Oceanic, what can you say? It is a waiting game. Heavy speculation? Maybe. The price is crashing I believe because of the oversubscription that was absorbed. 22B shares is not a joke. I am holding on because of this rumoured mega results to be announced and I know this is a fact from the grapevine. What is the PAT? 30B No way!!!

I do not believe in compromising any financial officer but I could not help asking an Oceanic ED for a few hints this weekend about this result we are all eagerly awaiting. This is what was said and the person no go fit give me jist.

- As at year end 2007, Oceanic had a balance sheet that beat Zeniths'.
- The PAT that will be declared by Oceanic will "shock" the banking industry (How much I no ask and paddy no take style tell me, haba).

Ok, you will ask, why did I not ask for figures but like I said I don't believe in compromising anyone's position.

So now how easy is it to sell this stock with this kind news? So some have decided to wait. If you have waited this long, you may as well hold on to the end. The result should be out this month according to the grapevine.

pumping777:

Oceanic, what can you say? It is a waiting game. Heavy speculation? Maybe. The price is crashing I believe because of the oversubscription that was absorbed. 22B shares is not a joke. I am holding on because of this rumoured mega results to be announced and I know this is a fact from the grapevine. What is the PAT? 30B No way!!!

I do not believe in compromising any financial officer but I could not help asking an Oceanic ED for a few hints this weekend about this result we are all eagerly awaiting. This is what was said and the person no go fit give me jist.

- As at year end 2007, Oceanic had a balance sheet that beat Zeniths'.
- The PAT that will be declared by Oceanic will "shock" the banking industry (How much I no ask and paddy no take style tell me, haba).

Ok, you will ask, why did I not ask for figures but like I said I don't believe in compromising anyone's position.

So now how easy is it to sell this stock with this kind news? So some have decided to wait. If you have waited this long, you may as well hold on to the end. The result should be out this month according to the grapevine.

Keep pumping!!!!!!!
Thanks for the info. I was getting worried because I have not been able to generate enough interest in the house about the topic. I guess because we are on the same time zone, we seem to log on about the same time. I appreciate your relating the information you gleaned.
Keeeeeeep Pumping!

@ Roughcut,
Thanx for info on Abbey and Mutual,

One more thing,
Instead of buying 10 units a chicken+egg combo worth 80 bucks each ( 10x 80= 800), with potential to rise to 90 or even hundred bucks ( 20 x 10 =200), why not buy the eggs only worth 4 bucks each? Same 800 bucks gives you 200 units, then the potential to rise to maybe 8 bucks or 10 bucks gives you ( 200x6=1200). Isnt Bagco alone worth more in the long run than Flour Mills?
Pardon the parable of the poultry farmer,

Splendid parable!!

http://www.africanfinancialmarkets.com/front-news-detail.php?NewsID=22908
The new investor in Nigerian Wire and Cable Plc, Truebond Investments and Capital Limited has injected N1.3billion as part of efforts to reposition the company. The new investor has also mapped out new strategies to reclaim lost grounds after the take over by a new board.

Managing Director of the Company, Lateef Akande Bakare disclosed this in Ibadan while speaking on the turnaround agenda of the company. On the company which was shut over 18 months ago, Bakare said, the take over by the new Board and Management "is symbolic as the new team is committed to see that the aspirations of the founding fathers of the company are not lost". He noted that the new team has a programme that would ensure that the Nigerian Wire and Cable reclaim its prime position as the supplier of the best cable materials in Nigeria and the West Coast of Africa.


@ Pumping777

1. Does this stock have potential?

2 What say u about the bagco parable? Good purchase or not?

BAGCO is a good company. However you cannot put a BUY on it until you see the offer documents.

Wire and Cable is a good company that died due to a lot of factors. While it is commendable to have new investors you need to thread with caution. Wait until someone neutral confirm the investment plans. I know for sure that a a time, Doyin Okupe and co were to be the core investors. They were said to have poured money into the company. At the end it was all story. Except you are a Strong risk taker, I will ask you to look for a less risky stock.

On Oceanic, I bailed out at 33.00. Whatever result they declare, 33.00 is a fair price for it as far as I am concerned.

I am scared stiff of those insurance companies. Interim results but full year result not yet released. News of merger and no one saw the merger documents. No confirmation of oustanding shares. If you increase PAT by 1,000% but the issued shares increased by 5,000% is that beneficial to the shareholders. Im love the way NSE is punishing them big time. Look at NEM from a high of >6.00 to about 2.00 now!

