mendes911:


Keep loading Sir. Your money, your decision. ₦1.09 is your comfort zone, good for you. My own comfort zone is far below ₦1.00 (Doubt I would even buy this stock) and Q3 will give further guidance. I prefer prices that after making a trade, I could afford to close my eyes and go to sleep.

There is absolutely no price to guarantee sleep, you may wake up and see the floor price frozen with no bids for years...
I still hold Goldlink Insurance...

TLAX:


This comment is too sweeping and general. How do you know this for sure?

It is fallacy of the highest order. Hasty generalization. It lacks basis and credibility.

DeRuggedProf:


There is absolutely no price to guarantee sleep, you may wake up and see the floor price frozen with no bids for years...
I still hold Goldlink Insurance...

At least you can sleep with one eye opened. You do not need statin.

sellydion:


At least you can sleep with one eye opened. You do not need statin.

Lol

Concerning AIICO private placement, as an investor, why would I want to pay higher for the company shares when I can get it cheaper on the floor of the NSE?? The price is suppose to be at discount to the current market price except power is about to change hands in the company....

AIICO's shenanigan and other "jumanji" things by our corporate cow boys are the reasons why I can never invest my money long term in NSE...My slogan is rise and chop.... I always laugh at those who come here to preach such to uninformed rookies...

TLAX:


This comment is too sweeping and general. How do you know this for sure?

There are 196 active firms on the NSE and non is in profit YTD. The same is true for the inactive ones.


You wanna mention your Firm?

DeRuggedProf:


There is absolutely no price to guarantee sleep, you may wake up and see the floor price frozen with no bids for years...
I still hold Goldlink Insurance...

I once bought UNIONDAC in large quantity in 2009 at 75 kobo and went to sleep thinking it was a good sleeping price. It took me another 9 years to bail out at 39 Kobo just two or three weeks ago.

Coolcash1:
AIICO's shenanigan and other "jumanji" things by our corporate cow boys are the reasons why I can never invest my money long term in NSE...My slogan is rise and chop.... I always laugh at those who come here to preach such to uninformed rookies...

I never knew I have a longtermophobic brother here. Nice to discover you today.

Long term is risky in Nigeria.

Deadlytruth:


I never knew I have a longtermophobic brother here. Nice to discover you today.

Long term is risky in Nigeria.

I can still do 18months to 2 years max sha, depending on my entry price

Nigerian companies are frauds for all I care. The best companies in terms of returns have been the ones with significant foreign ownership by big foreign companies that less condone some sharp practices. Sharp practices will land them in hot soup in their home countries.


Corporate misgoverance is the reason why Nigerian companies sell at a huge discount to their assets.

Deadlytruth:


I never knew I have a longtermophobic brother here. Nice to discover you today.

Long term is risky in Nigeria.

Yes. The uncertainties in Nigeria can continue longer than anyone can remain solvent.

Coolcash1:
Concerning AIICO private placement, as an investor, why would I want to pay higher for the company shares when I can get it cheaper on the floor of the NSE?? The price is suppose to be at discount to the current market price except power is about to change hands in the company....

They cannot bring a demand for 4.4 billion shares to the market for a company that has only 6.9 billion shares with more than 50 percent in the hands of core owners. The price will shoot through the roof.

Dupeodus:


They cannot bring a demand for 4.4 billion shares to the market for a company that has only 6.9 billion shares with more than 50 percent in the hands of core owners. The price will shoot through the roof.

Will it not be to the advantage of retail investors you were rooting for Having only sizeable volume available for trading on the floor without compromising the minimum shares to be available as float is okay by me....Instead of going the route of pp, rights issue would have been cost effective and safer for shareholders...

austinkenneth:
Nigerian companies are frauds for all I care. The best companies in terms of returns have been the ones with significant foreign ownership by big foreign companies that less condone some sharp practices. Sharp practices will land them in hot soup in their home countries.


Corporate misgoverance is the reason why Nigerian companies sell at a huge discount to their assets.

It's the failure to install sanity in them by the regulators have made many to run away from the market and those of us still doing business in the market are sleeping with only one eyes closed

I have tried to convince a rich man to also divest its investment by investing in the capital market and he said no way! His reason is not far fetched from the weak governance, corporate shenanigans, market manipulation that we have all identified...

The truth is, if SEC decides to wield the big stick, only 5stocks will be existing on the NSE....

Deadlytruth:


I never knew I have a longtermophobic brother here. Nice to discover you today.

Long term is risky in Nigeria

this is the deadly truth

Deadlytruth:


I never knew I have a longtermophobic brother here. Nice to discover you today.

Long term is risky in Nigeria.

