Stats: 3,243,112 members, 8,123,585 topics. Date: Thursday, 03 April 2025 at 08:46 AM |
Nairaland Forum / Gloriousdawn's Profile / Gloriousdawn's Posts
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According to IAS 21, companies are required to revalue their foreign liabilities at the end of each reporting period. This requirement has posed a significant financial burden on many Nigerian companies due to exchange losses resulting from the depreciation of the Naira. Several major organizations, including PZ, MTN Nigeria (MTNN), and Cadbury, have reported substantial losses directly linked to the revaluation of their foreign currency obligations. However, this trend may soon reverse. If the current appreciation of the Naira against the US Dollar continues through March 2025, companies with significant foreign liabilities are likely to record exchange gains. This shift could lead to a substantial boost in profitability for these companies. Take MTNN, for example: In Q1 2024, MTNN posted an exchange loss of ₦656 billion, which severely impacted its financial performance. Without this exchange loss, the company would have reported a profit before tax (PBT) exceeding ₦80 billion. As companies prepare to submit their Q1 2025 financial reports—expected by April 2025—exchange losses are anticipated to reduce significantly or even disappear altogether. This will likely result in stronger financial performance compared to the same period last year. Key Factors Driving Improved Q1 2025 Financial Reports: Exchange Gains: The Naira's recent appreciation against the US Dollar could transform exchange losses into exchange gains, improving profitability. Price Increases: Many companies have raised product prices to offset rising input costs, boosting revenue. Liability Restructuring: Some companies are converting foreign loans into equity to mitigate future foreign exchange risks. Import Substitution: Increased focus on backward integration reduces reliance on imported raw materials, insulating firms from currency volatility. Market Implications: Improved financial performance is likely to drive up stock prices, especially for companies previously penalized by the market due to poor results in 2023 and 2024. This presents an opportunity for investors to identify and invest in companies with a high probability of returning to profitability in Q1 2025. Smart investors should: Identify companies whose stock prices declined due to exchange losses. Evaluate the likelihood of a return to profitability based on current market conditions. Time their investments carefully, ahead of Q1 financial disclosures in April 2025. This period presents a strategic window to capitalize on market recovery as companies report stronger financial outcomes driven by a more favorable currency environment. 7 Likes 1 Share |
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If past trends are any indication, I anticipate notable price volatility in banking stocks and industrial goods as the year-end approaches. Additionally, this year, stocks in the downstream petroleum sector may also experience significant movement. |
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Expect heightened volatility in stock prices as the year-end approaches, driven by increased trading activity. This may include portfolio rebalancing, tax-related strategies, and attempts to influence year-end valuations. Be aware of potential artificial price movements on the final trading day, as some market participants may seek to optimize performance metrics. Position yourself strategically to capitalize on these expected fluctuations while managing risks effectively. 3 Likes 1 Share |
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Mpeace: Likely on suspension for the anticipated share reconstruction. |
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Wapco need to grow up in price, the valuation for Buacement is double that of Wapco. Only that Buacement is more efficient than Wapco, however, Buacement is having too much Receivables. |
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lexy2lexy: |
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DeRuggedProf: I am finding it difficult to calculate how Wapco move from a profit of over N17b to a negative operating cashflow. I will appreciate any help, my figures are not adding up. |
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sonofElElyon: The current price now of N114.95 have priced in the bonus share, that is starting from yesterday close of N104.50. However, we do not what dividend the board will recommend. Also note that, today price is a reflection of future earnings. |
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samguru: Presco to issue a bonus share of one new share for every ten share. This is according to their Authorised Share Capital of N550,000,000.00. They have issued N500,000,000.00, remaining N50,000,000.00 (Unissued). Which translate to a bonus share of 100,000,000 units. |
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Hello Guys, How did Guinness turn the table around? |
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If a company Returns on Invested Capital (ROIC) is not greater than the company Weighted Average Cost of Capital (WACC), such a company is a value destroyer. |
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locodemy: I am not expecting much in June. Unless for defensive stocks, I expect to see some pullback in June. Just my opinion, not a recommendation. 1 Like |
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yMcy56: For me, I do not like confusion, I have sold the small unit I have with small profit. We move.... 3 Likes |
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Most stock still trading under the 20 days and 50 days moving average. I just feel it is not the right time to start accumulating, remember 2018. This opinion may not apply to a few stock. 2 Likes |
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Too much risk in Nigeria, insecurity, killings every day, kidnapping everywhere, govt. policy reversals etc. It will only take the brave to invest in Nigeria. I invest in Nigeria stock if there is a very good bargain that can compensate for the risk. Sorry to say, insecurity is the outlook of Nigeria for now unless things change. PharmAlfred: 1 Like |
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4tunebest: In my opinion, I will say let wait and see their report, then we can analyse the effect of Covid-19 on their business. We will then relate the outlook of Covid-19 to NAHCO future (short to mid term) business. |
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Lets not forget dividend of N16,107,798,000.00 for FY19 is yet to leave Wapco books and the over N45 billion short term loan as at June 2020 ending. I think the above will limit Wapco ability to pay good dividend for FY20. Beside the above, I think Wapco is set to go far. currentprice: |
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The market is already pricing in Zenith bank proposed dividend. In my opinion, we may not see much price appreciation after they drop the half year report. 1 Like |
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DexterousOne: You only jijo in a stock moving down with determination. |
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DexterousOne: I can't wait, I benefited from most recent price rebound, I bought @ N17 and sold @ N20. I am patiently waiting for another opportunity. 1 Like |
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Guiness is looking for opportunity to a minor rebound in price before continuing the much desired down trend. |
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rebekah2011: http://www.nse.com.ng/Financial_NewsDocs/29891_U_A_C_N__OF_NIGERIA_PLC._FINANCIAL_STATEMENTS_MAY_2020.pdf |
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I may be wrong, but I can not ignore this amount of cash that UACN is sitting on. N6.75 cash per share, Q1 2020 report for a N7 per share stock. Another Dangote Flour in the making. 2 Likes 1 Share |
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megawealth01: Do not allow any company turn you into an ATM mechine, always collecting money from you, and giving you nothing in return. My opinion. |
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Technical analysis suggests a likely pullback in Caverton if FY 2019 result is delay further. RSI is neutral while MACD is surging higher. |
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Let's watch Zenith bank space, the engulfing candle today was too massive, happening at the upper limit of Bollinger Bands with above average volume. I noticed the likely reversal two days ago, I suspect a pullback. 2 Likes |
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NSE ASI and NSE Banking is yet to show any price rejection at present bottom. Just watching to see any significant price rejection/other price reversal candle to confirm the divergence. 2 Likes |
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locodemy: RSI and MACD (NSEASI) is showing positive divergence on a daily timeframe. I will prefer a divergence on a weekly timeframe, becos it is more reliable. 3 Likes |
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currentprice: Everything is going south, one direction, stocks & commodities. Even Gold is following them, everyone want to hold cash. It only shows the amount of panic and fear out there. We go dey alright las las. 1 Like |
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I fear non-performing loan in banks book this year will increase. The above fear may limit banks in meeting their profit target for 2020. In my opinion, discounting year 2019 profit for the banks when projecting 2020 profit will be more realistic. |
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Uchetoba: Do they have the Cashflow (Free) to support N5 dividend? |
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