₦airaland Forum

tagonn077:
so you mean when Dangote Refinery comes onboard, you wont partake in its IPO?

There's need to always put things in context.

If at the point of listing, the refinery already controls over 70% of the domestic market, and listing is done at $30bn or less, if you're claiming you don't want to buy based on some inflexible principles, the question then would be whether you will even get allotments.


When MTNN listed at N90, there were days people lined up $20m equivalent (in a market that typically traded $15m for all stocks) wanting to buy, they weren't able until the stock went up nearly 100%


One of the funniest things I read on this thread that time was a guy who out of frustration was seriously suggesting that we sued MTNN and NGX because his purchase orders weren't getting filled 😁😁😁😁😁😁😁😁😁😁😁



My point is, a good investment strategy requires that you run the numbers and read the dynamics first to determine whether of not the offer is worthwhile instead of just saying you won't buy cos it's a new listing.

SonofElElyonRet:
Hope they make an exception for y'all but we know that investors can and do lose their capital when a business fails

Technically, buying negative equity is turning your money to less than zero.

If you pay N5, for a business with a book value of -N1, it must be that you have your reasons for thinking -N1 is a good deal for your N5.


If not for limited liability nature of companies sef, as it is now, the shareholders would have had to contribute more money to pay up the creditors of these banks. Like courts would compel every shareholder to pay additional N5 per share to the company's creditors, on top of their lost investments, so negative equity is a really terrible thing, except in cases of businesses like MtNn and NESTLE when it was obviously transient.


I think we need to balance the perspective.


It's certainly uncomfortable for anyone to go through this experience, but if the exchange has made the bank disclose their results publicly, I think we should also do our own DD.


We can all learn from this and adjust our strategies accordingly.

Even if Alhaji IPOs at $40bn
Who's to say Ote$ won't push it to $60bn or higher in the first month.

yMcy56:
Just saw the headline....
Suspension was placed on the trading....
I mentioned it earlier
Na wa ooo

** Learnt they can appeal within 30days....

**Pls anybody knows what will likely happen thereafter?

I don't know. My only memory of this sort is SKYEBANK's which I happened to exit the very day their license was revoked. Theirs even came after market close,.


Theoretically, if the company still has good shareholder's fund, you could get the liqud portion of the book value after they're liquidated. Also there could be an EGM where you shareholders vote and decide to pivot into other businesses - with the existing shareholder's fund plus likely new capital from you guys.


If the talk about appeal is from an AI, don't put much thoughts on it.

Yet there's bid for 10 million units for anyone who need to exit

yMcy56:
ASO SAVINGS & LOANS
I learnt reconstruction of 3:1 has been done already.......but one over-sabi officer lifted the suspension earlier without carrying out necessary changes and adjustments..

The was suspended back thereafter...

License's been revoked!

0.08% stampduty to be scrapped next 2 weeks

That's N1m extra income on every N1.25bn traded (buy/sell)

handsomebolanle:
@PaEmma
@Nosa2
@AwesomeJ
What do you think about TIP PO.

If I’m to pick about 300k unit. Would you suggest an alternative?

Abeg help a brother/son.

Based on current market sentiments alone, I'd say you stand to already gain 20% given the market premium vs the offer price.

It touched N13 yesterday compared to N9. 5 offer price.

But market sentiments can change in a hurry.

There may be people who have jumped in solely for the purpose of cashing in on this spread, if the new shares get listed, they may easily depress the price by putting just 50m units on offer.

That's one angle to look at.

Another angle is that even this current price might be getting defended cos of the offers, and that defence might no longer exists after the offer.


Those are the perspectives I have regarding the attractive discounts on the offer price.


For pure fundamentals, the stock is doing below 5x earnings multiple, which I don't think is bad.

For FY '26, they will have to grow their already impressive 2024 numbers by over 100% to maintain PE below 5x.

Both offers will increase their OS by up to 125%, so it has to be that the new N10bn cash injection can help them grow earnings by an extra N2.5bn to around N5bn next year.


