I can see that there are many Nigerian bank selling IPOs lately, in fact i think the stock market is saturated! Please use cautions when buying these stocks. World wide money market is rocky these days.

And plus i don't trust these banks with their earning reports, i think some of them are cooking their books. Anybody remember ENRON corporations ?? These banks are using the same tactics ENRON used in their fallen days, they misrepresent their earning report with bogus numbers while the executives helped themselves with inside trading.

Some of them are now in jail. A bank CEO just got arrested in lagos for stock fraud, so please buy with care!

That's a very good observation @ sweet T, and an excellent advice

kind of you, sweet T

@sweet T,
I beg to disagree with you.
the NSE is in no way saturated,infact the market is just opening up.
less than 12% of nigerians are currently involved in stock trading, foreign fund are just coming,so there is still much room for growth.
is there any investment thats doesnt involve risk? stop seeing fantasis and join the train now.

which bank CEO was recently arrested for stock fraud? hope you are not talk ing of spring bank?

10x a million Sweet T for the Advice

Yeah I agree with hbrednic, the market is just opening up! The Nigerian stock market is the place to be and there's room for plenty of growth.
@ Poster
Do youhave any evidence that any of the banks are actually doctoring their reports? Thats a serious allegation and should be backed with reasonable proof.

Sweet T,
Without any factual evidence to back up your claims, I will consider this baseless insinuations.
Moreso, suggesting that banks are cooking their books without presenting proofs, are serious accusations. It's ok to warn and alert people on the risks of investing in stocks, but making baseless links to Enron et-al is not necessary.
There is a possibility that you might know some things we do not know,

The poster is not an alarmist. Better to look before you leap in a society where accountability is not emphasized in the Nigerian society. While I disagree with him that the Nigerian stock market is saturated, at the same time, you have to realize that losses in the Nigerian stock market, unlike their American counterpart cant be deducted when filing your taxes. But then again, what I keep reading on this board, mostly is the gains people have made in the stock market. Should I take a leap?

@Hbrednic
What foreign funds are you talking about The western money market is at a serious cash and credit crunch, just this week alone at New york stock exchange, the dow jones lost over 400 points. Can you imagine?? If this bank are making huge profit as they are reporting, why is intercontinental and UBA getting huge foreign loans? I think access bank got some loans recently too. Nigeria economy is too small and there is not enough cash surplus to mop up all these IPOs the banks are putting up in the market. some will make profits but and some will suffer heavy loss!! If 12% of Nigerians own stocks, that is an amazing number!!! Even the number 1 economy in the world, USA can not even boast of such numbers amongs her citizens. If you pay attention to the world capital market, economic conditions are usually a ripple effect. The european,asian markets has followed the American credit crunch and stock market mark-down. Of course the bank will not tell you the truth, but the insiders knows what they are doing. I AM NOT SAYING DON'T INVEST, BUT DO IT WITH MODERATION AND CAUTION, ESPECIALLY AN ECONOMY LIKE OURS WITH A NEW GOVERNMENT BESIEGED WITH ALL SORTS OF CONTROVERSIES. OVERALL WELL BEING OF ECONOMY USUALLY DICTATE HOW PROFITABLE THE STOCK MARKET WILL BE. IF WORKERS ARE NOT BEING PAID WELL AND THE INFLATION IS HIGH, PLEASE BECAREFUL. DON'T INVEST MORE THAN 10% OF YOUR EARNINGS ! A WORD IS ENOUGH FOR THE WISE.

hbrednic:

@sweet T,
I beg to disagree with you.
the NSE is in no way saturated,infact the market is just opening up.
less than 12% of nigerians are currently involved in stock trading, foreign fund are just coming,so there is still much room for growth.
is there any investment thats doesnt involve risk? stop seeing fantasis and join the train now.

which bank CEO was recently arrested for stock fraud? hope you are not talk ing of spring bank?

Permit me to disagree with you, @hbrednic.
I think that the point @sweet T was making is not so much an issue of the number of Nigerians [/b]involved in stock broking, as it is one of the [b]rate at which companies are going to the market to raise funds. And I do think that a note of warning is indeed in order.

