Stock Market Tips For Nigerians

Buy any of the blue chips you feel like buying(considering their quoted prices this time last year,I'd say they've ALL bottomed out),you don't need to make so many consultations,only you have to perish all these thoughts of 100% by March 2009n and just ensure you buy for the medium to long term and you'll not regret

i abhor the entire Insurance sector but what is the mad rush for FCMB shares?

going for penny stocks now is kinda risky but the riskier the greater the reward.

the NSE has increased the number of less - privileged.

Hmmmmmm,real sign of the times
Nearly two months now (since 24 November and we're still at half a thread page)

Happy new year to you all,both the oldies on this thread (who occasionally peep in and run off and the newbies)
Whatever investment style you choose to adopt this year,I wish you all fantastic ROIs

please people THANKS FOR YOUR POSTING ITS REALLY INSPIRING, please DO TO MY NOVICENESS IN THIS BIZZ I WANT TO INVEST IN STOCKS AND SHARES , please I REALY NEED IDEAS FROM YOU ALL, WHAT IS THE FIRST STEP I SHOULD TAKE FIRSTLY, LIKE I SAID I AM NEW AROUND this KIND OF BIZZ, AM I THE ONE TO TRADE FOR MYSELF OR WILL I GET A STOCK BROCKER TO TRADE FOR ME, THIS AND MORE I WILL LIKE YOU GUYS TO HELP ME WITH please, HONEST IDEAS please, THANKS ALL REALLY APPRECIATE THE TIME YOU GUYS SPEND IN TEACHING US NOVICE ABOUT EXPANDING OUR MIND AND INFO   QUDOSS

It is really in times like this that we need our Nairaland experts/gurus - fatherof2 et al- to come up with ingenious strategies on how to survive in the bear market. May God guide their hearts and minds as they address this onerous task.

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                 Hi Wendoworld, i guess this might be of bountiful  help as a novice in this field,  study it very carefully with some others you discover yourself and if any you think  it might be of help to me don't exit ate to past it also      :-  http://marketlive.in/stock-market-tutorials/stocks-tutorial

My good people of nairalanders i greet u all. I want to know if any one has idea of  any bank that  emgage in margin trading? I hav N150k so i want a bank that can make it up to N500k for me to buy shares while i pay small interest.

A bad time indeed for most of us. All the gurus in the house have lost their GURUNESS. We are all nursing our wounds quietly. This goes to show that anybody can play the fool sometimes in the stockmarket. My prayer is that may the market recover on time so that the gurus can show up again . On a serious note, I thank God that no investor on NL has committed suicide like the stories we are hearing from overseas. Yes, the usual dogged spirit of a Naija man will see us through. Keep the faith, my fellow investors in the NSE.

thank

am fully into stock trading but there some factors right now.

now it seems you posted something like this website=numenmail.com

if so kindly lead me to yhe other website you mentioned

emtar.

yaaoo2008@gmail.com

pls who knows the current contact details of UAC registrars - I have been trying the one on their website but no one is picking.

thanks.

VISAFONE BEGINS N30BN PRIVATE PLACEMENT

After 10 months of operations that have seen its subscriber base growing to 2.4 million, Visafone Communications Limited, an indigenous telecommunications company, is set to raise over N30 billion through private placement of shares to a select group of investors. The company intends to raise the money by offering a minimum of 100,000 shares to a select number of sophisticated investors at N16.90 per share. The placement which has Zenith Capital as the issuing house opens to investors on January 5, 2009 and is expected to close on February 6, 2009. The bulk of the offer proceeds would be employed to fund base station expansion, fibre backbone, increase in working capital amongst other things

Job losses loom as Naira crashes further   
Written by Funmi Komolafe, Labour Editor, Babajide Komolafe, Victor Ahiuma-Young & Franklin Alli     
Tuesday, 13 January 2009 
*Banks plan massive lay-offs

A thick cloud of uncertainty descended on the nation’s foreign exchange market yesterday as the Naira fell further by N6 to N150 per dollar in the official market, with dire implications for the national economy.

