@all, don't take today's trade as a sign of any reversal on NSE. I just believe that it's giving opportunity for some guys to recoup their lost cash and not necessarily for some1 to go all out and take position except your RISK APETITE is HIGH. My 1 cent.

Like I said last week, i predicted starting from yesterday that Market wud likely return green owing to majority of stocks trading below 52wks low and not on any other analysis, macroeconomic or socio political-fundamentals. I don't agree with myjoy08 position above.

myjoy08:


Sir, all i can say is that buy whatever u want to buy now before is too late. Don't tell me a stock with eps of 98 kobo as at 3rd quarter and trading around 2-3 naira with dividend expectations of 35-45 kobo will remain in that junction in the next 30 days? Do your home work and see for yourself. Foreign investors are coming back and will take position and sell back with premium to u guys. My simple and personal opinion not a recommendation...


Remember, no risk no reward!

Sir, What stock are U referring to pls, just for ur followers' clarification, Thanks

cadno:

Sir, What stock are U referring to pls, just for ur followers' clarification, Thanks

Sir, about 2-3 stocks fall into this category. Research it a little bit and if you are not clear, i will tell you

myjoy08:


Sir, about 2-3 stocks fall into this category. Research it a little bit and if you are not clear, i will tell you

Just say it at once

UBA
Diamond
FBNH/FCMB
Transcorp
no?

otokx:


Just say it at once

Gbam u spoke my talk. Oga my joy ansa joor

Krisuba:

Gbam u spoke my talk. Oga my joy ansa joor

Let me give you some tips...

UBA
FCMB
SKYE,

2 of them are among the listed one above, and research on the rest (Not a banking stock)...lol

Myjoy08 don come. You need to be more cautious with your optimism

bigass:
Myjoy08 don come. You need to be more cautious with your optimism

Madam Big, this is my opinion not a recommendation to buy any of those; so the issue of don come should not arise in case there is any decisions made by any of our brothers/sisters in the house on the stocks listed.

myjoy08:


Sir, all i can say is that buy whatever u want to buy now before is too late. Don't tell me a stock with eps of 98 kobo as at 3rd quarter and trading around 2-3 naira with dividend expectations of 35-45 kobo will remain in that junction in the next 30 days? Do your home work and see for yourself. Foreign investors are coming back and will take position and sell back with premium to u guys. My simple and personal opinion not a recommendation...


Remember, no risk no reward!

Very correct.
This market is a buyers market. So many stocks with good fundamentals are beaten to the ground. Contrarian investors are spoilt for choice. Which one to pick, which one to drop.

It feels like a kid in a candy store. Too much of a good thing creates confusion.

The only small problem is will all these companies post pre-$1:N160 type of earnings in a $1:N220-N250 world?The current naira depreciation may sink some companies with excessive import inputs, and heavy dollar/Euro denominated debt.

Companies some large import inputs who produce goods, with little or no alternatives, and with little competition will successfully pass on the cost to their customers (NASCON, Dangote Sugar, etc). Hence they will bounce back

Banks are worst hit in this market, and understandably so. Many have large portfolio of foreign denominated bonds and other debts. Some are highly exposed to petroleum sector debts. If the foreign debtors call in the debts they are in trouble. If the heavy indebted petroleum customers default, and are too highly connected politically to make recovery difficult, the banks who serviced them will go down as well. That is why one has to be very careful with the banks. There is a reason why UBA is so heavily hammered down to N3, while UBN still stuck in their pre-consolidation archaic ways is staying high at >N8.

If you must play the banks, stay with banks with good fundamentals, strong governance structure, and history of healthy returns (div). Apart from obvious FBHN, GTB, Zenith and Diamond are sure bets to recover fast in NSE and still deliver good returns in 2014 yr end.

More analysis later as a separate post.

@cuteboy,
hv u nt heard dt fbn is d most exposed to oil sector loans? diamond hand kakaraka for dividend.gtb and zenith are for d big boys and risk averse investors as it cant do much magic in price.

If am to buy frm ur stocks under consideratn,i will buy d cowboys-UBA. They know how to move the price with or witout result when they want to.

look for a stock dt has lost d most in this bear period and buy after discounting some factors.

nascon gave me my first hit on nse.
Sweet memories

mercylicious:
@cuteboy,
hv u nt heard dt fbn is d most exposed to oil sector loans? diamond hand kakaraka for dividend.gtb and zenith are for d big boys and risk averse investors as it cant do much magic in price.

If am to buy frm ur stocks under consideratn,i will buy d cowboys-UBA. They know how to move the price with or witout result when they want to.

look for a stock dt has lost d most in this bear period and buy after discounting some factors.

Below is the list of Top 10 Nigeria Bank with exposure to oil and gas sector...


