Godlylifeoneart:
EMERGING MARKETS AT THE MERCY OF MANY
....dz is a Plagiarized article

What Italy’s debt issue and China’s counter-trade-war efforts could mean for NIGERIA
As far removed as countries like Italy, China and Turkey may appear to be from Nigeria , the local economy has been, and will likely continue to be, negatively impacted by the wide array of seemingly unrelated market issues – such as Italy’s debt woes and China’s retaliatory reaction to the US trade war – through a contagion effect.

Financial markets in Nigeria are particularly vulnerable because of their depth and high level of liquidity. While investor jitters started in Turkey and Argentina, where economic mismanagement was evident, financial markets in these countries are not as deep and liquid as Nigeria , which have been targeted in the latest risk-off episode by the FPI. It is therefore far easier for investors to get out of positions in these tradeable markets, and as a result, our local economy is impacted.

The relative ease of exiting positions in Nigerian financial markets, is why Nigeriancitizens are negatively impacted in an emerging market-wide risk-off episode. When the currency sells off in response to investor fears, the Naira becomes cheaper against major currencies. Sustainable currency depreciation can have a negative effect on inflation outcomes and this could lead to a rise in interest rates if inflation threatens to exceed the 11 to 14% target band for an extended period of time.

In Italy, debt concerns present a risk to global financial markets given the interlinkages between Italian banks and a number of other economies. Should Italy default on its debt, it would create uncertainty in the markets given Italy’s size and interconnectedness.

In a risk-off environment, investors actively seek out less risky assets. Capital tends to stay at home rather than find its way into riskier markets – which is what Nigeria is currently perceived to be – as a precaution to prevent potential losses.

Out of all of the emerging markets, China is likely to impact the Nigerian economy the most in this respect. China is one of Nigeria's largest trading partners, and if Chinese growth softens and demand slows, it would likely diminish Nigeria ’s exports to the region.(25 cargoes of Nigeria oil awaits buyers) link not available

China is also a key user of global commodities and Nigeria is a net exporter of commodities(crude oil) . If China’s demand for commodities drops, the price of commodities that Nigeria supplies to the rest of the world could drop, triggering a negative terms-of-trade (export prices relative to import prices) shock.

While conceding that the Naira (most defended currency in Africa) is likely to remain on the back foot if uncertainty in these emerging markets persists I could warn investors against making any impulsive investment decisions. The reality is that as long as global investors paint all emerging markets with the same brush and remain hesitant to get back into risk assets, the Naira could suffer.

However, for investors with well-diversified portfolios and long-term investment goals, this is the worst time to start moving things around. The best thing that Nigerians can do to protect their investments from these market fluctuations and the current high level of global uncertainty is to stay calm and prevent making rushed short-term decisions.

Mpeace:
Make I hep u with picture.

swilo:
can one say Access result is better than UBA?

longlife20:
http://www.nse.com.ng/Financial_NewsDocs/23969_ACCESS_BANK_PLC._FINANCIAL_STATEMENTS_OCTOBER_2018.pdf

Yayira:



OGG can you please help on all these reports ?
I know say na only you fit break things down to layman’s understanding..
I’ll benefit greatly from it and I know some people will too.

Just hint on
1) Profit/loss
2) Growth
3) Fair price

Feel free to add another important ones

I hope not too much of a work

mendes911:
In DeepSuk's voice, "Honey" Flour haff turned to "Hor.ny" Flour....

Godlylifeoneart:
EMERGING MARKETS AT THE MERCY OF MANY
....dz is a Plagiarized article

What Italy’s debt issue and China’s counter-trade-war efforts could mean for NIGERIA
As far removed as countries like Italy, China and Turkey may appear to be from Nigeria , the local economy has been, and will likely continue to be, negatively impacted by the wide array of seemingly unrelated market issues – such as Italy’s debt woes and China’s retaliatory reaction to the US trade war – through a contagion effect.

Financial markets in Nigeria are particularly vulnerable because of their depth and high level of liquidity. While investor jitters started in Turkey and Argentina, where economic mismanagement was evident, financial markets in these countries are not as deep and liquid as Nigeria , which have been targeted in the latest risk-off episode by the FPI. It is therefore far easier for investors to get out of positions in these tradeable markets, and as a result, our local economy is impacted.