While I agree that there is room for growth in the stock market (as long as there is room for growth in the Nigerian economy, there will always be room for growth where stocks are concerned!), I think it is fair to say that there has been quite a large number of companies raising money lately on the stock market - enough to make one at least decide to 'tread carefully' with regards to buying stocks.

Whatever the case, however, just as in the Enron case, if there is any 'cookery' it will come to light sooner or later. One only hopes that one is not caught up in any such company.

@MAURI
What more fact do you need?? These banks are going overseas to get loans and at the same time reporting a huge quarterly profits. where did most of these banks get enough capital base to account for N100billions of IPOs ? even Afribank is selling huge stocks ! Invest but do it with moderation and study the market. Most of these brokers are overpaid liars ! I will give Yar'adua's govt. another year to see their economic policies before i start buying heavy stocks. Don't believe the hype, do your own research !

[b]EVEN THE CBN HAS ORDERED THE BANKS TO PROVIDE EVIDENCE OF CAPITAL FUNDS TO BACK UP THEIR IPOS AND OTHER SERVICES. WHAT MORE SIGNALS DO YOU NEED ?? [/b]


@xanadu
All companies must cook some books to stay in business. It just depend on how greedy or dump they get to be caught. Even govts. cook books !

@Sweet T

Thanks, it nice to know someone thinks the same way I do. There is no way the case of the Nigeria stock market would be immune to the the patterns of markets all around the world. After a boom comes a burst. Northern rock was lucky to have the government step in to rescue the Bank and guarantee its customers their money. If any of our Nigerian Banks feels the squeeze who will rescue them? I guess its easy to shout down a voice that tells you what you are in denial about. Its particularly a welcome piece of advice when you consider that, from threads I read here, people seem to give specific dates when the price of a stock would rise! There is an assumption that its all profit in the short term. This thinking has resulted in Wema Bank shares being dumped all of last week as there seems to be no long term objective but short term only.

I have always wondered why the banks return to the IPO market to raise money just about every year?

It has not been long since Zenith do IPO, now they are at it again.

Making IPOs their major source of income is certaily dangerous even for a stock novice like me.

@Naijamaking 1

I guess that's why the banks call themselves PLC (public liability company) ! And the owners get fat even if the bank implodes.

Like my man Alan Greenspan said " Don't throw good money behind bad money". Invest but don't take a creless risk.

Its possible that there maybe an issue of choice of words. The Stock Market in Nigeria is still burgeoning so I am not sure its saturated. But I think that there are a number of over inflated stocks. There have been cases of listed companies filing false accounts.

Investing in stock in Nigeria can be very profitable if you have a good broker and a watchful eye.

Sweet T:

@xanadu
All companies must cook some books to stay in business. It just depend on how greedy or dump they get to be caught. Even govts. cook books !

@sweet T, while I agree with you that one should exercise a great degree of caution where the stock market in Nigeria is concerned, I do beg to differ with regards to your view about companies cooking their books. Companies DO NOT have to cook ANY book to stay in business. Enron stands out as a major example of a company that did cook their books, and was subsequently punished. That does not mean that ALL companies have to juggle their numbers and cook their books. Companies MAY take advantage of existing loopholes in accounting regulations, and still operate legally, but do not HAVE to cook their books.

I think there companies out there, in Nigeria and elsewhere, that do not cook books - I think it is a fair point, though, to concede that they may be in the minority.

Companies that 'get it right' from the beginning - getting decent, disciplined officers, for example, stand a better chance of conducting business without cooking their books. Environments where there is efficient regulation of company activities also make for less opportunities for companies to cook their books.

In fairness also, it can be argued that in the United States, Enrongate happened even though they have a good regulatory system. But then, how good could that system have been, if, after the scandal was revealed, massive and sweeping changes were made by the US SEC, including the Sarbanes-Oxley Act of 2002 (often shortened to SOX) which was enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise? With such changes, I am sure it is less likely that many companies would dare go the way of Enron and cook their books.

All the WONDERBANKS money wey dem sit on top never do them. Why come to the capital market to raise fresh funds again? Investors watch out, danger looming ahead.