For dividends and technicals, I think others will add their perspective.

So weigh everything and decide.

I need to close my crypto wallet completely next 2 weeks cos of tax implications. Bitcoin cannot be showing me shege and I will still be racking my brain to calculate net gains. I'll just wrap it up.

Let me know my income channels are now:
Salary where taxes are deducted at source and
NGX when the law makes me tax free 😁

Then rental income now. I will net off maintenance sha. The calculation there should be straight forward.

I've now officially crossed N1bn in the 4.5months since I started using my trading app.

That's N5m in fees to my brokers and 1.4% net margins for me.

Next goal is to shrink the time it takes to 3 months.

Valthegreat:
Please who gets this funds directly, federal ministry of education, his foundation distributes among the 36 states and F.C.T ministries/department of Education or his foundation identifies projects to fund directly at education institutions nation wide. It is better the later is the case because if the former is not more than 60% of the funds will touch education sector for real.

Exactly.

In a lot of cases, the funds go towards direct fees payment and quite likely stipends to tens of thousands of students per year. Alhaji is too smart to leave this kind of funds with politicians.

handsomebolanle:
Dangote 1Trn scholarship…

Some money should flow into education sectors.

That man is the only societal figure I rate in this country.

One man committing N100bn to education every year, that's already more than what almost all state governments commit in therir entire budget. God will continue to spare his life.

Imagine buying fuel at N700.

If we only depended on the political reforms, dollar might have hit N2000 by now with PMS doing 1500.

emmanuelewumi:
The mutual fund is Naira denominated, so I borrowed naira against it and used it to buy dollar which was invested in Eurobond.

A month after Yetunde my account officer told me I could borrow against my Eurobond Fund, which I did and got additional loans which I used in buying dollar at N1000 then increased my Eurobond holdings.

Yes sir.

KarlTom:
Efficiency is ALWAYS important.

That's one reason we have upgrades and updates.

okay sir.

I was speaking from the angle of whether or not the code execution needs to scale.
Earlier this year OpenAI spent about $13,000 per task to prove that their frontier model at the time (O3) could get new high scores in a particular test benchmark(Arc AGI). Their emphasis at that point wasn't efficiency but accuracy. Do you get my point sir?

For Pa Emma who talks about borrowing, this is the maths I see:

Imagine I had N45m in a mutual fund account, and I wanted to buy Eurobonds when dollar was N900

I could simply have used my own funds to buy the $50,000, then leave it to grow at 6% for 3 years compounding, I'll end up with $60,000 simple.

Pa Emma borrows N50m at 9% interest rate differential instead -maybe he leaves the mutual fund to compound at 15% earning N26m in total interest, but pays 24% interest which is N12m per annum and N36m in 3 years. The interest paid on the loan is N10m more than what's earned on the mutual funds. Yet both strategies leave him with $60,000.


That's the inefficiency I see, but for him, efficiency may not be the emphasis of the strategy.

deathwing:
The aim is to beat inflation/hedge against the currency, not be predictable. I think you are complicating matters by borrowing (and therefore paying interest) against funds to invest in eurobond, when you could have just invested in the bond in the first place.

My point always is let everyone stick to what works for them.

You can write a 100-line code to determine a leap year, while someone else chooses to leverage existing libraries and writes it with 2 lines.

As long as the code runs accurately, efficiency is not always important.

Valthegreat:
That means your Detty December needs to be really Detty with a lot of thanksgiving.
Honestly, I don't know how all these hard men enjoy their life with a lot of debt hanging on their neck. I do believe that they no longer have conscience, I don't know when I will be able to grow tough like them walahi.

I tell you, For 5 years, I couldn't grow my portfolio either.

The little growth I've had this year will already make it Detty.