Bids yesterday at the exchange on 2 tier banks
First Inland in excess of 80 million units
Wema in excess of 40 million units
Int. Brew in excess of 4 million units
Japaul in excess of 4 million units


Nem Insurance is on net offer of about 11 million units likely becaue of the merger and rights issue recently alloted to investors. Most people are selling after getting enough capital appreciation from the right's offer price.
Dont think it is punishment for existing shareholers as Wanaj has said.

FCMB has decided they will capitalize any over-subscription for their current offer that means they will absorb any oversubscription

http://www.thisdayonline.com/nview.php?id=94398

Now all of a sudden the figures seem to have gone peer-shaped. According to the prospectus at the end of the current offer the shares outstanding will be in the region of 14B and there will be an additional 900M shares  listed in support of the $100M GDR component. Now if we assume they are allowed to capitalize 25% of the over-subscription(will be more according to the news) that is roughly an additional N1.125B and at the current offer price that would result in an additional 1.6B listed shares and the projected PAT in the prospectus is N15B (too agressive for me though from N5B in 2007) so i don't think i would even bother estimating the adjusted EPS and PE ratios so not looking rosy as it would first appear

Unless they are threatening to release a spectacular extra-ordinaire of a result like Oceanic is threatening to do the figures don't do it for  me so i  think i will be issuing a BUY order for Bank PHP and buy the PO at the same time( that is a N35 stock in the next 6 months!)  that way i can spread my bets and cash in on the post-suspension bull run and any future potential upside as a result of buying into the PO

jehosaphat:

One more thing,
Instead of buying 10 units a chicken+egg combo worth 80 bucks each ( 10x 80= 800), with potential to rise to 90 or even hundred bucks ( 20 x 10 =200), why not buy the eggs only worth 4 bucks each? Same 800 bucks gives you 200 units, then the potential to rise to maybe 8 bucks or 10 bucks gives you ( 200x6=1200). Isnt Bagco alone worth more in the long run than Flour Mills?
Pardon the parable of the poultry farmer,

chei! your parable reminds me of KFC chicken+chips combo in the UK. You will live to kill another one:-)

EMMAACHILE:

Bids yesterday at the exchange on 2 tier banks
First Inland in excess of 80 million units
Wema in excess of 40 million units
Int. Brew in excess of 4 million units
Japaul in excess of 4 million units


Nem Insurance is on net offer of about 11 million units likely becaue of the merger and rights issue recently alloted to investors. Most people are selling after getting enough capital appreciation from the right's offer price.
Dont think it is punishment for existing shareholers as Wanaj has said.

Most people are yet to get the rights certificate for NEM. Don't even talk about merger shares. Did you see the merger document? When banks were merging did you not see the scheme of merger documents?

Problem is the insurance industry is not well regulated. This is evident in the consolidation exercise. With scanty info available, investors are looking the other way. Look at UNIC, year 2006 result is yet to be released!!!!!

RoughCut:

FCMB has decided they will capitalize any over-subscription for their current offer that means they will absorb any oversubscription

http://www.thisdayonline.com/nview.php?id=94398

Now all of a sudden the figures seem to have gone peer-shaped. According to the prospectus at the end of the current offer the shares outstanding will be in the region of 14B and there will be an additional 900M shares listed in support of the $100M GDR component. Now if we assume they are allowed to capitalize 25% of the over-subscription(will be more according to the news) that is roughly an additional N1.125B and at the current offer price that would result in an additional 1.6B listed shares and the projected PAT in the prospectus is N15B (too agressive for me though from N5B in 2007) so i don't think i would even bother estimating the adjusted EPS and PE ratios so not looking rosy as it would first appear

Unless they are threatening to release a spectacular extra-ordinaire of a result like Oceanic is threatening to do the figures don't do it for me so i think i will be issuing a BUY order for Bank PHP and buy the PO at the same time( that is a N35 stock in the next 6 months!) that way i can spread my bets and cash in on the post-suspension bull run and any future potential upside as a result of buying into the PO

Over subscription means more money for them to generate more profit. Good thing about the FCMB offer is that the proceeds will be utilised in such a way to reap benefits within 12 months. They are not going for all that opening of new branches nonsense that will take average of 3 years to make profit. That's why I tend to see the ambitious profit forcast as being achievable. The interim result already hint towards that.

wanaj0:

Over subscription means more money for them to generate more profit. Good thing about the FCMB offer is that the proceeds will be utilised in such a way to reap benefits within 12 months. They are not going for all that opening of new branches nonsense that will take average of 3 years to make profit. That's why I tend to see the ambitious profit forcast as being achievable. The interim result already hint towards that.