@ Sweet T and other bank PO cautionists,

I once had the privilege of working on a $B+ project in the Nigerian oil and gas industry. We wanted to boost local content so we asked Nigerian banks for $300M. It took SIX, yes SIX, Nigerian banks to raise that amount while CSFB single-handedly funded the remainder. An amount considered small in international investment banking circles. If you ask why Nigerian banks keep raising money, it's because there are so many big-ticket items (in oil & gas, telecoms, public infrastructure) that our banks cannot handle at their current size. Ask yourself what Citibank has been doing in Naija all these years. They are the the bankers to the big internationals in Naija and their tiny office in V/I moving more money than our big banks. If our banks wish to jump-start the march to international relevance, the first step is to have adequate capital. that's what they are trying to do.

On the subject of raising debt, I'm not trying to talk down to you but there is nothing wrong with a bank raising money through debt. If a bank can borrow money at typical western rates (say 6 - 8%) and invest in 20 - 50% Nigerian projects, why not? Almost all companies fund projects with a mix of debt and equity. Banks all over the world issue bonds to raise money and get line of credits.

That said, I don't like POs simply because they are not in the best interest of a short-term investor (e.g ME). But if a bank wishes to stay relevant, the name of the game is capital. And you must get it, via POs or debt, but you must get it.

Enjoy.

PS, Don't accuse people of cooking books without credible evidence. You linking banks in Naija to enron is reckless deduction. Why can't there be anything good about naija?

.

@Xanadu
Who in the world told you that some companies do not cook books. The only companies that do not cook their books are the monopolies, socialist oriented or non-profit companies ! Trust me, if you have any seasoned business man they will tell you that to match up with competitors they have to device a way of keeping green balance sheet. May be not up to ENRON level but to some extent. The popular motto in business is "No one deals with a loser or inconsistence account book". You said "loopholes". That is exactly what i mean, LOOPHOLES !!! I once had a friend that works at SEC head office and she told me so many methods companies use to stay just withing the boundaries of the law.

@easimoni
I love Naija but we tend to be victims of imaginations too many times. Good things can happen in Naija and will happen in Naija but we have to make so many sacfrifice and be transparent in our dealings. Even though we have made so many progress in honesty but there is still some room for improvement. In Naija, all we want is instant gratification without due process. Take for example, the case of those wonder banks. Would have invested heavily in such schemes?? Naija stock market is saturated with POs with not enough takers. Our economic conditions does support such a huge undertaking. Can you imagine telling over 60% citizens that is struggling with basic neccessities of life to go buy a bank stock?? Even in America where majority of the citizens live on paycheck to paycheck, only few percentage of people buy stocks. american stock market is filled with foreigners. That is why some banks and companies kept extending their closing date because there are not enough takers! I even heard that some people that bought last year has yet to recieve their certificate !!

Okay @sweet T, we are not going to split hairs over this. Yes, we should exercise caution over purchasing stock - as we indeed should any endeavour we engage in.

Sweet T:

@Xanadu
Who in the world told you that some companies do not cook books. The only companies that do not cook their books are the monopolies, socialist oriented or non-profit companies !

Your view is that ALL companies HAVE [/b]to cook books to be successful (though in one breath, as shown above, you repeat that view but also concede that [b]ONLY big monopolies have no need to cook their books, more or less agreeing with me that companies DO NOT have to cook their books, monopolies or not) ) - my view is that companies DO NOT HAVE to cook book to be successful, and that I believe there are companies, even in Nigeria, that DO NOT cook their books. I am also of the view that companies do use loopholes in existing regulations - something that is not 'illegal'.

Sweet T:

You said "loopholes". That is exactly what i mean, LOOPHOLES !!! I once had a friend that works at SEC head office and she told me so many methods companies use to stay just withing the boundaries of the law.

Are you equating cooking the books with taking advantage of loopholes?? Enron did not take advantage of loopholes - they cooked the books! If you are (now) saying that by 'cooking the books' you mean taking advantage of loopholes, then perhaps that is what you should have said in the first place.

In any case you have done well and reminded us all of the need to exercise caution. Thanks for that.

SweetT, where did you gather such an unfounded allegations that all companies tweak their financial report, apart from non-profits? you gotta do your research first, before jumping into hasty conclusions. You live in America, dont you? You would remember that the same non-profit company that you are defending have been entangled in controversy before. Some years back, Goodwill store, a non-profit was mired in controversy when it was revealed that some of its employees had ripped off the company financially. I can never vouch for any company in this world, for profit, or non-profit, but that does not mean that they arent some scrupulous organizations in the firm.

