What is happening to UNIC It's been dropping fast.

Anyone with any news or theories?

easimoni:

That wouldn't be because of the 8.6B 1Q PAT no shaking graciously shared with us?   . It's very impressive. Shows they are on their way to N30B at FY. But let's not forget that they are setting us up for the N250B offer and 5B new shares will push the forward EPS to just under N2.

Not many banks  will come even close to achieving a forward EPS of nearly N2.00 Zenith  bank is the biggest bank in Nigeria by market cap as we have been made to believe

I can only draw one conclusion from these spate of PO/IPO's with all these banks outdoing one another to approach the capital market to raise capital for one reason or the other(from the sublime to the ridiculous) i think we will have less than 25 banks in 2 years' time with some of those who cannot compete being gobbled up(with little help from foreign equity firms) and the banks that are left standing falling into either the premier or division one category and then you can expect the big boys from overseas to start showing their hands that is when the MEN will be separated from the BOYS so things are looking interesting at the moment

So the banks are basically strategizing to position themselves for the next round of  consolidation this is not going to be as a result of any directive it will just be the logical thing to happen

You have  heard  it on N'land so be ready to take off on the B of the Bang without making a false start!

easimoni:

That wouldn't be because of the 8.6B 1Q PAT no shaking graciously shared with us? . It's very impressive. Shows they are on their way to N30B at FY. But let's not forget that they are setting us up for the N250B offer and 5B new shares will push the forward EPS to just under N2.

easimoni i see you have changed your tune well i suppose HOLDING fire is probably the way to go as far as WEMA is concerned i have a sneaky feeling there is still one more twist in this WEMA soap opera so we are just about ready for the good 'news' those guys have yet to show their hands

forget ZEnith ooo they be whinch.

My source at Zenith told me they make about 3 Billion every month PAT. He just told me early this week. I found it very hard to believe.

Now this Q1 result has shown he was not fibbing.

This guys are aiming for the stars ooo.


IF I can extrapolate based on the salary war between Zenith and Oceanic - They may be making PAT almost as much as Zenith is.

For some of us that have long term investment objectives, there is no better time than now to pump money into NSE.

If you see the yeye returns mutual funds give in Canada, you will laugh.

I beg I am expartriating all the spare cash I have to Naija.

yodiyokun:

forget ZEnith ooo they be whinch.

My source at Zenith told me they make about 3 Billion every month PAT. He just told me early this week. I found it very hard to believe.

Now this Q1 result has shown he was not fibbing.

This guys are aiming for the stars ooo.


IF I can extrapolate based on the salary war between Zenith and Oceanic - They may be making PAT almost as much as Zenith is.

For some of us that have long term investment objectives, there is no better time than now to pump money into NSE.

If you see the yeye returns mutual funds give in Canada, you will laugh.

I beg I am expartriating all the spare cash I have to Naija.

Investing in places like Canada, US,UK(apart from properties) etc is not worth the effort(those markets dont need us) if you want to include overseas stocks in your portfolio you are better off investing in funds that have the bulk of their holdings in emerging markets like Brazil, Mexico,Vietnam even closer to home Angola, Ghana, S/Africa.China and India are over-heating and a bubble waiting to burst so i wont touch them with a barge pole

RoughCut:

Investing in places like Canada, US,UK(apart from properties) etc is not worth the effort(those markets don't need us) if you want to include overseas stocks in your portfolio you are better off investing in funds that have the bulk of their holdings in emerging markets like Brazil, Mexico,Vietnam even closer to home Angola, Ghana, S/Africa.China and India are over-heating and a bubble waiting to burst so i wont touch them with a barge pole

Well said. No to mentioned the tax on capital gains most western countries will charge you.

Hi all

i know its been a while. Work no dey gree me again.

On Wema, the result was BAD.
Obviously the results the bank management wanted to release was not approved by CBN.
I have not sold any (simply because i have learned not to make buy/sell decisions thru panic and or hype)
the loss from Wema is limited except you bought at 11 or 12.
There is no need to hold fire, if wema won't let you sleep, sell asap. However, If you can sleep with wema like me, then hold. The fact that there were almost 1200 deals on it today tells you how many diff versions of the wema story are in the market. Its going to be interesting to see how this plays out eventually.