The relative ease of exiting positions in Nigerian financial markets, is why Nigeriancitizens are negatively impacted in an emerging market-wide risk-off episode. When the currency sells off in response to investor fears, the Naira becomes cheaper against major currencies. Sustainable currency depreciation can have a negative effect on inflation outcomes and this could lead to a rise in interest rates if inflation threatens to exceed the 11 to 14% target band for an extended period of time.

In Italy, debt concerns present a risk to global financial markets given the interlinkages between Italian banks and a number of other economies. Should Italy default on its debt, it would create uncertainty in the markets given Italy’s size and interconnectedness.

In a risk-off environment, investors actively seek out less risky assets. Capital tends to stay at home rather than find its way into riskier markets – which is what Nigeria is currently perceived to be – as a precaution to prevent potential losses.

Out of all of the emerging markets, China is likely to impact the Nigerian economy the most in this respect. China is one of Nigeria's largest trading partners, and if Chinese growth softens and demand slows, it would likely diminish Nigeria ’s exports to the region.(25 cargoes of Nigeria oil awaits buyers) link not available

China is also a key user of global commodities and Nigeria is a net exporter of commodities(crude oil) . If China’s demand for commodities drops, the price of commodities that Nigeria supplies to the rest of the world could drop, triggering a negative terms-of-trade (export prices relative to import prices) shock.

While conceding that the Naira (most defended currency in Africa) is likely to remain on the back foot if uncertainty in these emerging markets persists I could warn investors against making any impulsive investment decisions. The reality is that as long as global investors paint all emerging markets with the same brush and remain hesitant to get back into risk assets, the Naira could suffer.

However, for investors with well-diversified portfolios and long-term investment goals, this is the worst time to start moving things around. The best thing that Nigerians can do to protect their investments from these market fluctuations and the current high level of global uncertainty is to stay calm and prevent making rushed short-term decisions.

Yayira:



OGG can you please help on all these reports ?
I know say na only you fit break things down to layman’s understanding..
I’ll benefit greatly from it and I know some people will too.

Just hint on
1) Profit/loss
2) Growth
3) Fair price

Feel free to add another important ones

I hope not too much of a work

onegentleguy:



At 1st glance, good but not a great performance from ACCESS. ...indicators showed a mixed performance.
As expected, Profit margin was majorly driven by trading gains from the fixed income space.
PBT actually went down by near 3.6% over the 9M period... however, a much lower effective tax rate helped aid their profit line by approx 11.5% to over 62.9B from near 56.4B in the corresponding period of last yr.
A few other KEY indices also saw a slight improvement but EPS actually droped by over 38% from N1.12 to 69k for the period btw July to September 2018 (Q3 alone)
However, this line together with the banks ROAE, ROAA and EM still prints of an improvement over the 9M period ended Sep, 2018.
In my opinion, the bank will need to rework their profitability line to push for a better earnings yield going into last quarter of the yr.
But overall, the bank showed a noticeable growth in their TOPLINE.


Using a TTM EPS of N2.18 over an adjusted discount rate of 14% (I prefer to attach a 1% premium to a risk free rate of 13% given their current financial indices), Fair Value should compute as N15.50 !!
...which is an approx 82% discount to today's closure price of N8.50 !!... and so ACCESS remains a BUY from my end.

However, on a P2P comparison, i'll still prioritize UBA and ZENITH ahead of ACCESS... but ACCESS ahead of GTB and FIRST BANK given their current market prices. ...though this scale of preference can change as their prices swing either upwards or downwards going forward.
But that's just me... so not an interpretation to any sought of recommendation.

CAVEAT: Due diligence should still remain ur 1st priority !!

currentprice:


In my own opinion based on the numbers reported ACCESS is the cheapest bank among tie 1 bank

Selling at 160 % discount.

Fair price from my bedsheet is N21 based on Q3 alone.

I pointed out this bank week ago as Bank to WATCH!!!