As for the stock market, I think there are some people who are in for short term purposes. Even in America, I have read of some people who borrow money from credit card companies (0% transfer balance) and invest in the bank and gain over 4 percent. At the end of it, they pay off the bill and have some leftovers from the yield accumulated from the investments. No, the stock market in Nigeria is not saturated, you have to exercise caution when it comes to investing.

Are you equating cooking the books with taking advantage of loopholes??

Called the "grey area" and why we need lawyers that turn 3 sentences into 10 pages on both sides and single spaced. Had a trust formed in 1996 and last year another thief couldn't decipher the jargon, nor a judge. The guy who wrote the thing couldn't even explain the document to me. Still billed me $3K to read what he wrote! Bastards!  Why make it that way? Creates a "grey area".  $250/hr for what? Talking on the phone? To me none the less.

CPA's make the numbers add up to what they are told to put in the bottom line. Paid very well to create numbers. Even quarterly estimates are inflated do drive the stock up. Hey! Its the American way!

Nigerian, banks and IPO's. Thats all I need to hear. Invest in Nigerian companies if you don't like money. Who is looking over there shoulder like the trade commission does in the US? Been e-mail's going around the past yr claiming 300% gains or so from Nigerian companies. The whole lot of current spam mail and scams are traced back to Nigeria. Not a wealthy country either which is a red flag. Old school saying, If it smell like shit, looks like shit, guess what, its shit!  Don't be a fool!

I made my first million at age 25. Then 99-00. Lost everything and was in debt. Cost me 1.4m to learn why stocks ruin lives. IRS showed me no pitty, graced me with high intrest. Thanks USA! We are a free county, free to pay taxes!

IPO's have the most risk.  Most fail the first year. Don't buy until they prove themselves in that first year. They just chapter 11 one IPO to create another. Class action suit may give a small % back. Maybe 25%(lmao high %) of the original value if lucky enough to have only a few file a claim. Most get jack from CA suits. Then leave investors with worthless leftover paper. Must have used a disapering scroll on the money. More like a transfer money spell to a bank account.

American Home Morgage(AHM) just bent me over last month.  Maybe Sept.  A lil KY would have been nice. Geez! Around $30 to 50 cents overnight! Whats that? The tooth fairy?

Anyone who says the "market is saturated", "is going up" or "enron is the only guilty company" needs to keep there $ in there pocket. Can anyone see the future? If you can, throw me a bone!! Enron is only the most recent big co. to get caught and not the first. History always repeats itself. Goggle it! Guessing what the market will do is just nuts! Nobody knows whats up until they lose everything. Why does that sound familiar?

A wise man once said

I am not an experienced investor but I don't do IPO

. Buy the time shares are available to us, we're a day late and a dollar short. The money has already made and will be cashed in soon. That $2 stock is now worth 50 cents and will not move up anytime soon and likely to go steadily down hill.

I choose my stocks like so,
Been around for 10 yrs or more
Pay good dividends. 8% is enough but look for 10% or more.
Good history of raising dividends every yr or so
BIG names like altria, Wells Fargo and Haliburton.
Cheap stocks have more risk and I avoid them with a rare exception.
READ the accountings for past 10 yrs. In debt? In the green? Red? Increase from last yrs gain/loss? Investments? 52wk high/low? Shares outstanding? PE? Insider trades?
The Dow price or any index will not make you any real money. Index funds? LOL! Has little effect on the good companies that wont drop far before its at fare mkt value.
Diversify then diversify even more. 2 or more from each sector. Software is ok but no tech stocks or mutual funds. One retail, maybe. Nothing overseas unless a global fund.
Be patient and not greedy. Its monopoly money unless its sold. 10% gain, I cash in.
Don't overlook bonds. REIT's when in season.
Don't listen to Cramer's boo-ya picks but read his book!
8-12% a year for past 4 using this system.


For safe and never go down investments, Real Estate is where the real money is! Not residential. Trump's main profession is, ?

@ Socrates,
I live in the US but avoid the stock market here like a plague. Don't judge the Nigerian stock exchange based on your US experience. The numbers are SOOOO different.

