BANKING SECTOR HEAD-n-SHOULDER PRICE PATTERN NOW OBVIOUS
I remember showing on this platform late last year the emergence of head-and-shoulder price pattern on NGX banking sector. With price at major resistance level AND IF this month ended bearish, then there is high possibility to see more banking stocks going further south. However, the cushion effect is that the major index is still showing strength. So, the selling pressure, may probably be temporary.

PLAN YOUR TRADES AND TRADE YOUR PLANS

BullBearMkt:
BANKING SECTOR HEAD-n-SHOULDER PRICE PATTERN NOW OBVIOUS
I remember showing on this platform late last year the emergence of head-and-shoulder price pattern on NGX banking sector. With price at major resistance level AND IF this month ended bearish, then there is high possibility to see more banking stocks going further south. However, the cushion effect is that the major index is still showing strength. So, the selling pressure, may probably be temporary.

PLAN YOUR TRADES AND TRADE YOUR PLANS

Results should be coming in anytime from next week and if results does not help the banking sector then to your ten O Isreal!

robobo:


There would surely be impairment from the Ghana Restructuring on Nigerian Banks, however i believe it would be manageable. i even suspect that the N6b impairment done by UCAP might be related to Ghana Bond because they (UCAP) have a shop in accra

Trying to investigate what one should expect from the 2022 yet-to-be-released bank results and using the recently released note on the delay by ETI, looking at their Q3 2022 report on page 5 about other comprehensive income, we hope that isn't what they intend to add to their P/L account. See attached.

Also ran checks on Zenith, UBA, FBN, Access, GTB and other banks are they seem to be having similar negative other comprehensive income (debt losses and fx loss) measured at FVOCI but not to the extent of ETI. And this was just Q3.

It seems the Pan-African thing gives bigger headache.

Ran a check on UCAP Q3 2022 to see if there was a clue on other comprehensive income but didn't see any. Maybe they just took one-time loss on their debt holdings at year end.

BullBearMkt:
BANKING SECTOR HEAD-n-SHOULDER PRICE PATTERN NOW OBVIOUS
I remember showing on this platform late last year the emergence of head-and-shoulder price pattern on NGX banking sector. With price at major resistance level AND IF this month ended bearish, then there is high possibility to see more banking stocks going further south. However, the cushion effect is that the major index is still showing strength. So, the selling pressure, may probably be temporary.

PLAN YOUR TRADES AND TRADE YOUR PLANS

And the neckline is wicked.

Ok

i expect the banking stock to make U turn today, enough of the weight shedding

YoungBuffet:
i expect the banking stock to make U turn today, enough of the weight shedding

Even the USA done make u turn, so why not? Its very much expected although they never really reacted to the US stuff.

Mpeace:
Even the USA done make u turn, so why not? Its very much expected although they never really reacted to the US stuff.

Let's be careful. We should watch till the time Fed starts cutting rates and restarting unlimited QE just like it did during pandemic. For now, western markets still have large room to fall. Fed needs to panic and abandon rate hikes totally.

RabbiDoracle:


Trying to investigate what one should expect from the 2022 yet-to-be-released bank results and using the recently released note on the delay by ETI, looking at their Q3 2022 report on page 5 about other comprehensive income, we hope that isn't what they intend to add to their P/L account. See attached.

Also ran checks on Zenith, UBA, FBN, Access, GTB and other banks are they seem to be having similar negative other comprehensive income (debt losses and fx loss) measured at FVOCI but not to the extent of ETI. And this was just Q3.

Sometime in Nov, 2022, I did some extrapolations on the OCI of banks (safe for Unity) stoked by the fair value differential (FVD) from eligible reclassified asset in their books, and its would-be impact on their NPM... and I remember telling some folks that;

1) ETI was a sell.
ETI had a fantastic run in on growth trajectory up until H1, 2022 following magt deliberate strategy to improve AsQ in Nigeria, but Q3 report printed a deviation in that line.
N12--13+ should've been the best exit price given how risk at the time, had a near equivalent peg to possible reward in view of the banks intrinsic value.
But I have to admit that selling now still defines playing safe.

