Be Careful About Buying These Banks Stocks!

vey well said. i bought some bank shares in the the 80s and travelled abroad by the time  i came back they banks have either closed or in now in private hands.

ba very careful indeed

We will all be deluding ourselves, folks if we think sharp practices don't go on in the NSE. Asking for proof is like asking why is the sky blue.I believe loophole exploitation and gross illegalities are going on on a monumental scale and it is only a matter of time before we have our first stock market crash. And it will take a couple of crashes before the regulators can get it right. Now most EFCC guys and guys from the special fraud unit of the NPF can't even identify stock market market fraud when they see one.

But this is not going to stop me from buying. Someone drowned in the village stream is not a reason you stop drinking water. I think the best attitude is to diversify as much as possible and be very ready. Ultimately the stock market has come to stay.  Even our dumb leaders recognize that you can't grow a modern economy on guguru and ekpa. $40B came into the  country within the first 8 mths of this year compared to $10B last year and only a fraction of this is oil money. Confidence in the Nigerian stock market is growing daily as people are reaping exponential gains.

We need to have a dedicated anti fraud unit that will work in tandem with special courts of the exchange. These courts will have a fixed maximum lenght of time within which to adjudicate. The NSE is too important to the economy for the Government not to.

I have said it before and it seems my predictions are coming to reality. Most of these banks are really crooked, please becareful !!! This is a story i found in the Guardian newspaper today.





   

   

   Monday, December 17, 2007

Govt worries over banks' style, practices

    * Ask EFCC, others to step in

By Enitar Ugwu

BANKS in the country may soon be in for questioning, judging by the number of petitions on the desk of President Musa Yar'Adua on their ethics.


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Indeed, not only are their corporate governance credentials being called to question, posers are being raised on the personal conduct of some executives. Exclusive information gathered by The Guardian shows that these petitions were woven around banks' involvement in practices such as:

    * laundering of money for governors;

    * involvement in round tripping;

    * buying of private jets by banks' bigwigs; and

    * accessing of bank loans for share buying.

      According to Presidency sources, the lifestyle of some bank executives has compelled shareholders to inundate the government with complaints and questions on what regulatory authorities are doing to verify whether some of the organisations are from the executives' private funds or shareholders' deposits. If shareholders' funds had been used, with whose approval?

      Some of the banks are saying that the private jets in question are not their personal property.

      One, for instance, informed The Guardian that the private jet is the property of his bank's asset management company.

      However, what is not clear is whether their acquisitions had the approval of the banks' shareholders.

      Even at that, the cost of the jets and mode of buying are yet unclear. Even so, the operational style of some of the banks has reportedly drawn the ire of the National Economic Intelligence (NEI) in addition to their handling of military pensions fund.

      The President is said to have referred the cases to the Central Bank of Nigeria (CBN).

      It was also gathered that the Economic and Financial Crimes Commission (EFCC) may be asked to look into some of these allegations such as banks' involvement in money laundering for governors.

      The CBN and other financial regulatory authorities such as Security and Exchange Commission (SEC), and Nigerian Stock Exchange (SEC) may also have been asked to take a look at banks' share purchases with a view to unravelling how some of their directors came about the huge funds they used in buying those shares.

      This scam has allegedly become rampant at this later stage of fund raising from the capital market by banks, owing to the CBN's resolve to slow down on the funds verification exercise for others.

      It would be recalled that it usually took up to six months for this verification exercise, prompting investors to call for a shorter period to enable them to access their investment.

      Sources said that the government worry is based on the need to avoid another round of bank distress.

      These developments are coming on the heels of the Federal Government's resolve to join the recently launched United Nations/World Bank Stolen Assets Recovery Initiative.

      This initiative is for the purpose of recovering substantial part of the nation's assets stashed away by present and past leaders with the assistance of banks.

      The initiative was launched last September by the World Bank, in partnership with the United Nations Office of Drugs and Crime (UNODC) to help developing countries recover assets stolen by corrupt leaders and invest them in effective, people-oriented development programmes.

      A source quoted the President as saying: "What I have done is to give the anti-corruption agencies like EFCC, ICPC, and the Code of Conduct Bureau the full support of government and total independence to act on any case of corruption."

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So, gurus in the house, what do you say to the current beerish regime in the stock market?