Reacting to the development, the Nigerian Employers Consultative Association (NECA), the Nigeria Labour Congress (NLC), Manufacturers Association of Nigeria (MAN), and other members of the organised private sector warned that the continued fall of the Naira would lead to widespread increases in prices of goods and services, unemployment, and increases in costs of capital projects across the country.

Already, there are indications that the banking industry would soon experience massive job cuts as banks have concluded plans to lay off thousands of workers as part of strategies to cope with the impact of the global financial crisis.

At the inter-bank market, N153 exchanged for one dollar as against N147 on Friday, while the parallel market, Bureaux de Change (BDCs), said they do not have any specific exchange rate for the Naira owing to uncertainty on the official exchange rate and supply of foreign exchange by the Central Bank (CBN).

With the latest drop, the naira has depreciated by N18.73 or 14.3 per cent in the official market since the beginning of the year. Last week, from N131.27, the naira depreciated to N144 in the official market, losing N12.73 to the dollar.

Foreign exchange dealers of banks and BDC operators, who spoke to Vanguard, expressed concern over the silence of the CBN, saying this is fuelling uncertainty and speculation in the foreign exchange market. A senior bank dealer said the apex bank had been very secretive since it started depreciating the Naira last month.

“Hitherto, the CBN announces results of foreign exchange auction and the ruling official rate, but since the beginning of the year, the apex bank has not been doing this. Rather, it keeps the banks and BDCs in the dark on how much it is selling and what rate it sold,” the dealer complained.

“As a result, nobody is sure of what is going to happen, whether the CBN will sell foreign exchange and the quantity it will sell, whether it will further depreciate the naira, and by what margin. The situation has got to a point that nobody knows what to do and there is increasing dependence on rumours and speculations.”

Experts warn on inflation

Members of the Organised Private Sector and banking experts have warned that the depreciation of the naira would occasion widespread increase in prices and increased unemployment.

According to the Nigeria Employers Consultative Association (NECA) and the Nigeria Labour Congress, the crash of the naira will lead to job losses, drop in capacity utilisation, higher cost of production and a drop in the purchasing power.

Speaking to Vanguard, Director-General of NECA, Mr. Olusegun Oshinowo, said “the managers of this economy should address the state of our economy and our currency.”

He saidthe implication is that “costs will go up, capacity utilisation will drop, there will be lay-offs and purchasing power will drop.”

NLC’s General-Secretary, Comrade John Odah, described the crash of the naira as tragic. He also called for transparency on the part of the government.

His words: “It is tragic and it shows that our economic managers have not been able to protect our currency and economy from the global financial meltdown. It shows the hollowness of claims that we are not going to be affected.”

NECA Director-General said: “We need somebody to come up and tell us what is going on. We are in a crisis and we are not acknowledging this.”

Speaking in the same vein, NLC General-Secretary, John Odah, said “something must be done urgently. Government and our economic managers must tell the people what is being done about the economy.”

Both Oshinowo and Odah said governments of other developed countries have  informed their people about the state of the economy and what is being done.

In the words of Comrade Odah, “in other countries, people know what their governments are doing. The Central Bank of Nigeria  must tell Nigerians what it is doing with our national economy and currency.”

Mr. Oshinowo  said Government’s statement on the state of the economy is urgent and necessary now. He recalled, “in December 2008, we had to dip our hands into our foreign reserves to the tune of $6 billion. In the light of dwindling oil production, government must come out  to say something.”

Speaking in the same vein, Manufacturers Association of Nigeria (MAN)  President, Alhaji Bashir Borodo, said the depreciation would have an adverse effect on the cost of production in two ways.
First, he said cost of imported raw materials will rise which will further hike the cost of production and lead to increase in price levels across the country.

He further asserted that the falling value of the naira, if not arrested, could lead to increase in interest rates. 

“As more naira is generated to buy dollar in the foreign exchange market, what would be left for lending to businesses would be less, which will in turn, push up the lending rates by banks,” he noted.