2) ACCESS, ZENITH, FCMB, FIDELITY, UBA and GTB were a buy depending on ones trade set-up.
As I said then; I like the 6 names, but prefer the last 3. (portfolio weighting in view)

With the last name (GTB), there were valid concerns that NIM would continue to deteriorate and rein in on AsQ following the decision to adopt a Holdco structure and given how the banks CoF was growing at a much faster pace than AsY prior that time.
But people were probably not seeing the other positives, particularly in Q3, 2022.
@ N17, MoS from IV was almost at par to price hence it made so much sense to jump in! (stated it here then)

And what about now?

I still think that ETI and ACCESS will likely be impacted more (YoY match in view)
Though I like the Nos in ACCESS Q3, 2022, I expect a moderate drop in AsY and AsQ in Q4 and it's YoY comparable period.

My expectations for ZENITH and GTB are obviously that of a mild one with a slightly higher degree of impact on the former (I expect a weaker NPM driven by added CoF/CoR as the Holdco plans set in)... this though, will only be in the short term.
With GTB though, my projection is that NPM and AsY will be impacted QoQ but not YoY. Notwithstanding, I expect GT AsQ to remain strong.

With the last 3 names (FCMB, FIDELITY and UBA) impact will be almost immaterial.
These 3 names have on average, been the most efficiently run in the last 5 quarters.
That said, I would gladly put my money in the last name (UBA) ahead of the 1st 2 in view of their CMPs (risk-reward margin in view)
...I like UBA.
For near similar reason, I also like STERLING BANK.

With them banks, it should be a selective play... of course, having a trade set-up that suits ones investment personality.

Selah

Dear onegentleguy
PLEASE WHAT IS YOUR FAIR VALUE OF STERLING BANK.
STERLING BANK FINANCIAL Ratios as per unaudited Q42022; What is you take.

Dear onegentleguy
PLEASE WHAT IS YOUR FAIR VALUE OF STERLING BANK.
STERLING BANK FINANCIAL Ratios as per unaudited Q42022; What is you take.

onegentleguy:


Sometime in Nov, 2022, I did some extrapolations on the OCI of all banks (safe for Unity) stocked by the fair value differential (FVD) from eligible reclassified asset in their books, and its would-be impact on their NPM... and I remember telling some folks that;

1) ETI was a sell.
ETI had a fantastic run in on growth trajectory up until H1, 2022 following magt deliberate strategy to improve AsQ in Nigeria, but Q3 report printed a deviation in that line.
N12--13+ should've been the best exit price given how risk at the time, had a near equivalent peg to possible reward in view of the banks intrinsic value.
But I have to admit that selling now still defines playing safe.

For near similar reason (there are other reasons) STANBIC IBTC was also a sell.
Price was hovering above N40 at the time.

2) ACCESS, ZENITH, FCMB, FIDELITY, UBA and GTB were a buy depending on on ones trade set-up.
As I said then; I like the 6 names, but prefer the last 3. (portfolio weighting in view)

With the last name (GTB), there were valid concerns that NIM would continue to deteriorate and rein in on AsQ following the decision to adopt a Holdco structure and given how the banks CoF was growing at a much faster pace than AsY prior that time.
But people were probably not seeing the other positives, particularly in Q3, 2022.
@ N17, MoS from IV was almost at par to price hence it made so much sense to jump in! (stated it here then)

And what about now?

I still think that ETI and STANBIC would likely be impacted more (YoY match in view)
Though I like the Nos in ACCESS Q3, 2022, I expect a moderate drop in AsY and AsQ in Q4 and it's YoY comparable period.