Cc druggedprof

onegentleguy:



At 1st glance, good but not a great performance from ACCESS. ...indicators showed a mixed performance.
As expected, Profit margin was majorly driven by trading gains from the fixed income space.
PBT actually went down by near 3.6% over the 9M period... however, a much lower effective tax rate helped aid their profit line by approx 11.5% to over 62.9B from near 56.4B in the corresponding period of last yr.
A few other KEY indices also saw a slight improvement but EPS actually droped by over 38% from N1.12 to 69k for the period btw July to September 2018 (Q3 alone)
However, this line together with the banks ROAE, ROAA and EM still prints of an improvement over the 9M period ended Sep, 2018.
In my opinion, management will need to rework their profitability line to push for a better earnings yield going into the last quarter of the yr.
But overall, the bank showed a noticeable growth in their TOPLINE.


Using a TTM EPS of N2.18 over an adjusted discount rate of 14% (I prefer to attach a 1% premium to a risk free rate of 13% given their current financial indices), Fair Value should compute as N15.50 !!
...which is an approx 82% discount to today's closure price of N8.50 !!... and so ACCESS remains a BUY from my end.

However, on a P2P comparison in the 1st tier banking space, i'll still prioritize UBA and ZENITH ahead of ACCESS... but ACCESS ahead of GTB and FIRST BANK given their current market prices. ...though this scale of preference can change as their prices swing either upwards or downwards going forward.
But that's just me... so not an interpretation to any sought of recommendation.

CAVEAT: Due diligence should still remain ur 1st priority !!

swilo:
Funny thought,

A negative (-ve) PE is supposed to be lower than a positive (+ve) PE. I wonder why people don't jump at stocks with negative (-ve) PE.

Agbalowomeri:


Oga where you go school?

#Na Joke o

swilo:


OGG Thanks a lot. I value your analysis greatly.

One clarification, is the EPS annualized? If not, then TTM EPS may have moved higher slightly.

currentprice:


Access Q3 numbers not annualised brov.

with this Q3 result Access already covered the whole financial year EPS of last year. Going forward the last Q3 is jaraa

Agbalowomeri:


CP you really have confidence in all these banks sha

Agbalowomeri:


CP you really have confidence in all these banks sha

swilo:


OGG Thanks a lot. I value your analysis greatly.

One clarification, is the EPS annualized? If not, then TTM EPS may have moved higher slightly.

onegentleguy:


No, EPS is not annualized.
However, the slowness in effective earnings yield and the over 38% drop in EPS in the last quarter (btw July to Sep, 2018) is a course for some concern.
When this sought of drop exceeds a 20% margin, stability in growth is called into question. ...and so it makes some sense to not throw caution to the gallery.

But like I said before, ACCESS BANK remains a BUY. ...current market price still screams of an immense VALUE behind it.
Without a doubt, the coy is UNDERVALUED. ...there's a fine 'gap' to tap from at the present price.
That said, there is a need to be cautiously optimistic going forward.

onegentleguy:


No, EPS is not annualized.
However, the slowness in effective earnings yield and the over 38% drop in EPS in the last quarter (btw July to Sep, 2018) is a course for some concern.
When this sought of drop exceeds a 20% margin, stability in growth is called into question. ...and so it makes some sense to not throw caution to the gallery.

But like I said before, ACCESS BANK remains a BUY. ...current market price still screams of an immense VALUE behind it.
Without a doubt, the coy is UNDERVALUED. ...there's a fine 'gap' to tap from at the present price.
That said, there is a need to be cautiously optimistic going forward.

stcool:


Your analysis is so sweet to the belly. You know the thing inside-out.

onegentleguy:


No, EPS is not annualized.
However, the slowness in effective earnings yield and the over 38% drop in EPS in the last quarter (btw July to Sep, 2018) is a course for some concern.
When this sought of drop exceeds a 20% margin, stability in growth is called into question. ...and so it makes some sense to not throw caution to the gallery.

But like I said before, ACCESS BANK remains a BUY. ...current market price still screams of an immense VALUE behind it.
Without a doubt, the coy is UNDERVALUED. ...there's a fine 'gap' to tap from at the present price.
That said, there is a need to be cautiously optimistic going forward.

currentprice:


Access bank earning yield actually rise by 37% in EPS btw July to Sept 2018 compare to that of 2017 same period.

every bank have trading income not only access, WEMA have about 40% trading income in their latest report

stcool:


Your analysis is so sweet to the belly. You know the thing inside-out.

veecovee:
Fide...