"The Central Bank of Nigeria (CBN), should intervene effectively to save the value of the Naira and protect the macro-economic gains achieved in the last four years, otherwise, we will be repeating our experiences four years ago,” said Borodo.

The year would be characterized by a number of macroeconomic shocks. There is the naira depreciation shock. The foreign exchange market fundamentals clearly reflect the inevitability of the naira exchange rate depreciation.

The continued funding of the foreign exchange market at pre-2009 levels had become unsustainable. Since ours is an import-dependent economy, the depreciation of our domestic currency presents potential significant shocks.

Corroborating Borodo's assertion, President of the Lagos Chamber of Commerce and Industry (LCCI), Chief Solomon Onafowokan, said the  depreciation would fuel inflation through increase in procurement costs, higher absolute values of import duties, VAT and port charges all of which would increase proportionately to the degree of depreciation. These would be transmitted to the economy through higher prices. 

LCCI, he stated, has noted that there is also a direct relationship between inflation and interest rate, warning that the cost of fund would come under pressure in 2009. 

His words: “I have reviewed the economic outlook to put in context the policy choices in this potentially challenging year.  The LCCI feels strongly that appropriate policy choices by government could go a long way to mitigate the challenges and shocks, and some of the policy choices we propose include the following:

•Governments at all levels should refrain from the imposition of new taxes or raising tax rates on the private sector in 2009.

The current investment climate is bad enough. An added tax burden would completely stifle and strangulate the private sector and stagnate the economy. We believe that Governments at all levels could achieve marked improvement in revenue through improved efficiency in the collection and administration of existing taxes.

•Fiscal prudence in the public sector is now more critical and imperative than ever before. Governments at all levels should demonstrate greater prudence in the management of their finances.  The spending patterns of the last eight years are no longer sustainable. 

Thus drastic cuts in public sector spending (especially recurrent spending) are imperative in the spirit of the prevailing economic conditions.

•The recent imposition of Excise duty on detergent, cosmetics, alcoholic beverages and fruit juice, spaghetti and noodles, toilet paper and facial tissues, cartons should be reviewed in 2009 in the light of the numerous challenges already facing the real sector. The proposal for an upward review of VAT should be put permanently on hold.

•The state of the power sector has become an inexcusable national embarrassment. Government should resolutely and sincerely commit itself to the target of 6000mw of electricity generation by end of 2009.  Transmission and distribution issues should also be concurrently tackled very urgently.

The economy would stagnate if the present state of the power sector does not improve dramatically.
Bankers who spoke to Vanguard also stated that the depreciation will translate to further increase in the price level and that it is consumers that will bear the burden.

A former CBN director noted that, “the depreciation cost is borne by the private sector as it has a pass through effect and price level changes, which means inflation will rise. The government revenue will increase.

However what goes round comes around as cost of government import (that is, for IPP project) will hit the roof."

Meanwhile the CBN Governor, Professor Chukwuma Soludo will today meet with chief executives of the 23 banks on recent developments in the industry.

The meeting tagged  breakfast meeting with the bankers, scheduled to hold in Lagos, would among other things, deliberate on strategies to end the free fall in which the Naira has found itself in recent weeks.

Banks plan massive lay offs

CONTRARY to the continued reassurance by managers of the Nigerian economy that the nation’s economy, especially the banking sector is insulated from the global financial meltdown, the banking sector is planning to lay off thousands of workers as part of strategies to cope with the global financial turmoil reminiscent of what is  occurring in Europe, Asia and America.

Vanguard authoritatively gathered that a leading first generation bank (names withheld)  and two new generation banks (names withheld) have almost concluded  plans to retrench no fewer than three thousand workers in response to the consequences of world economic slow down.

Since the 2005 banking sector consolidation, the said first generation bank had carried out not less that three retrenchment exercises which affected over two thousand workers, while the other two banks had also carried out one or two retrenchment exercises.

According to a senior staff in the first generation bank who spoke to Vanguard on condition of anonymity, “the effect of the global financial meltdown is already here.

Banks like ours that have direct link and are collaborating with some banks in Europe and America are already feeling the heat.