I no blame una

Coolcash1:


It's the failure to install sanity in them by the regulators have made many to run away from the market and those of us still doing business in the market are sleeping with only one eyes closed

I have tried to convince a rich man to also divest its investment by investing in the capital market and he said no way! His reason is not far fetched from the weak governance, corporate shenanigans, market manipulation that we have all identified...

The truth is, if SEC decides to wield the big stick, only 5 stocks will be existing on the NSE....

Agree. The real thieves in Nigeria are the corporate shenanigans. These guys steal more than many politicians.

SEC is a LAME DUCK.

We keep saying we want progress in this country, but how can we progress without good corporate governance.

Dupeodus:


They cannot bring a demand for 4.4 billion shares to the market for a company that has only 6.9 billion shares with more than 50 percent in the hands of core owners. The price will shoot through the roof.

This AIICO thing tire me. Let's all remember that these guys raised N11.9bn in 2007. What have they done with it?

I remember Zenth Bank rights issue taking place around 2007/2008 at N35. UBA did a public offer at N37. Ten years down the line we are not anywhere near breaking even on those losses. Not to talk about Intercontinental, Bank PHB etc Oceanic were the shares wen to ZILCH, ZERO.

Let's not forget Oando.

Now, what happened to all that money (In a supposedly tightly regulated banking industry).

Investors have been had by these shenanigans and they have all gone scot free.

Anybody thinking long term should check out Pa Ewumi calculations around 2009 about the long term returns of First Bank. The calcuations looked wonderful then .......But look at it now, all those returns have been heavily truncated in just the last few years.

Long term is a bad strategy in the NSE.

Coolcash1:


It's the failure to install sanity in them by the regulators have made many to run away from the market and those of us still doing business in the market are sleeping with only one eyes closed

I have tried to convince a rich man to also divest its investment by investing in the capital market and he said no way! His reason is not far fetched from the weak governance, corporate shenanigans, market manipulation that we have all identified...

The truth is, if SEC decides to wield the big stick, only 5stocks will be existing on the NSE....

In other words,
Gt bank
CCNN
Nestlé
Mandard
Afriprudent
D rest are full of nonsense n manipulation

"FOOD 4 THOUGHT"

Steve Jobs himself once said: "You've got to be willing to crash and burn.... If you're afraid of failing, you won't get very far."


https://www.bloomberg.com/graphics/2018-apple-at-one-trillion-market-cap/

COMMENTARY ON CBN's $8.1B REPATRIATION ORDER TO MTN
SOURCE: www.proshareng.com (abridged)

Perspective/Commentary – Thread by @yinkanubi

This is a thread to help people understand issues surrounding the recent fine imposed by CBN on 4 banks and the request they should refund $8.1 Billion in "illegally repatriated" dividends.

This issue first come into the open in Sept 2016 when Senator Dino raised a motion accusing MTN of illegal repatriation of $13.92 billion to its parent company through 4 banks between 2006 - 2016 with help of the Minister of Industry, Trade and Investment, Okey Enelamah.

Senate then mandated its Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign Exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others.

Minister of Communication Mr Adebayo Shittu warned Senate to Protect MTN and that the action could scare away investors, while Minister of Industry & Trade Dr. Okey Enelamah dismissed the allegations as baseless since he did not own any shares in MTN as alleged.

In one of the interesting testimonies, CEO of MTN NG, Mr. Moolman admitted it failed to comply with the law requiring issuance of CCI within 24hrs of conversion because it was a mere “administrative requirement”. I'll come to this later.

In Oct 2016, it was further reported (or rumored) that CBN had ordered stop of dividend payout to MTN NG. It seems this was the first hint of an investigation by CBN on this particular issue.

In Nov 2017, Senate eventually cleared MTN NG of the allegation of illegally repatriating $13.92 Billion and also exonerated Minister of Industry and Trade Dr. Enelamah of any wrong doing. We thought the matter was closed, but we were wrong.

FAST FORWARD TO 29th AUGUST 2018
CBN revealed that 4 banks (Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond bank) have been fined over N5b for their role in illegal remit of $8.1b dividend using “irregular” CCI in violation of the Foreign Exchange Act 1995 and the Foreign Exchange Manual. They were asked to "refund" the $8b.

WHAT DOES THE FOREX ACT/MANUAL SAY?
The Act (and memorandum 22 of the manual) prescribes that any foreign capital imported into Nigeria for purpose of investment must be converted to Naira within 24 hours of its arrival and Certificate for Capital Importation (CCI) issued by the authorized dealer i.e. Bank.

"Capital imported" can come in form of Cash or Equipment brought into the country. Either way, the requirements and process for CCI issuance is well spelt out in the Foreign Exchange act and manual.