Agbalowomeri:
150k that time was more than $1k

That's his point I guess. Maybe yours too
The rent should now be at least N1.7m ($1200 equivalent) but is only still 850k

Valthegreat:
@ the bolded, was it really underestimation or inflation in prices of cost of materials multiplied your estimates, except both contributed anyway.
When I completed my house in December 2019 I bought the last batch of cement @ #2,400 per bag (and I was angry that I was buying at a premium) fast forward to 2023 a bag became #10,000 meaning that it would have cost over extra 150% to complete same size of project just within a space of 3years. Inflation no be anybody's mate for this country just that we are resilient people coupled with the possibility of corruption here and there that almost everybody in the country are benefiting from. Besides, if the kind of inflation that happens in Nigeria happen in all these western countries where black is black and white is white most times honestly many of them will commit suicide.

You're right, It was both
My first ever building, yet I chose one so big that the solid decked area is above 350 sq. metres.
I could have started with a bungalow or a 150 sq metre duplex.

This is my first christmas being debt free in 5 years

emmanuelewumi:
I disputed because I was not into fixed income investments then, I started buying were yields were over 20%.



The only one I got at a yield of 18% which was bought this years, when I sold some Presco shares

That Emefiele's second term was all shades of shege sir.

He messed many things up imo.

emmanuelewumi:
That was why I said I bought at a discount. Buying a bond at a premium or a discount is determined by the prevailing interest rate and yield of bonds

I didn't dispute your claim.
The whole point is that the fact that you bought at 20% yield doesn't mean someone else couldn't have bought at 13%

When the instrument was originally issued in 2020, it bore a 12.98% coupon despite it being the longest possible tenor of 30 years.

You bought either at secondary market or as a reopening issue 4 years later when prevailing 364-day yield were even close to 30%.

That's the full picture sir.

@emmanuelewumi

emmanuelewumi:
The coupon is 12.98%, but I bought it at a discount at N70 or thereabout thereby increasing my yield and I will sell at N100 when it matures

So you shouldn't have disputed the 13% yield mentioned.

Cos you almost made it seem like it was a false claim.

emmanuelewumi:
I am trying to get the exact date I bought 2050 bond at a yield of over 20%


Current MPR is 27% and average yield on a 10 year bond is less than 20%

So, imagine what yields were when MPR was at 11%
Your bonds are probably 2049 bonds issued in 2019. That's the longest dated bond I know of.

emmanuelewumi:
I was referring to FGN bond and not Sukuk.

Can you share evidence of the offer. 13% about 3 years ago get as e be

MPR was 11% 3 years ago.
Why does 13% feel strange?

Odunharry:
Yes you are correct. Bond is tax free

Thanks for confirming.

Valthegreat:
If I didn't raise this topic today perhaps I wouldn't have known that informed investors are this averse to real estate (rental income) investment. But all investment books are always talking about cash flow of which rent is among the most strongly recommended?

Those investment books are probably written by authors in markets where fixed income yields are between 1-5%.

If that was the case here, then their advise would have worked.

Fixed income yields determin a whole lot in investment markets. It's also the reason why 20x earnings multiple is an acceptable valuation there. In Nigeria 7x is more like it cos of our yield levels.

Personally, I started my building project in December 2020, cos Emefiele kept fixed income yields below 2%,

It was so bad that if you bought T-bills with N5m, your earnings couldn't even cover the bank charges, we were seeing discounts of 0.xx%. So I couldn't do naira fixed income, then he brought another silly policy of inflow vs cash for dollars where dollars deposited as cash couldn't be transferred to buy dollar funds, I could get 6% from SIAML at the time but no way to transfer to them, since my dollars were sourced as cash and deposited. SIAML too also changed their minimum from $1000 to $20,000 for whatever reasons.

I hate having idle funds, I wasn't this experienced in trading, and I underestimated the cost of building by at least half.

Valthegreat:
This is very elaborate. Learnt a lot here.
Thanks so much.
Besides I sent you a mail, kindly respond.

I've now responded.

SonofElElyonRet:
Your AI isn't accurate. There are exceptions daada.