My expectations for ZENITH and GTB are obviously that of a mild one with a slightly higher degree of impact in the former (I expect a weaker NPM driven by added CoF/CoR as the Holdco plans set in)... this though, will only be in the short term.
With GTB though, I expect NPM and AsY to be impacted QoQ but not YoY. Notwithstanding, I expect GT AsQ to remain strong.

With the last 3 names (FCMB, FIDELITY and UBA) impact will be almost immaterial.
These 3 names have on average, been the most efficiently run in the last 5 quarters.
That said, I would gladly put more of my money in the last name (UBA) than the 1st 2 in view of their CMPs (risk-reward margin in view)
For near similar reason, I also like STERLING BANK.

With them banks, it should be a selective play... of course, having a trade set-up that suits ones investment personality.

Selah

eziokwunwoko:
Dear onegentleguy
PLEASE WHAT IS YOUR FAIR VALUE OF STERLING BANK.
STERLING BANK FINANCIAL Ratios as per unaudited Q42022; What is you take.

If you have bought @ N1.5 and below, you can of course sleep very well having peace of mind.

In the stock market world, a cheap/undervalued asset isn't just one whose price is low in terms of VALUE or high in REWARD... but broadly one whose price is lower in terms of RISK and even higher in peace of mind.
...a wining investor must know how and when to relate in between !!
~Sinclair
This Nugget is KEY !!

One of the finest similarity between a bull and a bear market is that both OVERCONFIDENCE and UNDERCONFIDENCE can be punishable offences.
..."the jury" tends to vindicate those who understand "the concept of neutrality" where necessary and are swift enough to act on it !!
~Sinclair

The stock market will more often than not, gift you with a "weighing scale" but unlike that device, your "measurement precision" would solely depend on finding the RIGHT BALANCE between holding on and letting go."
~Sinclair

For clarity; the concerns raised by @RabbiDoracle and a few others are of course valid.
But like I always say;

"Between uncertainties, difficulties and failures is the many 'gift packs' from the stock market.
...and inside those 'gifts' are smaller 'packs' with obstacles but which are sealed with CRAFT.
Yet down inside, are even more 'packs' of OPPORTUNITY."
~Sinclair

Careful selective play is the way to go!

Selah

onegentleguy:


If you have bought @ N1.5 and below, you can of course sleep very well having peace of mind.
...

@onegentleguy, your assertion from the technical point of view is correct about Sterling Bank. After the corrective wave W-X-Y, good entry will be around 1.40

essentialone:
This cashless policy has exposed the weakness of the Nigerian Banks infrastructures.

Meanwhile, if you want to send money to anyone using OPAY, no need to ask for their account number. Just remove the first 0 in their phone numbers. The remaining 10 digits is their OPAY account number. You can use my phone number to experiment it🙄
.

Lol. Good advert for Opay.
Never been paying attention to those Fintech medium until recently.
Many pple are actually switching to them........but they do have their own issues too.

For the banks, I think the recent pressures were much than what they'd envisaged, but some are now upgrading the infrastructures to accommodate the high online demands.

GTCO, ZENITH
* These two are the stocks mostly affected in market.....
*Yesterday GT was dragging ZEE.....
* Today ZEE is proving to be the champion when it comes to moving south......
* If not because they're solid stocks, they can be annoying sometimes.

UCAP
Marked down for dividend.......
Opened @12.90
Looks like one entity was selling down before markdown, thus dragged the share price down...

yMcy56:

Lol. Good advert for Opay.
Never been paying attention to those Fintech medium until recently.
Many pple are actually switching to them........but they do have their own issues too.

For the banks, I think the recent pressures were much than what they'd envisaged, but some are now upgrading the infrastructures to accommodate the high online demands.