I wish i could share your enthusiasm the Q1 result for FCMB is N2.7B so don't think anything spectacular will happen before March next year  to push full year  PAT to N15B at best i'm expecting about N11B which makes a nonsense of the projections in the prospectus and even  with this oversubscription not doing it for me.

nigeriansecurities.com(one of the most accurate) also thinks their PAT at year end will be about N10B which i think is very reasonable. I agree with you though about how they are deploying the funds raised(brings a breath of fresh air to the usual branch network expansion nonsense) and they are expending quite a large chunk of their capital in the mortgage business in fact they expect a sizeable chunk of their income to come from the  mortgage /lending space  in the next couple of years which is the  next big thing as far  naija is concerned

I dont hink they would do N15B PAT for YÊnd 2008 based on current form!

jehosaphat:

One more thing,
Instead of buying 10 units a chicken+egg combo worth 80 bucks each ( 10x 80= 800), with potential to rise to 90 or even hundred bucks ( 20 x 10 =200), why not buy the eggs only worth 4 bucks each? Same 800 bucks gives you 200 units, then the potential to rise to maybe 8 bucks or 10 bucks gives you ( 200x6=1200). Isnt Bagco alone worth more in the long run than Flour Mills?
Pardon the parable of the poultry farmer,

Bro, do u write folklores?
This parable na wah o, but your point is evident and definitely has weight.
cheers

@all
FCMB's offer looks probably (not absolutely) better than most, afribank, fidelity et al, but even then, FCMB are not magicians.
Anybody buying fcmb should keep their expectations realistic. AT the current size of banks, exponential returns in the short term may not be possible again. You can only grow so big. Same goes for zenith.

In actual fact from the plethora of IPO/PO's on offer at the moment i would include in my list in order of preference

Bank PHP and or Diamond(Yet to see prospectus to make a definitive judgement but based on current from looking juicy)

FCMB and

the dark horse

WEMA(risky because not sure where the price will end up before they go on TS but will make a judgement when i see the prospectus but it has a lot of value!) May be not  advisable if you don't already own the stock

Before the prospectus for FCMB was released the PO was done and dusted  but now having read between the lines not too sure now so the moral is READ BETWEEN THE LINES and the proverbial small prints

RoughCut:

In actual fact from the plethora of IPO/PO's on offer at the moment i would include in my list in order of preference

Bank PHP and or Diamond(Yet to see prospectus to make a definitive judgement but based on current from looking juicy)

FCMB and

the dark horse

WEMA(risky because not sure where the price will end up before they go on TS but will make a judgement when i see the prospectus but it has a lot of value!) May be not advisable if you don't already own the stock

Before the prospectus for FCMB was released the PO was done and dusted but now having read between the lines not too sure now so the moral is READ BETWEEN THE LINES and the proverbial small prints

My concern with FCMB is totally different from yours.

FCMB is acquiring CSL. That means the profit of CSL automatically add to the profit of the old FCMB. So if they made N2.7B in Q1, that means without any changes, improvements etc you are talking of profit of N10.8b. Add that to the possibility of growing profit in susbsequent quarters. Add that to the contribution from CSL. So you can see that the N15bn is not far fetched.

My concern was actually the reduction in the assets as at full year as compared to the Q1 status.

wanaj0:

My concern with FCMB is totally different from yours.

FCMB is acquiring CSL. That means the profit of CSL automatically add to the profit of the old FCMB. So if they made N2.7B in Q1, that means without any changes, improvements etc you are talking of profit of N10.8b. Add that to the possibility of growing profit in susbsequent quarters. Add that to the contribution from CSL. So you can see that the N15bn is not far fetched.

My concern was actually the reduction in the assets as at full year as compared to the Q1 status.

Also take into consideration they will have to acquire the assets and libilities of CSL and i noticed they made a provision of N3.2B for risk assets(another name for goodwill) is this to do with the acqusition of CSL ? They will have to charge this to the profits or their reserves so not sure anything changes

gist is that Union bank is giving dividend of 1 naira and a bonus of 1 for 5.
Not bad at all.

wanaj0:

Look at UNIC, year 2006 result is yet to be released!!!!!

