Posts
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Mpeace: 50% Tax on 2023 Bank Forex Gains I am still surprised at the whole thing. A bank that has foreign instruments in dollars, mostly in subsidiaries outside Nigeria plus some dollar assets on loan to Nigerian companies like Dangote Refinery. Is the government saying they should sell some of those assets to generate cash for tax?. Those of their foreign subsidiaries or those of the main Nigerian subsidiary in order to create cash to give government. Sounds senseless. Perhaps it's un-invested liquid assets of the banks that will be grabbed for calculating the tax. To me it's like calling Dangote to come and pay forex gain tax on his refinery because the refinery cost $18b which translates to Naira 9T in 2023 Q1 but became N18T in 2024Q4 with a notional FX gain of N9T now to be taxed at 50%. More clarity needed as some greedy politicians must be mistaking the FX gains of banks as raw cash. They may push the banks to find it more attractive to declare FX losses which will be very very bad for the already weak economy. |
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Mpeace: Those fx gains are not cash flow. They are FX assets that have a translational gain in Naira. Those fx financial assets may even be tied more to foreign subsidiaries of these banks. To monitize it into naira will even require selling of the financial assets. 1 Like |
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leparj: The dilution of 1 to 2 is huge. This will weigh access future share price growth down ![]() |
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SonofElElyonRet: Access Rights currently have no mark up above market price, hence are not sellable. 3 Likes |
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https://www.investing.com/news/stock-market-news/us-stock-futures-edge-lower-with-cpi-data-set-to-offer-more-rate-cues-3514786 https://www.investing.com/news/stock-market-news/tesla-tumbles-on-report-it-will-delay-robotaxi-unveiling-uber-lyft-rise-3516022 With these news, I wonder how much the magnificent 7 with very high PE's will be fairing with prices that currently have future growth already booked in. It's a little annoying Nigerian banks are currently being forced to do a capital raise when current prices are a giveway. The capital raising will only dilute the future growth of Nigerian bank shares especially for those raising funds at very low PE's. 1 Like |
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SonofElElyonRet: Not looking at bragging rights but issues I see as fundamental. Top most of which is any capital raising activity be it rights or public offer, will lead to reduction of rate of returns to shareholders. As the capital raising is taking place at a time the shares are selling at huge discounts to book value. Even at that Access has an argument in that it will do only a rights issue, which in a way protects current shareholders that can take up their rights. But this line of thought is flawed for small shareholdings, as this can be picked up on the floor at even cheaper rates. Only the fat cats will need the rights offer to achieve taking up quantities that match their FAT holdings. I am taking up my Fidelity rights issue by selling in market to buy the rights. The fat cats will have their way in Access and perhaps GTCO in maintaining proportions of their share holding. 1 Like |
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https://nairametrics.com/2024/07/10/access-holdings-explains-why-its-issued-shares-price-is-higher-than-market-price/#google_vignette I think ACCESS is only offering rights. That's why Aig mentioned they don't want dilution but will offer the goodies as reward for loyal (BIG) existing shareholders. It makes sense as the shares are indeed over under priced looking at these numbers quoted in the link. Using the offer price of N19.75, the price-to-earnings (P/E) ratio of 1.15 for the issued share is notably lower compared to its industry peers. For instance, FBNH shares have a P/E ratio of 2.62, GTCO shares are at 2.36, UBA shares stand at 1.32, and Zenith Bank shares are at 1.74. This disparity suggests that Access Bank shares trading in the market with a 1.12 P/E ratio may be significantly undervalued. There is a high likelihood all these big banks will continue to rally in price this year and in the coming years also. |
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Oando is recruiting. Seen several adverts in the past. And then this current one.