Madam Mcy, please how can I get OPAY to pay me for this advert? Nothing is free again ooo. Not even in Freetown. lol

essentialone:
Madam Mcy, please how can I get OPAY to pay me for this advert? Nothing is free again ooo. Not even in Freetown. lol

Lol. Thought you're an agent already.
Contact them na.....as good customer concern.

yMcy56:
GTCO, ZENITH
* These two are the stocks mostly affected in market.....
*Yesterday GT was dragging ZEE.....
* Today ZEE is proving to be the champion when it comes to moving south......
* If not because they're solid stocks, they can be annoying sometimes.

UCAP
Marked down for dividend.......
Opened @12.90
Looks like one entity was selling down before markdown, thus dragged the share price down...

please is now a good entry time for UCAP?

Ginalex:
please is now a good entry time for UCAP?

never enter oo, wait for their q1 first.

YoungBuffet:


never enter oo, wait for their q1 first.

okay. Thank you

onegentleguy:


Sometime in Nov, 2022, I did some extrapolations on the OCI of banks (safe for Unity) stocked by the fair value differential (FVD) from eligible reclassified asset in their books, and its would-be impact on their NPM... and I remember telling some folks that;

1) ETI was a sell.
ETI had a fantastic run in on growth trajectory up until H1, 2022 following magt deliberate strategy to improve AsQ in Nigeria, but Q3 report printed a deviation in that line.
N12--13+ should've been the best exit price given how risk at the time, had a near equivalent peg to possible reward in view of the banks intrinsic value.
But I have to admit that selling now still defines playing safe.

For near similar reason (there are other reasons) STANBIC IBTC was also a sell.
Price was hovering above N40 at the time.

2) ACCESS, ZENITH, FCMB, FIDELITY, UBA and GTB were a buy depending on ones trade set-up.
As I said then; I like the 6 names, but prefer the last 3. (portfolio weighting in view)

With the last name (GTB), there were valid concerns that NIM would continue to deteriorate and rein in on AsQ following the decision to adopt a Holdco structure and given how the banks CoF was growing at a much faster pace than AsY prior that time.
But people were probably not seeing the other positives, particularly in Q3, 2022.
@ N17, MoS from IV was almost at par to price hence it made so much sense to jump in! (stated it here then)

And what about now?

I still think that ETI and STANBIC would likely be impacted more (YoY match in view)
Though I like the Nos in ACCESS Q3, 2022, I expect a moderate drop in AsY and AsQ in Q4 and it's YoY comparable period.

My expectations for ZENITH and GTB are obviously that of a mild one with a slightly higher degree of impact in the former (I expect a weaker NPM driven by added CoF/CoR as the Holdco plans set in)... this though, will only be in the short term.
With GTB though, my projection is that NPM and AsY will be impacted QoQ but not YoY. Notwithstanding, I expect GT AsQ to remain strong.

With the last 3 names (FCMB, FIDELITY and UBA) impact will be almost immaterial.
These 3 names have on average, been the most efficiently run in the last 5 quarters.
That said, I would gladly put my money in the last name (UBA) ahead of the 1st 2 in view of their CMPs (risk-reward margin in view)
...I like UBA.
For near similar reason, I also like STERLING BANK.

With them banks, it should be a selective play... of course, having a trade set-up that suits ones investment personality.

Selah

The impact will not be much on STANBIC due to the shareholding structure.

The negative factors staring at the banks at this time is too many.
Most of them own the junk bonds from Ghana.
Their Q4'22 and Q1'23 is going to be messed up due to emefiele's cashless policy.
Also, Nigeria's recent junk status rating is going to trickle down to them as they also own FG bonds and the outcome of the election is just waiting by the side.
I see ZB and GTCO doing N15 again soon with ZB even worse due to the ongoing board management fight and its holdco reconfiguration.

Banking stocks on free-fall

As for the international scene, everyone in the finance sector has been expecting the events happening at the moment.

We even expected it as early as December/January, but nothing happened which made some to start speculating about a possible softlanding.

Its effects has already been planned for and most financial institutions already insulated themselves and prepared for it. You can't fight the type of inflation we are experiencing and not sacrifice some pawns.