STock market in America is characterized by volatility, but mutual funds are a safer bet, and sometimes offer a better return than stocks.

i really want to believe that the nigerian stock market is about to crash not because most of these banks are coming out for IPOs or Public offers for the second or third time regardless of the money they get from IPOs they still source for foreign funds and then 3/4 of ther profits goes back apart from that fact sorry to say this Nigeria has always had problems with Transperacy so i dont think NSE is totally dependable can anybody explain well what happened to trancorp why was the TS lifted and then fewdays later it was placed back ,
my advice for now is that if u re going to invest look for the big names and UBA is out of it to me that bank has transfromed with the help of Chicka Mordi and so on God help us sha, i will stick to 1st bank afri bank
and my second advice is if u have spare money u can throw it into the stock market for long term that way u wont need to worry much

Do u guys know that Nigerian stock mkt had the highest returns all over the world? that sounded too good but i really hope it will be like that

I don't want to write an epistle but I could see clearly the danger of half knowledge. I echo some of easimoni's thoughts. Also, NSE is way different from other markets. When other world markets were tumbling few months back, NSE was just on a bullish run; immune yes, immune from world tumblings. So that in itself throws your credit crunch theory out the window. Those of us who have been following and investing in NSE for years know this. Scaring folks by throwing out baseless stats and allegations without solid facts is boloni and down right criminal. Everyone should know what and what not to do regarding investing in Naija market. If you are in doubt, read the stock market tips thread  that alone should more than put you on the right path. The discussions are very sound. There's no investment that is not risky. Naija market is like a sponge responding to the basic rule of money. i.e money flows to where it is appreciated. There're severally initiatives by the government and private sectors that would continue to make Nigeria a very profitable place to invest in. I can't possibly go into all of them now.
Moreover, please if anyone does not have solid hard facts, refrain from blowing smoke up our rear ends. The folks on this board are intelligent; therefore, endeavor to backup your statement with a link/or links. Thanks.

this is all a matter of perspective
some see saturation and a crash, all i can see is opportunity and growth based on my own reality.
in time to come,the dooms day preachers and soothsayers of today will come in to pick the leftovers.
while we invite people to a banquet,we don't beg them to come.
invest if u like or keep crying wolf.
peace to all

@Sweet T
still waiting for you to tell me,
which banks CEO was recently arrested in lagos for stock fraud?

@hbrednic
  Am eager as you are to know which bank's CEO that is.

@all
We just need to go to the right people and make the wisest decisions wrt stocks ownership.
Peace

The folks on this board are intelligent; therefore, endeavor to backup your statement with a link/or links. Thanks.

An intelligent person? Where!!! I blinked. On the net? No way!!! Time to go snowboding in Hell and listen to Big Red's mad fittle skillz!!!

So how much "proof" you guys need? Why am I googling for you anyway?  "please if anyone does not have solid hard facts, refrain from blowing smoke up our rear ends". If you more of less call us lieing scum, shouldn't you prove us wrong and "have solid hard facts, refrain from blowing smoke up our rear ends?"  Gotcha!

Its www.google.com and I signed you up. I'll wave the fee's. Type "cooking the books" in search box. With me? 2nd link, click it to go http://money.howstuffworks.com/cooking-books.htm
"One commonly accepted incentive for the systemic over-reporting of corporate income which came to light in 2002 was the granting of stock options as part of executive compensation packages. Since stock prices reflect earning reports, stock options could be most profitably exercised when income is exaggerated, and the stock can be sold at an inflated profit.Newspaper and television journalists have hypothesized that the stock market downturn of 2002 was precipitated by reports of accounting irregularities at Enron, Worldcom, and other firms in the United States."

"a massive 50-year scheme to defraud the public"
-http://www.library.ucsf.edu/tobacco/litigation/uspm.html

Five Steps to Cooking the Books (and Getting Away With It)
http://blog.wired.com/business/2007/08/dells-5-steps-t.html

"Cooking the Books: How Clever Accounting Techniques are Used to Make Internet Millionaires"
http://www.pbs.org/cringely/pulpit/1999/pulpit_19990527_000396.html