Actually unic's results are out 2day

RoughCut:

Also take into consideration they will have to acquire the assets and libilities of CSL and i noticed they made a provision of N3.2B for risk assets(another name for goodwill) is this to do with the acqusition of CSL ? They will have to charge this to the profits or their reserves so not sure anything changes

They will likely charge the goodwill against their reserve (share premium). Effect will only be on balance sheet not on profit and loss account.

Risk assets are provision for bad and doubtlful loans. I think that is consistent with previous years. Don't expect CSL to come with high bad and doubtful loans.

Temmie10:

Actually unic's results are out 2day

At last. Hope we will see the oustanding shares beased on the last PO. Hope to see the treatment given to the life insurance aspect of the business and what their plan is going forward.

Proshare News and Analysis
BAGCO: N7.27 bn IPO opens Nov 7
Posted Tuesday,6 nov
The Initial Public Offer (IPO) of Nigerian Bag Manufacturing Company Plc (BAGCO) is to commence November 7, 2007. The company is offering to the public 1.87 billion ordinary shares of 50 kobo each at N3.90 per share. This was after its shareholders approved its decision to raise the funds through the capital market. The offer which is scheduled to close on 14th of December 2007, is 80 per cent underwritten on a firm basis by Zenith Bank Plc.

The offer, according to the offer document, is undertaken to give investors opportunity to become part owners of the company which is currently a wholly owned subsidiary of Flour Mills of Nigeria Plc. After the conclusion of offer, Flour Mills 100 per cent holdings will be reduced to 70 per cent while the remaining 30 per cent will belong to investors in the IPO.

The Managing Director of the company, MR. Peter Soutar Low, disclosed that the proceeds of the offer would be utilised to settle current deposits which it incurred in the process of the making the company an efficient manufacturer of different types of bags.

He said, “The estimated net proceeds of the offer of N6.95 billion after deducting the cost of the offer, estimated at N320.76 million will be utilised in the repayment of loans valued at N6.26 billion, representing 90 per cent of the offer proceeds, while N695.27 million representing 10 per cent would be used as working capital, in addition to the fact that it will make it possible for the company to meet the requirements for listing on the Nigerian Stock Exchange (NSE).
It forecasts a turnover of N12.46 billion, N15.45 billion and N17.15 billion for years 2008, 2009 and 2010 respectively and a profit after tax of N1.07 billion, N1.67 billion and N1.89 billion respectively.
It promises to pay its shareholders a dividend of 17 kobo per share in the 2008 and 2009 financial year while they will be enjoying a dividend of 18 kobo per share in 2010.
It disclosed that with the coming on stream of United Cement Company of Nigeria Limited (UNICEM) in 2008, its bottom line will be boosted considerably, as it is the supplier of first choice to the company. “In addition to its existing markets, Bagco is supplier of first choice to UNICEM which is due to come on stream in 2008 and it is ready to take advantage of this.
It is generally accepted that Nigeria’s appetite for cement will continue to grow strongly for the foreseeable future.  In conjunction with its dominance of its core market, it is embarking on other areas of packaging. Bagco Morpack will produce high quality film packaging for the consumer products industry,” The prospectus noted.  - Vanguard

bootas:

Proshare News and Analysis
BAGCO: N7.27 bn IPO opens Nov 7
Posted Tuesday,6 nov
The Initial Public Offer (IPO) of Nigerian Bag Manufacturing Company Plc (BAGCO) is to commence November 7, 2007. The company is offering to the public 1.87 billion ordinary shares of 50 kobo each at N3.90 per share. This was after its shareholders approved its decision to raise the funds through the capital market. The offer which is scheduled to close on 14th of December 2007, is 80 per cent underwritten on a firm basis by Zenith Bank Plc.

The offer, according to the offer document, is undertaken to give investors opportunity to become part owners of the company which is currently a wholly owned subsidiary of Flour Mills of Nigeria Plc. After the conclusion of offer, Flour Mills 100 per cent holdings will be reduced to 70 per cent while the remaining 30 per cent will belong to investors in the IPO.

The Managing Director of the company, MR. Peter Soutar Low, disclosed that the proceeds of the offer would be utilised to settle current deposits which it incurred in the process of the making the company an efficient manufacturer of different types of bags.

