yMcy56:

It's irrelevant!
So also these Fitch and the likes.....

Why will they come up with such re-classification around the time the govt was making frantic efforts to woo investors?

What does their upgrade even bring to the table in the first place?

I for one doesn't take them serious anyway, not expecting serious minded investors either.
Mr. Market had a mind of its own, it will stabilize regardless.

Who has time for all those useless foreign rating companies who do not see anything good in any economy beside that of develop countries. The nse is majorly locals so thay can rate what ever they want. It doesn't affect my dividend from the companies I invest in

Tinubu has been globe-trotting for funds. Don't you think investors are looking for juicy long term bond yields??
Just me thinking wild.

Today's red, red oh. Even people panicked on Transcorp? Hmm. Oando unshaken! Tomorrow's another day.

Princkez:
I think this caused banks pull back...

Lol.
Let's wait for analysts breakdown of the circular and possible counter explanation from CBN.

Sometimes, CBN acts as if they're confused or answering to a "Master" on certain decisions.

Let's see how events unfold in coming days.....

Yeah, but what those all these mean for the bank in the future

Princkez:
I think this caused banks pull back...

yMcy56:

Lol.
Let's wait for analysts breakdown of the circular and possible counter explanation from CBN.

Sometimes, CBN acts as if they're confused or answering to a "Master" on certain decisions.

Let's see how events unfold in coming days.....

I think CBN did the right thing

Streetinvestor2:
Who has time for all those useless foreign rating companies who do not see anything good in any economy beside that of develop countries. The nse is majorly locals so thay can rate what ever they want. It doesn't affect my dividend from the companies I invest in

You got the drift brother.
All those useless ratings are irrelevant to us and our market.
Let them focus on their developed countries and stop tarnishing the economy's image upandan

emmanuelewumi:




I think CBN did the right thing

Very perfect decision and supervision by cbn.They should not pay dividend based on forex revaluation because it won't be sustainable. The dividend and expenses should be based on revenue from core business operations

Streetinvestor2:
Very perfect decision and supervision by cbn.They should not pay dividend based on forex revaluation because it won't be sustainable. The dividend and expenses should be based on revenue from core business operations

Are we now saying when the banks made those massive gains, Investors should not benefit from it?

While I understood the disappointment that may come with reduced future dividend, should the FX gain not be there again, I think there must have been clauses in their statement to properly address this.

Abeg no mind me o. I be JJC for all these terms, na amateur view I take dey look am... .....and that's the way I see it.

Let me leave the discussion for those wey Sabi......

yMcy56:

Are we now saying when the banks made those massive gains, Investors should not benefit from it?

While I understood the disappointment that may come with reduced dividend, should the FX gain not be there again, I think there must have been clauses in their statement to properly address this.

Abeg no mind me o. I be JJC for all these terms, na amateur view I take dey look am... .....and that's the way I see it.

Let me leave the discussion for those wey Sabi......

I think the CBN is being too selfish. If the said gains are not paid as dividends and they do not go into the operations of the banks, where then do they go: CBN who would purportedly save them for the banks?
Its not fair. I think the CBN would have mandated the banks to save only a portion of these gains rather than totally restrict the use of it.

Mpeace:
I think the CBN is being too selfish. If the said gains are not paid as dividends and they do not go into the operations of the banks, where then do they go: CBN who would purportedly save them for the banks.
Its not fair. I think the CBN would have mandated the banks to save only a portion of these gains rather than restrict the use of it for dividends and operations.

So what should the banks do when they experience serious forex losses

emmanuelewumi:







So what should the banks do when they experience serious forex losses

Thats why they should only restrict a portion.

The CBN we know will force banks to make provisions for such losses from their profits but will not now allow them enjoy the gains.
The banks suffer when their is fx losses and also suffer in times of fx gains.

Mpeace:
I think the CBN is being too selfish. If the said gains are not paid as dividends and they do not go into the operations of the banks, where then do they go: CBN who would purportedly save them for the banks?
Its not fair. I think the CBN would have mandated the banks to save only a portion of these gains rather than restrict the use of it for dividends and operations.

What happens in the future if things turn around and the naira strength against the dollars and revaluation takes place again after this ceo who are majority shareholders have cornered large sums as dividend. You know how corrupt this ogas can be,you can't imagine the bloated operating expenses you will see because they now have open cheque for spending.
I understand small shareholders should benefit from the windfall . They should allow the economy recover and this government policies get rooted so that they don't pull out have money via dividend/expenses and revaluation downward happens. I believe if we get our major source of forex drain right which is fuel importation we may have another round of revaluation

There's nothing to worry about the CBN circular. It's impact on the banks will be very limited and not likely to adversely affect their dividend payout.

Princkez:
I think this caused banks pull back...

emmanuelewumi:

So what should the banks do when they experience serious forex losses

The CBN regulation on the banking sector this time around is arant non..sens.e. If it were to be that the banks are on the receiving end and suffer forex losses, will the CBN help them in anyway to recover the losses? Is it not shareholders that are taking the heat on those other sectors that suffer forex losses because they may eventually not pay the amount of dividend they have been paying before; companies like Nestle, DangSugar, Unilever, Cadbury etc.

Yes, as the regulatory authority, the CBN can sound a note of warning to the banks to exercise restraint on the gains, but not completely limiting their powers on it. The forex gains belongs to banks and their shareholders.