Breakdown as at 2014 Q3

1. First Bank – 40 per cent,

2. GTBank -28 per cent,

3. Fidelity Bank – 28 per cent)

4. Skye Bank – 27 per cent,

5. Access Bank – 25%

6. Diamond Bank -25%.

7. Zenith Bank -18%

8. Ecobank -18%

9. United Bank for Africa -16%

10. First City Monument Bank 14%.


References: http://asokoinsight.com/news/investors-weigh-banks-exposure-oil-slump-echo-2009-crises-nigeria/

http://nairametrics.com/

I wouldn't fret over First Bank exposure to Oil sector...............

angelo82:
I wouldn't fret over First Bank exposure to Oil sector...............

The post was not posted to derail investors or traders decision in buying FBNH but to clarify what Oga Cuteboy is saying. FBNH is one of my holdings so nothing they happen sir.

bigass:
Myjoy08 don come. You need to be more cautious with your optimism

@bigass. Indeed. Precisely, my point on these banks. One needs to be careful.

However, one has to define ones strategy, investment goals and time frame.
Once that is done, then pick stocks that fit these objectives, and monitor. Once you realise your objectives, simply exit. No sentiments.

mercylicious:
@cuteboy,
hv u nt heard dt fbn is d most exposed to oil sector loans? diamond hand kakaraka for dividend.gtb and zenith are for d big boys and risk averse investors as it cant do much magic in price.

If am to buy frm ur stocks under consideratn,i will buy d cowboys-UBA. They know how to move the price with or witout result when they want to.

look for a stock dt has lost d most in this bear period and buy after discounting some factors.

Well said. This is the basic difference between the fundamental analysis story that the poster before you was quoting, and the pragmatism of technical analysis. Nobody gives a fuc** about forward or backward EPs, dollar debts or dollar dependent imports. Its all about who can move their price up fastest and when! Savy traders in Nigeria have little regard for fundamental analysis. That's why a useless company like Ikeja hotel was among the best performers on the NSE last year.

mercylicious:
@cuteboy,
hv u nt heard dt fbn is d most exposed to oil sector loans? diamond hand kakaraka for dividend.gtb and zenith are for d big boys and risk averse investors as it cant do much magic in price.

If am to buy frm ur stocks under consideratn,i will buy d cowboys-UBA. They know how to move the price with or witout result when they want to.

look for a stock dt has lost d most in this bear period and buy after discounting some factors.

On FBHN: Sure, I know about their Petroleum sector exposure, but most of it is for upstream oil business which is more robust and sustainable business, than the many fly-by-night briefcase fuel importers. Exposure to downstream is well within thier risk capability - just a few of the good things Sanusi Lamido put in place as Head of Risk at FBN, before moving to CBN.

Compare their petroleum portfolio to that of the likes of Unity Bank (mostly product importers). They had to take newspaper adverts to beg their debtors to come and settle. The big boys among, also took their own full page adverts telling Unity to go to the moon, that it is actually the bank that owes them . They also called their SANs to dust up their briefs.

The difference between FBN and the likes of Unity is the strength and size of the balance sheet, and how much shock they can take without going under. Remember during the early days of telecom sector privatization, FBN financed IIL purchase of Nitel. The deal went sour, and FBN took a massive hit. Then Bernard Longe was the MD. It cost him his career. The financial world was amazed at how quickly FBN shook off that lose in a few quarters and still declared profit and dividend. Smaller banks would not have survived the IIL fiasco.

UBA is OK oooooo. I like their spin offs even better, UBA Cap and Afriprudential Registrars, since these businesses are pure play, and balance sheets are more transparent. And, off course, they have excellent dividend yield even at 2013/2014 prices. So also Skye bank @ N2. Just depends on your investment strategy and time frame.

Diamond is an excellent pick @N3.6. When it recovers, it must chase N12. Div policy & yield history also excellent.

mercylicious:
nascon gave me my first hit on nse.
Sweet memories

Are you telling me?!!!!! . The div alone kept me smiling for days....

I gobbled NASCON up once when it was beaten down. I was shocked that a stock that pays 90k div, was ignored by people when the price sagged to N4-5. It has remained a darling in my portfolio ever since.

Up till tomorrow morning, pharmaceuticals and food processing companies cannot do without salt. Same thing with sugar (DangSugar).

This is how Warren Buffet invests.

People will always shave every morning, so he buys Gillette.
People will always buy insurance, so he looked for one that is well managed, has good product mix, and the price was beaten down, so bought Geico.

Ditto for Washington Post.

I am very happy today because wits talked enough and i am able to see knowledge cum reality based on experience. I personally learnt from wonderfully put intelligent talk.Kudos to you all!