ON Zenith, this is one bank where the management understands the dynamics of what it takes to keep their share prices high. I like such a bank. Sweet result released in a bear atmosphere. HOLD for sure.

For speculative purposes, try taking position in UNIC before it stabilizes. Keep intenegins on your radar too.

Looking for shares being mopped up? look no further than Access bank, only 250 deals and it had a turnover of over 2 billion naira today.

@Temmie10
The thread dey miss you well well! Thanks for still taking time off to help others out.

I hope this will interest those of you holding on to WEMA. I was at my Broker's today to subscribe for Japaul, while chatting with the GM, one of the officials came in to brief him about the day's trades. He mentioned how WEMA mopped 190M units of its shares just to douse its Monday's publication.

He said the Bank had earlier pumped in N4 billion in mopping the shares. He concluded that this strategy will definitely back fire when core investors discover their game.

I heard Dangote flour is HIGHLY over subscribed and its Oceanic registrars are working 24/7. Refund is likely.

A word is enough for the wise.

NEWS FLASH,
Nigeria Bag Manufacturing Co(BAGCO),a subsidiary of FlourMill Plc is planning a public offer of 1.86b shares @3.90k to investors.
This was in the news today.
In the tradition of their parent company(Flourmills Plc)expect this stock to do great!

@Sweet_aura,
I've heard this gist before in different flavours. From the same brokers who had "BUY" recommendations on Wema just weeks ago?

And why shouldn't they buy their own shares. If everyone one is losing thier cool and selling, why shouldn't they buy up only to sell when they have good news.

Naija is full of urban legends. Everybody "knows" what's going on only after it happens.

@ all

a few days ago i posted here that the Wema management does have a strategy , THE BIG BATH . I definitely stand by my theory that the management WHIPPED UP the stock price before releasing such a dissapointing result to mitigate the expected sell-off. What we are witnessing is EARNINGS MANAGEMENT. The M.D was deliberately MISLEADING. I expect some good news soon from them , but it i cant trust this management. However that does not mean there isnt gains to be made from Wema . For those who own wema , depending on the weight it represent in your portfolio, you will probably be best served HOLDING until the good news start filtering through. Please RE-EVALUATE your position when this all plays out .i hope you all smile when this is over .goodluck !

Investing in Nigeria is one of the best decisions you can make. The return on investment is phenomenal. Check out this speech by the Director of the stock exchange. http://www.viewnaija.com/videos.php?sub_section=videos&id=577

Sweet_aura:

I hope this will interest those of you holding on to WEMA. I was at my Broker's today to subscribe for Japaul, while chatting with the GM, one of the officials came in to brief him about the day's trades. He mentioned how WEMA mopped 190M units of its shares just to douse its Monday's publication.

He said the Bank had earlier pumped in N4 billion in mopping the shares. He concluded that this strategy will definitely back fire when core investors discover their game.

I heard Dangote flour is HIGHLY over subscribed and its Oceanic registrars are working 24/7. Refund is likely.

A word is enough for the wise.

I hold wema and the news interests me but it will not influence me to sell. There are multiple reasons why Wema could be buying back shares if indeed they are doing this. Whatever the case I think they will release their interim results before going for PO and the result should not be bad or the PO is doomed.

easimoni:

@Sweet_aura,
I've heard this gist before in different flavours. From the same brokers who had "BUY" recommendations on Wema just weeks ago?

And why shouldn't they buy their own shares. If everyone one is losing their cool and selling, why shouldn't they buy up only to sell when they have good news.

Naija is full of urban legends. Everybody "knows" what's going on only after it happens.

Bro i couldn't agree more with you! A lot of publicly quoted companies buy back their own shares to prop up the price. Can someone honestly tell me what FBN is going to do with the N250B oversubscription from the last PO? They originally intended to raise N100B and now they are absorbing N250B i tell you this for nothing they will capitalize the oversubscription(which means they will increase their authorized share capital) and of course mop up the shares either in the open-market or through some investment vehicles or return cash to their loyal investors via mouth-watering dividends (least likely)

Going back to the mattter in hand WEMA has value going forward and their risk management framework is shot to pieces which is why they have paid a heavy price by the huge provisions they have made for bad and non-performing loans albeit indirectly by those of who have vested interest via our shareholding in the bank.