**

Streetinvestor2:
What happens in the future if things turn around and the naira strength against the dollars and revaluation takes place again after this ceo who are majority shareholders have cornered large sums as dividend. You know how corrupt this ogas can be,you can't imagine the bloated operating expenses you will see because they now have open cheque for spending.
I understand small shareholders should benefit from the windfall . They should allow the economy recover and this government policies get rooted so that they don't pull out have money via dividend/expenses and revaluation downward happens. I believe if we get our major source of forex drain right which is fuel importation we may have another round of revaluation

There is no how the naira is appreciating above the current I&E rate, which the bank used in revaluation.
All the FX policy will not work without substantial cut in government spending. You will be shocked that the FX crisis will not be any different even when Dangote Refinery and other refineries start working.

I can vouch that 30-40% of the country's yearly budget is embezzled. That is the source of billions of naira that drains the countries FX through the black market.

Without substantial cut in government spending, we will be looking at $1 to ₦1100 by the end of 2024

.

pizapato:


There is no how the naira is appreciating above the current I&E rate, which the bank used in revaluation.
All the FX policy will not work without substantial cut in government spending. You will be shocked that the FX crisis will not be any different even when Dangote Refinery and other refineries start working.

I can vouch that 30-40% of the country's yearly budget is embezzled. That is the source of billions of naira that drains the countries FX through the black market.

Without substantial cut in government spending, we will be looking at $1 to ₦1100 by the end of 2024

The fx gains bei g talked about is not necessarily a special thing. Its the actually the result of the true valuation of the naira. Yet it is not even based on the actual value of the naira which is over 900/$.

Mpeace:
Thats why they should only restrict a portion.

The CBN we know will force banks to make provisions for such losses from their profits but will not now allow them enjoy the gains.
The banks suffer when their is fx losses and also suffer in times of fx gains.

It is a windfall and not sustainable, such unexpected income requires prudence. That is why I tell people who receive inheritance not to touch the capital but to only spend the return on the capital.


By the way the interim dividend declared by GTB and Zenith Bank increased by 67% in 2023

Me I like the twin effect of FPI exit and the CBN restrictive circular on banks div, it’s an opportunity to re-enter some good stocks at bargain prices….As a trader or investor, you must be adaptive to succeed!

emmanuelewumi:




I think CBN did the right thing

Exactly. A closer look at the financials of GTB and Zenith shows they would have posted losses in H1 if the fx gains are eliminated, given their massive impairment charges (part of which might be fx related anyways).

Allowing the banks to use the fx gains for operating expenses or dividends might be likened (casually) to an investor whose portfolio shows massive profits on paper and he proceeds to spend heavily based on the 'paper profit'.

The fx gains are unrealized. Valuations. If naira, miraculously, gains to say N100 to $, those gains/profits would be wiped out.

With the new CBN directive, will banks adjust the interim dividend or what? People already booked major profits on them. I perceive more turbulence for that sector.

Zenith bank already on first level support zone @34 , will it hold or kiss 29 before stability?

When the banking sector sneezes, NSE catches a cold.

vacanci:


This Zenith is what i do not understand. profit doubled and dumping increased.
This defies both fundamental and technical.
Is this the example of Nigeria stock exchange has a mind of its own?

A very interesting irony which the fundamentalists (permit me to use it that way) have not been able to explain here for years.

Frangel:


Exactly. A closer look at the financials of GTB and Zenith shows they would have posted losses in H1 if the fx gains are eliminated, given their massive impairment charges (part of which might be fx related anyways).

Allowing the banks to use the fx gains for operating expenses or dividends might be likened (casually) to an investor whose portfolio shows massive profits on paper and he proceeds to spend heavily based on the 'paper profit'.

The fx gains are unrealized. Valuations. If naira, miraculously, gains to say N100 to $, those gains/profits would be wiped out.

LOL, I wanted to go through the quarter results to check if these FX gains have been realized or not. But then I thought, if they haven't been realized, how the hell are they sharing excess gains with investors? Where is the money coming from?

Even if they converted these foreign-denominated funds to naira, that would look like crossing into currency speculation business. Yes, that is what it looks like.

So, are banks now currency speculators? LOL.

Kreos44:
Making money in this market is not for the faint hearted. I waited for pull back in Dangote sugar from the time it was 45ish so i can buy more units, it didn't happen. I finally gave in on Friday and bought at N64. See price now.

Sad but funny.

leparj:


Na so.
There was a time I always felt someone was watching me. As soon as I bought, the price will fall
If u go long term, such changes don't matter.

Deadlytruth:

Sad but funny.

LOL, it weakens me, o. This long-term investing can be a painful endeavor when you watch your portfolio bleed money in these Tinubu times. Yesterday alone, the combined movement of Zenith and Dangsugar subtracted money that was enough to buy a small tokunbo car.

.

Myhelper1:
You're not alone! I bought Dansugar and Transcorp very high too.

I didn't buy that high, but the gains I am giving back are money that could have been put to good use. LOL

phoinix:


LOL, I wanted to go through the quarter results to check if these FX gains have been realized or not. But then I thought, if they haven't been realized, how the hell are they sharing excess gains with investors? Where is the money coming from?

Even if they converted these foreign-denominated funds to naira, that would look like crossing into currency speculation business. Yes, that is what it looks like.

So, are banks now currency speculators? LOL.

LOL. On second thought, if the gains are due to increased returns in foreign-denominated bond yields, then it is okay to share the profits. LOL.

Zagee:
With the new CBN directive, will banks adjust the interim dividend or what? People already booked major profits on them. I perceive more turbulence for that sector.

Zenith bank already on first level support zone @34 , will it hold or kiss 29 before stability?

When the banking sector sneezes, NSE catches a cold.

The CBN must have approved the interim dividend.

pluto09:


The CBN must have approved the interim dividend.

So as it should be. So I'm thinking other yet-to-be-declared dividend will not be what was initially anticipated?

Let's see the figures Access and UBa will push out.

OANDO heading to #20