The job losses is going to be massive. In our case, for a start, the job losses cannot be less than 1000. The other two banks may each retrench more than one thousand staff. Never mind  what the government and its agents are saying.

I think they are just economical with words probably to avoid panic. You can see what has been happening in the stock market since last year.” 

Vanguard's investigation revealed that organised labour in the nation’s financial sector may have gotten a wind of the planned massive retrenchment exercise and is calling for a united front by labour movement in the country and its allies to confront the impending mass job purge.

Under the umbrella of the Association of Senor Staff of Banks, Insurance and Financial Institutions (ASSBIFI), labour, in a recent statement called for the immediate detachment of Nigeria from the Bretton Woods institutions such as the International monetary Fund (IMF) and the World Bank, to save the nation’s economy from the imminent economic predicament.

President of ASSBIFI, Comrade Adeshina Lasisi, in a statement said:  “As the global financial turbulence spreads, if not quickly checked by severing our strings with neo-liberal, Bretton Woods institutions like IMF/World Bank, many socio-economic rights of workers and political rights of citizens would be attacked.

The most apparent threat is the imminent and menacing mass retrenchment of workers, embargo on employment, arbitrary reduction of staff emoluments especially in sectors like the oil/gas, financial and communication, and of course, attacks on the terminal benefits of workers.

All unions and workers must join hands to build a vibrant movement to protect the rights of Nigerian workers in this year because during the period of crisis and economic stagnation, workers are usually the first causalities.

The organized labour and the informal sector must link up with the progressive civil society groups to contextualize the campaign for the protection of workers’ rights.

The immediate past is replete with instances of how labour and civil society served as the only formidable opposition in the country. We can do it better.”

Er, how will reducing the number of shares outstanding improve a company's fundamentals?? There's some advantage in administration, but share reconstruction (which is a fancy name for some simple arithmetic) isn't anything but that: share reconstruction; you may reconstruct the shares, but that's much less to say about the company itself.

And, the absolute value of the dividend isn't the important parameter; take a look at dividend yield, and other metrics as P/E, EPS and PEG.
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                          Why the Naira is on a Freefall

I am by no means an economist, but I have a few suggestions on why the naira has been on a catastrophic fall. One, the fall in crude oil price has reduced the influx of forex into our economy. The dollars are no longer raining like they used to. Simple demand and supply logic: lower supply pushes up the price. Two, the foreign reserves were being used to defend the former rate of $1:N116 even after the fall in crude oil prices. Our reserves are going down. There is a limit to which you can draw from your reserves before you start sending danger signals to your trading partners. Three, the $1:N116 that was sustained for so long, without improved local industrial production, had worsened our balance of trade. Imports had become so attractive that the ports are overflowing with containers. It means, essentially, that there has been too much pressure on the dollar to finance imports, thereby depressing the naira. Four, the global financial crisis has seen a drop in the amount of dollars supplied independent of CBN. Wire transfers to Nigeria are not what they used to be, while big banks that used to supply dollars to the market are also facing the crisis.
Last but not the least: money laundering has returned with a vengeance. In the early 2000s, public officers used to convert state allocations to dollars to buy property abroad. Nobody challenged them. The naira usually went on a freefall after every FAAC meeting where allocations are shared. The then Minister of State for Finance, Nenadi Usman, raised an alarm over this trend and the political class muzzled her up. They almost got her removed but ex-President Olusegun Obasanjo refused. Then came Nuhu Ribadu’s intervention. Politicians were soon put in check. Looting and money laundering were curtailed. Politicians were getting arrested abroad with dollar-loaded suit cases.
Of course, the politicians have regrouped in this dispensation and crushed Ribadu, thanks to the “rule of raw” (apologies to Justice Minister Mike Aondoakaa). Money laundering is back in full force as looters rush to the US and Europe to take advantage of falling house prices following the mortgage crisis. The EFCC chairman, Mrs Farida Waziri, lamented the new trend recently. Obviously, there is too much pressure on the dollar from the looters and this is a major factor in the freefall. We all, not just Ribadu, are paying the price, you know.

Thisday