The west needs a recession to correct things and everyone is still expecting a big one. But the job market and other metrics are still staying strong.

It remains to be seen if the so-called soft landing will happen but whatever happens in the west will have little to no effect in the Nigerian economy as it is in a world of its own.

Cadillac15:
The negative factors staring at the banks at this time is too many.
Most of them own the junk bonds from Ghana.
Their Q4'22 and Q1'23 is going to be messed up due to emefiele's cashless policy.
Also, Nigeria's recent junk status rating is going to trickle down to them as they also own FG bonds and the outcome of the election is just waiting by the side.
I see ZB and GTCO doing N15 again soon with ZB even worse due to the ongoing board management fight and its holdco reconfiguration.

This is funny. Nothing dey happen to Nigerian banks. The big boys just trying to drive down the price to get the softies out of the market. Nigerian banks dey gidigba. Everytime a little bit of selling-off happens that drives the price south people always come up with all these stories of how Nigerian banks are about to suffer.

Lion123:


This is funny. Nothing dey happen to Nigerian banks. The big boys just trying to drive down the price to get the softies out of the market. Nigerian banks dey gidigba. Everytime a little bit of selling-off happens that drives the price south people always come up with all these stories of how Nigerian banks are about to suffer.

Totally agree. The funny part is if by mistake all the hysteria people are calling for materializes, and Zenith, UCAP and GTB are at N10 and N9 respectively, these people will still not buy! They will start with another chapter of hysteria that will take the prices down to N3!!!

The noise is tiring, but lets keep falling, so my dividends can buy a lot more shares

BRENT CRUDE Oil has broken an important support line at $75. If it continues to selloff, the next point is a critical midpoint line at $38.

BRENT at $38 will give Nigeria serious headache. Many oil exporters will share same headache. Oil importing countries will enjoy this low price especially US that needs Brent to fill their Strategic oil reserve and augment their West Texas Intermediate blend.

If Brent falls, NGX falls too. Be cautious.

Jim of zenith bank earns about 8billion
TE earns around 6b
Segun Agbaje earns in about 2b
wigwe earns around 3b

all in dividend yearly


Guys if u are still holding your stocks before the downward trend please hold tenaciously dont ever sell in loss, those big boys can not allow the cows milking for them to die anyhow. That his why is always good to check the movements of those big boys, i can only stop investing in those banks if those big boys are selling as long as they are holding then we dey there together i will not sell my stocks in loss i will earn dividends along with them. DONT SELL YOUR STOCK IN PANIC. Also good to check their holding in their annual FS. I could remeber when dangote sold DFM i pulled out too when he came back i follow enter and everybody follow comot the same time. HOLD YOUR STOCK PLS NOTHING DO NIGERIA BANK.

RabbiDoracle:
BRENT CRUDE Oil has broken an important support line at $75. If it continues to selloff, the next point is a critical midpoint line at $38.

BRENT at $38 will give Nigeria serious headache. Many oil exporters will share same headache. Oil importing countries will enjoy this low price especially US that needs Brent to fill their Strategic oil reserve and augment their West Texas Intermediate blend.

If Brent falls, NGX falls too. Be cautious.

Thanks BOSS for the head up. Anyway, we have witness the worst of oil going down to 20 dollar we came out of it. If money dey we buy more if money no dey we enjoy our dividends. Tough time doesnt last but tough people do.

YoungBuffet:


Thanks BOSS for the head up. Anyway, we have witness the worst of oil going down to 20 dollar we came out of it. If money dey we buy more if money no dey we enjoy our dividends. Tough time doesnt last but tough people do.

"This too shall pass", that is always my belief.

If one has cash, just hold. If one has stocks that pay dividends, it still gives cashflow which can be used to buy stocks lower. If one has cash and stocks, perfect!

Nothing to fear. It will only be a paper loss. One will only regret if he doesn't have cash to pick some lows to add to existing positions.