He said, “The estimated net proceeds of the offer of N6.95 billion after deducting the cost of the offer, estimated at N320.76 million will be utilised in the repayment of loans valued at N6.26 billion, representing 90 per cent of the offer proceeds, while N695.27 million representing 10 per cent would be used as working capital, in addition to the fact that it will make it possible for the company to meet the requirements for listing on the Nigerian Stock Exchange (NSE).
It forecasts a turnover of N12.46 billion, N15.45 billion and N17.15 billion for years 2008, 2009 and 2010 respectively and a profit after tax of N1.07 billion, N1.67 billion and N1.89 billion respectively.
It promises to pay its shareholders a dividend of 17 kobo per share in the 2008 and 2009 financial year while they will be enjoying a dividend of 18 kobo per share in 2010.
It disclosed that with the coming on stream of United Cement Company of Nigeria Limited (UNICEM) in 2008, its bottom line will be boosted considerably, as it is the supplier of first choice to the company. “In addition to its existing markets, Bagco is supplier of first choice to UNICEM which is due to come on stream in 2008 and it is ready to take advantage of this.
It is generally accepted that Nigeria’s appetite for cement will continue to grow strongly for the foreseeable future. In conjunction with its dominance of its core market, it is embarking on other areas of packaging. Bagco Morpack will produce high quality film packaging for the consumer products industry,” The prospectus noted. - Vanguard

Except there is a mistake in this report, then BAGCO offer is very expensive!!!!!!!!!! forward PE of 22.8 for 2008 is a no no!!!!!! The new investors will likely not partake of teh 2007 declarations. Forward PE for 2009 itself is not that encouraging at PE of 14.

If this is true then I will just let the offer PASS!

To all the Guru's in the house,

You guys have said a lot of good things about BAGCO IPO but what I read from Proshare News posted by Bootas is of a great concern to me. It was clearly stated that 6.26 billion which represent 90 percent of the IPO fund would be used to repay their loan. So, if this large chunk of the money is for loan repayment then one just have to be a bit careful with this BAGCO people or am I missing something?.

PEACE.

tonyjon:

To all the Guru's in the house,

You guys have said a lot of good things about BAGCO IPO but what I read from Proshare News posted by Bootas is of a great concern to me. It was clearly stated that 6.26 billion which represent 90 percent of the IPO fund would be used to repay their loan. So, if this large chunk of the money is for loan repayment then one just have to be a bit careful with this BAGCO people or i'm missing something?.

PEACE.

Yes you heard right and i dont think you are missing anything they are repaying the loan from the proceeds of the offer and the rest will go on working capital and it will be 70% owned by Flour Mills

@ Wanaj0,

Is it advisable for one to buy into the insurance sector now?.

Peace.

@RoughCut.

Thanks RoughCut, with Flour Mills behind them I think they have a solid back bone. I have reconsider my stand and ready to take position.

Peace.

tonyjon:

@ Wanaj0,

Is it advisable for one to buy into the insurance sector now?.

Peace.

Personality differs so it is difficult to say.

Insurance companies hold value for the future. Not sure however that the current prices are good for entry. So many 'hidden' things about them. So thread with care.

Temmie10:

gist is that Union bank is giving dividend of 1 naira and a bonus of 1 for 5.
Not bad at all.

Correct. Result declared today as predicted. Not expecting it to affect the price that much though.

Still expecting the UNIC result.

May and Baker result also is quite impressive.

wanaj0:

Personality differs so it is difficult to say.

Insurance companies hold value for the future. Not sure however that the current prices are good for entry. So many 'hidden' things about them. So thread with care.

@Wanajo

I've always been a fan, but i wont agree with u on this one. Insurance shares will do well, by the 1st qtr of next yr i expect things to change drastically for the better.

@Easimoni

Do you agree with wanajo? Anyways, i'm in the insurance sector for long keeps, but if things are gonna go wrong, i might as well sell when things get slightly better.

whitelexi:

@Wanajo

I've always been a fan, but i wont agree with u on this one. Insurance shares will do well, by the 1st qtr of next yr i expect things to change drastically for the better.

@Easimoni

Do you agree with wanajo? Anyways, i'm in the insurance sector for long keeps, but if things are going to go wrong, i might as well sell when things get slightly better.

Guess you are misintepreting my comment. INSURANCE companies holds value. However, not sure of the current valuation. Some corrections have taken place already which is good. Check the highs and lows and you will see the corrections. Valuation is difficult when you don't have the full information.

I have insurance stocks. I am however wary of buying some at current price levels.