@cuteboy2
Have you read buffetology or financial security?

cuteboy2 must be a personality who has been on this platform for long but just changed his moniker.I liked the way you nailed all those salient fact out.

well what i observed is,the foreign investors are now coming in after their market over there has reached peak and its seems correction is needed as even the Greece fall may quickly bring and having peep at our bourse they saw massive cheapness and this is what made them to make a come back inspite of the tension in our political space and devaluation noise of our currency. At this point,they believed the election would go smoothly on March 28 and the market has taken into consideration of the noise of our currency unstableness and heated polity and these would be the comfortable fact they are finding their way into our Bourne again.But will happened to our bourse should election being posted for rumoured six months again and possibility of naira being floated naturally at #270 at bdc cum blackmart. Here is my own humble opinion can any help me in clarifying these chaotic perspective thought of mine.Thanks.

cuteboy2:


On FBHN: Sure, I know about their Petroleum sector exposure, but most of it is for upstream oil business which is more robust and sustainable business, than the many fly-by-night briefcase fuel importers. Exposure to downstream is well within thier risk capability - just a few of the good things Sanusi Lamido put in place as Head of Risk at FBN, before moving to CBN.

Compare their petroleum portfolio to that of the likes of Unity Bank (mostly product importers). They had to take newspaper adverts to beg their debtors to come and settle. The big boys among, also took their own full page adverts telling Unity to go to the moon, that it is actually the bank that owes them . They also called their SANs to dust up their briefs.

The difference between FBN and the likes of Unity is the strength and size of the balance sheet, and how much shock they can take without going under. Remember during the early days of telecom sector privatization, FBN financed IIL purchase of Nitel. The deal went sour, and FBN took a massive hit. Then Bernard Longe was the MD. It cost him his career. The financial world was amazed at how quickly FBN shook off that lose in a few quarters and still declared profit and dividend. Smaller banks would not have survived the IIL fiasco.

UBA is OK oooooo. I like their spin offs even better, UBA Cap and Afriprudential Registrars, since these businesses are pure play, and balance sheets are more transparent. And, off course, they have excellent dividend yield even at 2013/2014 prices. So also Skye bank @ N2. Just depends on your investment strategy and time frame.

Diamond is an excellent pick @N3.6. When it recovers, it must chase N12. Div policy & yield history also excellent.

But there is this one vague fact that diamond don't have track record of paying dividend consistently irrespective of What net profit they made.So in this time,those hoping diamond must pay,diamond may not pay at all or pay unattractive dividend.When it comes to consistent dividend payment for banks,they are Gtb, Zenith and Fbnh.

immanuello:
But there is this one vague fact that diamond don't have track record of paying dividend consistently irrespective of What net profit they made.So in this time,those hoping diamond must pay,diamond may not pay at all or pay unattractive dividend.When it comes to consistent dividend payment for banks,they are Gtb, Zenith and Fbnh.

If you want to take advantage of the Bear market then Diamond Bank is a good punt to ride on. You'll make more returns from the capital appreciation over the next 12 months than from any uncertain 0.50k or 0.60k dividend declaration.

One shrewd method of investing by the contrarian investor is to study the Volatility Index of the (Nigerian) Stock Market. This will help to gauge the market sentiment to determine the price direction based on market volatility. Punters always make their money during periods of market volatility. That is why its always wise to buy shares that are liquid or can be easily bought and sold on the bourse, if not you'll find yourself trapped with some certain stock in your hands when the market volatility kicks in. Market makers mainly trade on 'blue chip' liquid stock, stock that has large outstanding volumes.

Get your flawless and fresh verified foreign paypal account (Australian, United Kingdom and Malaysian verified paypal account) for only N20k...we also do instant paypal funding http://conimo.info/paypal.html

One of the things i learned about life is that not everything will go as one expect in ones life...this is why one need to drop over expectations, and go with the flow of life. This applies to stock market (and business world we live in) as well. Don't expect too much, just go with the flow of the market and work with the best method that suite your investments objectives.

@cuteboy2- Very good analysis but you failed to mention the effect of rising brent crude in your analysis ALSO i quoted this from your write-up "Many have large portfolio of foreign denominated bonds and other debts. Some are highly exposed to petroleum sector debts. If the foreign debtors call in the debts they are in trouble". These kind of equity forms the bulk of banks Tier 2 capital which has defined terms and agreement on return, tenor, rate etal (irrspective of staus of P&L of the institution) which is 'sacrosanct'(latest terminology in town) so on no occasion will any investor call in their investment b4 due date.

the male cattle land for market, irregular frequency follows...when the bear returns they doubt their principles and start shifting goal post

Afo1k:
the male cattle land for market, irregular frequency follows...when the bear returns they doubt their principles and start shifting goal post

LMAOOOOOOO

What's wrong with FCMB nah?

@Mr Immanuello; Your NEM is delivering o I hear NEM is a trader's delight. I hope you have not booked profit at 4% again?

@Cuteboy; Feeling your analysis backed picks