They will never come to the market without a set of good interim results next time around and dont forget the IPO or is it PO? has to be undewritten to the tune of 80%(by stockbrokers) before they can get approval to approach the market so that should be interesting

I'm HOLDING FIRE!

@sweet aura et al

what the person at your brokers' said about wema share buy back back-firing is no longer correct in modern day finance.

if a company buys back it's own shares, it is a great sign for the share holders in that the outstanding no of shares will reduce thus EPS will increase since those shares are cancelled when they are bought.

a company cannot buy it's own shares and hold in a stockbroking account to sell later, that is an illegal thing

another thing they can do is to give those stocks to their executive as part of their remuneration (stock option) and/or at heavily discounted cost to those executive or staff.

in either case, the cash spent is charged as an expense in the business year, the effect is marginal on the end yr return to shareholders, the bank's happy, staff are happy, shareholders like me are happy

what i'm trying to say is that any strategy to maintain shareholder value in a good company like wema is a sweet song to my ears. i'm impressed they thought of that strategy and i'm more convinced this mgt will do a good job

@ pumping
Thanks for the reply

No insider info, but your explanation makes sense. I had wanted to offload, but I couldn't do that at belo  =N= 30.
I can hold off till Q2  2008.

Hi Nairalanders,
Zenith bank too just joined the train.

The Nigerian Stock Exchange, this morning, has placed Zenith Bank Plc. stock on technical suspension following the receipt of application for:

(1) a public offer of 2,025,000,000 units at N38.90 (Valued at N78, 772, 500, 000:00k);and

(2) rights offer of 1,930,317,563 units at N36.90 (valued at N71, 228, 718, 074:70k)

The total offer size is N150, 001, 218, 074.70k.

Before now I had thought Diamond and Bank PHB were the bomb but men this offer tempts me.
My only concern now is the impact of listing additional shares on its forward EPS currently at 2.29 (the industry best)

@ the Gurus
Let the discussion begin.
What do nairalanders think?

Share buy back is not allowed in Nigeria. However, the companies can buy their own shares via their asset management companies, Pension fund companies etc. So it will not be a share buy back in the strict technical sense.

wanaj0:

Share buy back is not allowed in Nigeria. However, the companies can buy their own shares via their asset management companies, Pension fund companies etc. So it will not be a share buy back in the strict technical sense.

Which is exactly what i said by implying that they would have to use some sort of investment vehicles in which the company will be the major shareholder. Share buy back without using a conduit is illegal anywhere!

RoughCut:

Which is exactly what i said by implying that they would have to use some sort of investment vehicles in which the company will be the major shareholder. Share buy back without using a conduit is illegal anywhere!

Share buy back is not illegal. In the strict sense of the word, when you do a share buy back, you reduce the number of oustanding shares. In the case that we are talking about, the outstanding shares is not reduced in anyway. In share buy back, you basically cancel such shares. This is not the case here. What you have is share being mopped up by a market maker etc.

wanaj0:

Share buy back is not illegal. In the strict sense of the word, when you do a share buy back, you reduce the number of oustanding shares. In the case that we are talking about, the outstanding shares is not reduced in anyway. In share buy back, you basically cancel such shares. This is not the case here. What you have is share being mopped up by a market maker etc.

Share buy-back with the aim of manipulating share prices which is the case in this context is what i'm referring to and the point i tried to make is that it's illegal anywhere not only in Nigeria.

Of course companies are allowed to buy back their shares through an investment vehicle(indirect share holding) or directly from the shareholders which is what i said earlier with the aim of  reducing the share holding(reducing number of listed shares)  if they are awash with cash(and may be don't know what to do with it and/or if they don't want to  return cash to shareholders  via dividends) and  to increase shareholder value

Thanks for putting this into context

Company results:

Wema 2.9bn - 1.7bn First Quarter June 30th
First Bank 15.04bn - 10.23bn Half Year Result
IBTC 4.51bn - 3.27bn


ARE YOU STILL IN A HURRY TO SELL YOUR WEMA?

Zenith coming offer:

Rights N36.90
Offer N38.90

@wanajo

i dont agree with you that share buy back is not allowed in nigeria. where did you get that from?

share buy back is a standard financing practise all over the world. the fact that it is not yet being used regularly by companies in nigeria does not mean it is not allowed or illegal, it's almost like saying having diffrent classes of shares in a company is  illegal

dont forget that the capital market in nigeria is still developing, GDR was not existing in nigeria until GTB blazed the trail. we dont trade shares futures and options etc yet in nigeria, so if somebody does it, will you say it is not allowed?