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mikeapollo: That is not a small volume. The Oando bull cleared all the Oando bears (nay sayers & profit takers) that were creating a resistance in the N16 range, shattering their resistance. Leaping in full & perfect 10% throttle from N15.5 to N17. ![]() Let's see what next week brings. Will more bears come out ? Will the bull lose strength ? 1 Like |
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Streetinvestor2: Perhaps some TA traders will start dumping at that price leading to the so called resistant as panic sets in unless strong bulls blast through that resistance. A blast through is okay on the Oando journey of higher highs and higher lows. N16 will then be the new low point. |
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mikeapollo: I am waiting at N11 junction to offer a support or is it resistant ![]() |
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SonofElElyonRet: That is OANDO is an investment (or is it gamble) with a guaranteed low and a probable huge upside ![]() ![]() 1 Like |
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megawealth01: Became sure gamble with buy out offer joor. Without na pure gamble. |
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SonofElElyonRet: Buying at N5.50 is a gamble if bought before the N7.07 buy out offer |
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sky2891: This company is ready for business ![]() |
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Mankind2024: These PE's are scarily high. Any slippage in anticipated growth due to the so called 5th industrial revolution and there will be major price correction. 39 Microsoft Corp. (MSFT) 55 Amazon.com Inc. (AMZN): 34 Apple (AAPL): 29 Meta Platforms (formerly Facebook) (META) 71 NVIDIA (NVDA): 28 Alphabet (GOOGL) 53 Tesla (TSLA): 5 Likes 1 Share |
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Mankind2024: Had to look up who these magnificent 7 are Microsoft Corp. (MSFT) Amazon.com Inc. (AMZN): Apple (AAPL): Meta Platforms (formerly Facebook) (FB) NVIDIA (NVDA): Alphabet (GOOGL) Tesla (TSLA): They all look heavily overpriced inside a bubble right now ![]() Any small correction, those buying now can lose so much money. 12 Likes |
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Tony has done very well in the last 10 years ![]() ![]() ![]() I came to the same thought on UBA also that it likely invests in the TE ecosystem. That UBA will likely not have high levels of impairment costs compared to other banks going forward. I was not surprised a couple of years back when a couple of international Nigerian banks were impacted by Ghana credit issues with impairment costs and UBA was not impacted. As UBA had a better funnel to put funds to work in TE ecosystem. Mankind2024: 2 Likes |
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mikeapollo: You wrote earlier that OANDO used to pay relatively good dividends before the upstream acquisitions. After the acquisitions things got really rough. Likely due to over-payment for the assets and the down turn in the oil industry immediately after the acquisition. Hence there is antecedent that Wale led management pays dividends when the company makes money. On the delisting issue. There is a possibility this was triggered by the power tussle to over throw Wale led management and the imposition of a new management by SEC to replace the Wale led one. Now that that tussle is over and Wale in the last AGM stated clearly that they had to pay off some shareholders, I guess the FAT troubling shareholders are already out. But since the delisting card was already started and the bus already left the station before the FAT shareholder was paid off to exit peacefully, the bus will continue in motion till it comes to a stop. Wale said delisting may happen and it may not happen. Wale said paying dividends is not an issue once the turnaround goes smoothly with distributable incomes. That this should not be an issue since they earn in $$$$$$s |
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bovali: Please don't leave that conversation for another day. We want to know now now. As some of us are Bullish on Oando becoming a beautiful turnaround story not only for Wale but for we common shareholders also ![]() ![]() ![]() |
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bovali: On Access. I am not bullish or bearish on their expansion but neutral. I am just pointing out where one should watch closely as a fundamental investor. Watch their subsidiaries closely for profits. If one can be ahead of the market with insight of key impactful subsidiaries doing excellently one can buy bullishly ahead of the local market. Afterall as you highlighted they got some, at deep discount. Perhaps that's why they got bullish and took additional USD at higher interest rate to close out the deal. And I guess over the years they locked in some NGN into USD to purchase these assets at lower exchange rates. I guess the assets we need to watch closely are in the picture below. I am however bullish on OANDO. And will start buying more (small small) once the price falls below N11. I will like to know that thing on OANDO that you have. Please share as I am bullish on OANDO ![]() ![]() ![]()
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nosa2: A summary of the additional tier 1 USD capital is in their last annual report on Page 204. Total is USD 800m. The older instrument has an interest rate of 5.25% and the newer one has an interest of 15%. See picture below. I guess these USD capital raised as well as NGN shareholder funds converted to USD at lower rates in years back must have been used to fund their African expansion. If the expansion goes well Access will do well. 3 Likes 1 Share
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Picky1: Access has also been growing on the back of additional Tier 1 capital raised in USD to fund it's aggressive African expansion. If the expansion falters shareholders will pay for it using NGN. If the expansion succeeds the USD Tier 1 capital instrument holders will get the bulk of profits through coupon payments on the USD instrument. That means NGN shareholders have a big exposure to potential FX costs and losses if the African expansion falters, while having a probable upside should the African expansion generate returns above the coupon payments for the Tier 1 Capital instrument holders. Going forward - One needs to monitor the contributions of the African expansion - if it is far above the cost of funds used to procure the expansion. If it isn't, the share price will not appreciate much. 7 Likes 1 Share |
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bovali: It simply means book value is less than 1. Nearly all the banks have a book value less than 1. Many insurance companies too. 2 Likes |
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debeey87: Waiting to see the rights prospectus too, with the projections of the financial statements. Has any projections been issued? 1 Like 1 Share |
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Mpeace: That will be nice if it sails through. |
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mikeapollo: Or its the trading on JSE reopening today that is causing the pull back (likely not, just a coincidence). Or perhaps there are big/small funds fed up with OANDO management and determined to exit at different price points like N12, N13, N16, N20, N50 etc. And those with shaky/moving price targets. They create the supply volumes that come up when new bullish funds push past these prices. Till results are all green, this back and forth should be expected. |
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megawealth01: Make him no wane quick o. New high needed above N20 before any pull back joor. 2 Likes |
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Princkez: Stress of current strike - Power outage, running generators, long queues for fuel. 2 Likes |
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Mpeace: That's where shareholders can get heavily fleeced by the oga's running the show. 1 Like |
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