SO WHAT IS THE CBN's CASE AGAINST THE BANKS AND MTN NG?
According to CBN, their investigation revealed the following:

1. That MTN NG shareholders invested and imported $402m in MTN Nigeria between 2001–2006. There seems to be no dispute about this from all parties.

2. That the investment was carried out through transfer of cash & importation of equipment evidenced by CCIs issued by the 4 banks. This means CCIs were issued to confirm MTN imported $402m into Nigeria. No dispute here as well.

3. That CCIs issued by the banks showed $59m out of the $402m was invested as Shareholders Loan while $343m came in as Equity. How did CBN know this? Because when CCIs are issued, you have to indicate whether it is for “Loan”, or “Equity”.

4. That a review of 2007 MTN financials revealed that instead of No. 3 above, what they found was $399m shareholders loan & $2.9m Equity in accordance to their Shareholders agreement but not in accordance with the CCIs. Is this unusual and evidence of fraudulent misrepresentation? Not really. The bank could have made an honest mistake of ticking the wrong box on the CCI even though this is very unlikely because they should have acted on instructions contained in MTN's Board Resolution.

5. That, following a request by Standard Chartered Bank (SCB) to convert the shareholders loan to Preference Shares, an approval-in-principle was issued by CBN subject to final approval on these conditions –

a). Implementation of decision in item 5B of their Board Resolution and
b). Undertaking that no remittance will be made to shareholders in form of interest/principal payments from date of the loan to date of conversion. Was this undertaking implied or in writing? We don’t know. Whichever way, it seems SCB ignored it.

6. Question: Why did CBN feel the need to issue an approval in-principle? Probably because the shares were to be converted to preference shares, which still ‘feels’ like a debt. When you think preference shares, think “Hybrid”. Now, this kind of conversion is not unusual but CBN obviously saw enough in the MTN NG board resolution authorizing conversion to make them want to wait for evidence of implementation before giving final approval.

7. This is where it gets murky. CBN claims that in spite of non-fulfillment of conditions it gave, MTN went ahead to convert the loans to preference shares and SCB issued CCIs in respect of the "illegal” conversion. Note use of the word "illegal".

8. Sometime in 2009, CBN queried SCB on CCI issued on this “illegal Conversion”. SCB in a reply dated 10 Dec 2009, acknowledged to CBN that it was an “unintended omission”. Nonetheless, on account of this CCI, MTN was able to remit $8Bn between 2007-2015.

9. Having concluded investigation, CBN ordered the banks to refund to it the $8.1Bn that was “illegally repatriated”. Does this mean the money belongs to CBN? No. CBN is only asking for return of its USD in exchange for the Naira MTN gave in return.

10. Now this is where it gets interesting. If MTN returns the $8.1 billion its shareholders already collected and CBN returns back to them the Naira it got in exchange, MTN could lose up to N2Trillon in the process. Do the Math and compare the $/N rate in 2007–2015 to the rate today. At the end of the day, the real negotiation (and there will be a negotiation) will be about justification of this differential and not the entire $8.1b. Will it be a 2-way negotiation between the banks and CBN or a 3-way negotiation with MTN NG included? We wait.

SUMMARY
1. It's a "refund" not a "forfeit". If the trade of $8b is executed, MTN NG will get back its Naira while CBN gets back its dollars. Meaning that in actual fact, the refund is going back in the books of MTN NG.

2. CCIs are issued by Banks and not CBN. Are there consequences for this move by CBN? Oh Yes! It'll make many investors take notice. The reality is that many investors have always played fast and loose with the rules.

I know for a fact there have been frantic calls from major world capitals to their Nigeria CFOs to be sure they are on solid footing. It is also likely banks will be more careful going forward, to ensure compliance with rules on capital importation.

It is instructive that compared to MTN NG, reactions of the indicted banks (Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond bank) has been relatively measured. Could well be they don’t want to take on their regulator, or it could mean they know they are in the wrong.

This movie is far from over. It is just getting started. This is not THE END.

austinkenneth:


This AIICO thing tire me. Let's all remember that these guys raised N11.9bn in 2007. What have they done with it?

I remember Zenth Bank rights issue taking place around 2007/2008 at N35. UBA did a public offer at N37. Ten years down the line we are not anywhere near breaking even on those losses. Not to talk about Intercontinental, Bank PHB etc Oceanic were the shares wen to ZILCH, ZERO.

Let's not forget Oando.

Now, what happened to all that money (In a supposedly tightly regulated banking industry).

Investors have been had by these shenanigans and they have all gone scot free.

Anybody thinking long term should check out Pa Ewumi calculations around 2009 about the long term returns of First Bank. The calcuations looked wonderful then .......But look at it now, all those returns have been heavily truncated in just the last few years.

Long term is a bad strategy in the NSE.