Mr. Risky:

Company results:

Wema 2.9bn - 1.7bn First Quarter June 30th
First Bank 15.04bn - 10.23bn Half Year Result
IBTC 4.51bn - 3.27bn


ARE YOU STILL IN A HURRY TO SELL YOUR WEMA?

Zenith coming offer:

Rights N36.90
Offer N38.90

Is this a master stroke or stroke of stupidity? Well  methinks it's a master stroke just within days of each other they are on course to do PAT ~N7B at year end!
WEMA is now officially the come-back kid they are definitely bringing the baton home!

God bless you bro for sharing this with us

@roughcut

there's nothing like share buy backk with the aim of manipulating price. the very concept of share buy back does not allow for that. if a company buys back it shares, those shares are cancelled. once that happens, whatever effect it has on the shareprice is totally legal and allowed under the laws of any country

if a company buys it owns shares to keep somewhere using any brokerage or investment firm in which the company has interest, that is not share buyback and that is illegal. i.e company A owns significant interest in company B and company B now buys huge chunk of company A shares, that is manipulation and it is illegal

if it is found out (it is easy to find it out), the board of Company A goes to Jail

walcolm:

@roughcut

there's nothing like share buy backk with the aim of manipulating price. the very concept of share buy back does not allow for that. if a company buys back it shares, those shares are cancelled. once that happens, whatever effect it has on the shareprice is totally legal and allowed under the laws of any country

if a company buys it owns shares to keep somewhere using any brokerage or investment firm in which the company has interest, that is not share buyback and that is illegal. i.e company A owns significant interest in company B and company B now buys huge chunk of company A shares, that is manipulation and it is illegal

if it is found out (it is easy to find it out), the board of Company A goes to Jail

You have got the wrong end of the stick and i dont think any purpose will be served by flogging the issue so let's talk about WEMA a lot is riding on this one:-)

Mr. Risky:

Company results:

Wema 2.9bn - 1.7bn First Quarter June 30th
First Bank 15.04bn - 10.23bn Half Year Result
IBTC 4.51bn - 3.27bn


ARE YOU STILL IN A HURRY TO SELL YOUR WEMA?

Zenith coming offer:

Rights N36.90
Offer N38.90

Forward EPS 70k and wait for it PE Ratio =13.8 which is well below the sector average.

WEMA has pulled the rabbit out of the bag which sets them up nicely for the PO/IPO(not sure which one is it now)

walcolm:

@wanajo

i don't agree with you that share buy back is not allowed in nigeria. where did you get that from?

share buy back is a standard financing practise all over the world. the fact that it is not yet being used regularly by companies in nigeria does not mean it is not allowed or illegal, it's almost like saying having diffrent classes of shares in a company is illegal

don't forget that the capital market in nigeria is still developing, GDR was not existing in nigeria until GTB blazed the trail. we don't trade shares futures and options etc yet in nigeria, so if somebody does it, will you say it is not allowed?

Check the SEC rules and see whether share buy back is allowed!!!!! Rules governs every market.

Don't see how share buy back is used to finance a company!!!!

@wanaj0

can you please quote me the sec rules in question?

you need an understanding of corporate finance to know how share buyback plays a role in financing a company. an analogy you can run with is; when you owe 10 people and you pay off 2 of the 10, you have indirectly (the KEYWORD) financed yourself

I bought a share from Access bank like 4 yrs ago in Abuja I told them to mail the Certificate to my U S A adress but I did not receive it .
Guys how do I go about getting my certicate?

walcolm:

@wanaj0

can you please quote me the sec rules in question?

you need an understanding of corporate finance to know how share buyback plays a role in financing a company. an analogy you can run with is; when you owe 10 people and you pay off 2 of the 10, you have indirectly (the KEYWORD) financed yourself

And how do the company owe their owners? How does equity turn to debt? Teach me more about corporate finance.

I work in a firm that buys back its share every year. It is part of the necessary disclosures in the finnacial statement and it has nothing to do with financing.

Will try and search the SEC report where the Lagos Zonal officer said that share buy back is not in their books.
http://allafrica.com/stories/200710260355.html