The UK properties I mentioned give 10% - 12% p.a. and there's a 25 year government backed contract. If you want to peruse the materials, I can send and also forward your name and email address/number to them so they can reach out directly to you (no commitment on your part). You are not required to pay me any agency fee as I will get a referral fee (not much) from them but you can appreciate me oooo
Note that inflation is an unpredictable factor in Nigeria. Also diversification is wise

Do you care to shed more light of why those properties haven't been completely bought up in a hurry given that fixed income yields in the UK is under 5%


I mean if fixed income yields in Nigeria are around 15% and people still buy properties with 7.5% rental yields, even without any rent guarantees.

One would expect that properties with 10-12% rental yields in a market with 5% prevailing yields should get scooped up quickly without needing any referrals.



Can you shed more light as to why it seems the properties have more supply than demand?

Streetinvestor2:
Does it mean that the company who is ready to collect 28 million for 15 yrs
Then return the property to the land owners equally in 15 yr.How much was used in construction of such property to warrant such rent.i see the property as lacking standard and should not earn such rent based on current cost of good building materials and finishing
Finishing here is interior and exterior. Walahi u go do maintainace taya

This is a crucial question you've raised!

So the developer got the land from the property owner for only 15 years, which is the exact time he's expected to realize his cost plus profit.

Then he sells off that 15 years access to you today, so that he immediately recoups his cost.

Then it has to be that the cost to build the 2 flats is below N28m, maybe even below N15m if you factor in the developer's cost of funds and his profits.


So what kind of flats are you able to build 2 units for N15m in today's naira?

Like N9m on the 2 bed and N6m on the one-bed?


That's including general things like septic tank, overhead tank, borehole, gate etc which you'll split into 6 to get the cost per flat.


Except if I read correctly that the developer didn't actually build from scratch but only renovated.

If that's the case, then the more serious question is now:

What's the original owner's gain for releasing his house to the developer for 15 years if all the developer did was renovate and will now deny him access to his property for 15 years at which point the building might be in a worse position than it was before the developer's renovation.

Streetinvestor2:
I don't understand u.if you lock your money now at 17% for 10yrs bond.How is that your business if bond rates drops after a yr.
And is obvious u have made up your mind on the lease thing so why else are u looking for people opinion .Oga if u like u can go do dirty December with your money..lol

I think he probably doesn't know that bond coupons are fixed regardless of prevailing yields.

Then about seeming like he's made up his mind, I think the issue is that like pa Emma said, he's being offered the lease at N1. 87m per year, whereas he can re-lease for up to N5m per year with good demand, so he doesn't want to throw away such "seemingly good" deal in a hurry.

We are adding our own individual perspectives so he can have a balanced view and take what decision is in his best interest, and suits his peculiar situation best.


I used to say I would never do real estate cos of the low yields and illiquidity, I mean if I have a N100m portfolio and I need N10m, I can sell some stocks and sort myself, not so with real estate, you can't sell of 1 room from a 5 bedroom duplex that's worth N100m.

Even if you put up the entire property for sale, you might wait months before you close a good deal.

I never liked it, but I found myself in it 😁

Valthegreat:
Thanks for your contribution.
But we all are expecting FGN bond rates to fall as soon as possible as inflation eases out which means i can on enjoy this for perhaps just one more year. Or do you visualize a possibility of stable bond rate @17% going forward?

The beauty of bonds is that once you lock in, the coupon rates are fixed.


I think there's a June 2038 bond with a 15.4% coupon.

If you're able to buy it at par or a little premium (maybe N1020 per unit), you have the 15.4% locked in, even if yields later crash to 5%.

You get N4.3m tax free if I'm not mistaken.

Whereas your N4.7m rental income would be liable to 15-23% tax meaning you might get below N4m. When you discount maintenance, rent loss to vacancy, tenant default, it might be below N3.5m or below N3m in some cases.


Plus like others have said, you're not getting the N28m back after 15 years.

From experience, rental yields are super low, what makes it better is the capital appreciation if you own the building.

emmanuelewumi:
Okay.

When I read it, I thought it was a purchase.

Will he pay the N28 million upfront or he will pay per annum at about N1.7 million

Upfront sir.
That's why they're asking for just N28m for the entire 15 years, when the actual rent over that period could potentially be above N70m.