₦airaland Forum

ositadima1:
I would choose FCMB over UBA for a few reasons.

1. FCMB distributed 20% out of its earnings to shareholders (2022) for about 6.6% yield, while UBA distributed a whole 70% for 13.3% yield.

2. Since March, 2020 (pandemic) FCMB has grown by 100% (doubled) while UBA has done 50%

3. The OBV, on-balance volume indicator shows that UBA has had sell-offs here and there, even recently. FCMB shows slow but steady accumulation.

4. For year 2022, UBA is up 5.59%, dividend and price appreciation inclusive. FCMB is up 13.33%.

1. Based on last year dividends FCMB distributed about 20% of earnings while UBA did 33% resulting in FCMB dividend yield of about 6.6 and 13.3 % respectively. Thus for dividend returns UBA is better.
2. EPS for FCMB and UBA has been up and down over the last 5 to 10 years but both are trending up, with UBA appearing more robust in trend. Perhaps because it's tier 1 bank while FCMB is a smaller bank.
3. Cannot comment much on this right away.
4. The relative more appreciation of FCMB you noted is not under-pinned by something enduring that i see. Hence will very likely not continue. Rather it makes UBA more attractive for entry right away.

My major consideration is current dividend yield. Based on current prices of UBA at about N7.50 and FCMB of N3.00 expected dividend yield are 13.3% and 6.7% respectively. That difference in dividend yield is Huge. Also I estimate UBA and FCMB earnings per share yield based on these same prices at the end of the year will be 42.6% and 34.9% respectively if earnings of N3.2 and N1.05 are delivered just like the last audited results. Hence UBA will give back more money immediate in dividends while growing ones underlying investments at a faster rate.

RabbiDoracle:
I use "breakouts" for upward rising prices and use "breakdown" for downward movement of prices.

The banks I was referring to were NGX stocks.

For EMs (whether in Asia, ME or Africa) , I still expect a decent move in their stock prices before the global depression hits commodity producing EMs.

Thanks for the clarification.
I pray the breakout comes good with no breakdown before it happens. Sold a 10+ year NGN bond I had on CSCS above the price i bought it as interest rates are now low compared to when I bought it and placed the proceeds into UBA with a view of getting just very slightly more income. Bought the UBA at N7.50 but can see it closed this week at N7.40 even though online demands daily far outstrip supply. Seems a lot of people want it but at lower prices. But few are selling. Perhaps only desperate sales brought the price down. And not that it really wants to breakdown.

RabbiDoracle:
In my opinion, this will not have effect on NSE except when the global depression hits the oil producers and cause oil prices to collapse.

Banks will breakout rapidly and catch many unawares.

As for US stocks and Indexes, they still have a long way to fall. Portfolios will be blown over there and people will understand that everything that rises so rapidly must fall later.

Commodities like oil still have further rise to make. And that will be aggressive. This fall in oil is a move to prepare for the next leg higher. My $220 forecast for Brent still stands.

At a point, dollar will have severe devaluation. Since Fed has continued to tighten and raise rates to make dollar stronger and weaken other EM currencies, China will continue to tighten supply to ensure that they don't get cheaper goods with their strong dollar. That way, the little goods avaible in the West will have severe price increases as we see now. Higher prices, higher energy cost, higher interest rates on the those with loans and squeeze on available income will soon lead to protest in the West as cost of living crisis bites.

Fed strengthens the dollar hoping that they get cheaper goods from producers and hoping that this attracts funds into the US, but the reverse could happen where instead an outflow of funds from the West and you get no goods at all from China (due to their frequent lockdowns). That way all the money printed will remain with the West with no one wanting it.

Many countries in EMs and FMs will feel the bite.... Sri Lanka, El Salvador, Ghana, Pakistan etc. Soon the developed ones (weaker ones in EU) will also start to crumble. And their's could be worst.

Please what does banks will break out rapidly mean.

Is it their share prices will rise rapidly or fall rapidly.

Will this be only US banks & or other global banks in the Europe & Asia. How will it affect our banks in Nigeria.

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okafor67:
Please what is Morningstar premium access and how can one get it

It's part of their website that is not free that you have to pay for. Don't know the cost. It should be on their website. For someone investing mostly in Naija stock paying for premium is most likely not worth it.