2006 HP Spying Scandal
Adelphia scandal
BAE Systems bribery scandal in Saudi Arabia (Al Yamamah contract)
Bre-X scandal
Clearstream, which has been qualified as "the greatest financial scandal in Luxembourg" (Clearstream is a clearing house, i.e. sort of a "bank of banks", used to centralize credit & debit between banks and other financial organizations). As of 2006, it hasn't been resolved yet.
Compass Group, bribed the United Nations in order to win business.
Enron accounting fraud, involving Arthur Andersen
Exxon overreporting of oil reserves
Fannie Mae underreporting of profit
Firestone Tire and Rubber Company for use of child labor
Ford Pinto scandal
Guinness affair
Hafskip's collapse
Halliburton overcharging government contracts
Harken Energy Scandal
Lernout & Hauspie accounting fraud
Lockheed bribery scandal in Germany, Japan, and Netherlands
MG Rover Group accounts and pensions scandal
Morrison-Knudsen scandal Led to William Agee's ouster
Nortel executives overstate post-dot-com recovery earnings in order to earn bonuses
One.Tel collapse
Options backdating involving over 100 companies
Parmalat accounting scandal & mutual fund fraud
Phar-Mor company lied to shareholders. CEO eventually sentenced to prison for fraud and company eventually became bankrupt.
RadioShack CEO David Edmondson lied about attaining a B.A. degree from Pacific Coast Baptist College in California
Refco, Inc. commodities & futures scandal involving hidden debts involving underwritting firms Credit Suisse First Boston, Goldman Sachs, Bank of America Corp.
Royal Dutch Shell overstated its oil reserves twice, it downgraded 3.9 billion barrels, or about 20 percent of its total holdings.
Salad oil scandal, where millions in loans were obtained on largely nonexistent inventories of salad oil
Tyco International
Worldcom
Xerox alleged accounting irregularities involving auditor KPMG, causing restatement of financial results for the years 1997 through 2000 and fines for both companies.
David Wittig scandal
Epicurum fund/Parmalat
Mutual-fund scandal (2003)
AIG
Marsh & Mclennan

http://en.wikipedia.org/wiki/Corporate_abuse

Awake yet?

Inlighten this "half knowledge" dumb arse born yesterday primal thinking noob! Plz?

Or shall I explain how, why and the grey area created by setting up front corporations, partnerships, LLC's, corporate personhood,  artificial entities, collectives, companies, co-ops, corporations sole, estates of deceased persons, European economic interest groupings (EEIGs), flow-through entities (FTEs), municipalities, natural persons, political action committees (PACs), trade unions, trusts, fraud, Sarbanes-Oxley Act, unincorporated associations, corporate manslaughter and all that fun stuff.

"Enron did not take advantage of loopholes"
Limited partnerships were created to hide debt and losses. Loophole, cooking books, fraud to name a few.

"SweetT, where did you gather such an unfounded allegations that all companies tweak their financial report"
Not all but many. Guess you don't watch CNBC or Bloomberg much.

Stocks go up or down here. So Nigerian stock go left and right? Doesn't matter. Just be diversified so when one sector falls another will hopefully go up. Its just a form of gambling. Better odds and quicker returns siting at a Vegas black jack table or sporting bets.

"Only once you admit you know nothing, do you realize you don't know anything" -Albert

Sweet T:

Can you imagine telling over 60% citizens that is struggling with basic neccessities of life to go buy a bank stock?? That is why some banks and companies kept extending their closing date because there are not enough takers! I even heard that some people that bought last year has yet to recieve their certificate !!

Public offers are voluntary!
There have been so many public offers before now and there will be many more after.
You don't have to invest, there is no compulsion.
Evidence also suggests that investors love public offers. I have a friend who only buys public offers and has been doing so for the last 5 years participating in 90% of all offers and he is not complaining because the returns have been too good to be true.

First Bank, Oceanic, Dangote Sugar, UBA have all raised many times more than they wanted this year. Investors are still willing to buy so the claim that there are not many takers is largely unfounded and incorrect. FBN wanted 100BN, they got 470BN, INtercontinental got 700% what they wanted, the list goes on.
If there are no takers, there'll be no pos.

@Temmie 10
Hmm, this should qualify as a final word on this issue, though i secretly love the post of easimoni
But look at it this way,these banks want to desperately become big players in major sectors of the economy and to do this they erquire large amounts of capital( figures that would give u an headache!).It takes investionary caution to know that nowadays with the plethora of PO's,u av to invest wisely.Shikena!