I understand ur reservation and view to thinker on the side of caution.
...however, the difference between AIICO and the other cases u mentioned is that the former is going to be via a special placement.
Like I said before, On AIICO we see an immense inherent VALUE/OPPORTUNITY !! ...In cases like these, It's usually only a small matter of TIME before price reprises to reflect current reality.
There is a reason why they have decided not to come for our money. ...instead, opting for a special placement at near 60% ABOVE market price.
So 1st, we will look to benefit/reap from that 'gap'
Like I always tell folks;
"One of the most powerful weapon of SUCEESS or failure within the stock market is with the ability to take advantage of the 'gap' between current perception and REAL VALUE.
...knowing how and when to align with that 'gap' is the core 'survival mark' of a WINING INVESTOR !!"

Even if u consider the effect of dilution by adding the proposed new shares, AIICOs Fair Value comes in relatively flat and WILL still be grossly UNDERPRICED !!
A simple computation;
Previous OS= 6.93B
No of new shares to be raised= 4.4B
New OS post offer= 6.93 + 4.4=11.33B
Value of new fund injection= 4.4 x N1.20= 5.28B
Current shareholders fund based on their Q2 2018 result(which by the way, should've been higher)= approx 13B
Therefore shareholders fund post special placement= 13 + 5.28 = 18.28B
Hence BVPS post offer= 18.28/11.33= 1.61
...which is still an over 96% premium to the current mkt price.
EPS will also come in slightly higher post offer.
Assuming a zero % growth for H2 2018, and using TTM EPS of 31k @ 14%, AIICO should sell for NO less than N2.15

Disclaimer: NOT a BUY recommendation !!

Coolcash1:
Concerning AIICO private placement, as an investor, why would I want to pay higher for the company shares when I can get it cheaper on the floor of the NSE?? The price is suppose to be at discount to the current market price except power is about to change hands in the company....

those buying knows the system and goodies inherent. little wonder is never in the interest of these ceos to keep their share price up and stable. there's always a loophole at the back door to fleece the company.

austinkenneth:


Agree. The real thieves in Nigeria are the corporate shenanigans. These guys steal more than many politicians.

SEC is a LAME DUCK.

We keep saying we want progress in this country, but how can we progress without good corporate governance.

Boils down to the greed and myopia of Nigerians

Too much wickedness, malpractice and sharp dealings

Deadlytruth:


I once bought UNIONDAC in large quantity in 2009 at 75 kobo and went to sleep thinking it was a good sleeping price. It took me another 9 years to bail out at 39 Kobo just two or three weeks ago.

chi neke le, God of nazarene

austinkenneth:


This AIICO thing tire me. Let's all remember that these guys raised N11.9bn in 2007. What have they done with it?

I remember Zenth Bank rights issue taking place around 2007/2008 at N35. UBA did a public offer at N37. Ten years down the line we are not anywhere near breaking even on those losses. Not to talk about Intercontinental, Bank PHB etc Oceanic were the shares wen to ZILCH, ZERO.

Let's not forget Oando.

Now, what happened to all that money (In a supposedly tightly regulated banking industry).

Investors have been had by these shenanigans and they have all gone scot free.

Anybody thinking long term should check out Pa Ewumi calculations around 2009 about the long term returns of First Bank. The calcuations looked wonderful then .......But look at it now, all those returns have been heavily truncated in just the last few years.

Long term is a bad strategy in the NSE.

may be milost has a point

Alaadin:

this is the deadly truth

Na so o!

Agbalowomeri:

I can still do 18months to 2 years max sha, depending on my entry price

Can you buy and do 18 months with Diamond it this current state of it?

DeRuggedProf:


There is absolutely no price to guarantee sleep, you may wake up and see the floor price frozen with no bids for years...
I still hold Goldlink Insurance...

As a trader (ultra trader for that matter), a price I can buy a stock and go to sleep are those prices that will make me not want to check prices the following day!

Am not amongst you, Bigjay or Wanaj0. LOL

Ugosample:


I no blame una

Blame experience.
I once bought and longtermed AFRIBANK and BANK PHB only to wake up one day to see them nationalized by SLS 33 days to the deadline which he himself earlier on set for them to recapitalize.
When asked why he didn't wait for his own set deadline the guy claimed he discovered they wouldn't be able to meet beat it even if he waited it out. See answer? Meanwhile they had already found some interested foreign investors.
The aggrieved share holders went to court but SLS never showed up for any hearing. They called on GEJ for executive intervention but that one just dey flex for one corner for Aso Rock. Him no even send them. Last last the matter just end and all shareholders' funds enter voicemail till today. My saving grace was that my units of shares in those two banks were such that I could afford to give as a gift without shaking.
Wetin eye never see for inside this long term matter? Long term is long throat in Nigeria.