ImperialCovfefe:
Interesting insights. The issue with this is conflating correlation for predictive signal. These guys and MSCI are mostly passive index guys. Most of their changes comes from rebalancing to reflect the constituent of their primary benchmark index

Yes matching an index could be a factor especially for index focused funds. But there are other factors being used. I guess most will be based on what they see is beneficial to their portfolios objective of capital preservation, growth and income. And it could be a short term or medium term or longterm based view.

BabsO2:
Snapshot of changes in top fund managers ownership of GTCO, ZENITH, UBA & FBNH from morningstar attached below.

Will be interesting to see what the snapshot will look like in a couple of months. Their holdings in ZENITH is still about the highest. GTCO numbers not properly updated. But I guess the holdings are just below ZENITH's.

MAZI (a ZA concern) seem to have picked up more FBNH from the snapshots.

Looking closely,

GTCO & UBA had significant net dumping by top fund managers based on this limited snapshots. Those with Morningstar premium access will see more. But this is fair enough info I guess.

While FBNH seem to have gotten a confidence vote from MAZI.

Not a bad idea to take these free snapshots monthly to get an idea of what some analysts holding peoples funds are doing.

BabsO2:
It's GTCO and Zenith that have the highest FPI'S. Are some of them pulling out or reducing exposure to Naija further this May. When the NGX data showing outflow for May-22 is updated will have a hint.

https://ngxgroup.com/exchange/data/foreign-portfolio-investment-report/

Snapshot of changes in top fund managers ownership of GTCO, ZENITH, UBA & FBNH from morningstar attached below.

Will be interesting to see what the snapshot will look like in a couple of months. Their holdings in ZENITH is still about the highest. GTCO numbers not properly updated. But I guess the holdings are just below ZENITH's.

MAZI (a ZA concern) seem to have picked up more FBNH from the snapshots.

It's GTCO and Zenith that have the highest FPI'S. Are some of them pulling out or reducing exposure to Naija further this May. When the NGX data showing outflow for May-22 is updated will have a hint.

https://ngxgroup.com/exchange/data/foreign-portfolio-investment-report/

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onegentleguy:
Don't give too much consideration to that part in bold.
The agenda might be to produce an Apc flag brearer from the south but not the president.

Lots to say, but I don't want to litter this place with political discuss.

At this time, investors are more concerned with having peace and security knowing their investments are safe, than having a given name as president.
Our politicians are all the same. ...some are just a bit better than the others.

As I said before; The mkt is in accumulation mood... sideways trading is expected in the days ahead... but overall positive trend remains intact!
Any pullback at this time should only be seeing as an opportunity to strategically align with select KEY fundamentally healthy coys. (some are already in a great entry zone)
So it's a good thing you're buying now.

It is well.

Long detailed piece as usual. Thanks. Investors and Mr Market will surely react positively to things that support the words in bold.

The Northern APC governors supporting zoning presidency to the South looks like a very wise step. Nigerian stockmarket may go up from coming Tuesday because of this, especially if well supported by the APC presidential primaries.

Let me quickly buy something on Monday ??

Mpeace:
current directors holdings as at 2021 is seen on the extreme right. But nothing appears on the 2022 column.
But also notice that Tunde Hassan Odukaleholdings increased substantially as against zero holdings in 2021. It appears the battle for control of fbnh might still be on.

Look at the current directors. All of them don't have shares. That doesn't look nice. They won't even mind lowering the dividends while increasing their emoluments. As it has no impact on them as they are not shareholders.

Mpeace:
Over 100% improvement from last year. But I noticed that except for Adesola Adeduntan, all other directors sold all of their shares between December and March.

I noticed nothing recorded against former FBNH directors as holdings at time of writing Q1. Doubt if they sold off everything. Perhaps they decided not to show their current holdings as they are no more directors. But then a foot note needs to be inserted to prevent ambiguity.

I noticed current directors don't have FBNH shares. That doesn't look good.

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Mpeace:
Poor dividend but excellent performance.
Eps from 2.45 to 4.17
Profit after tax from 89.7billion to 151billion.
The elephant could well be back again but lets look deeply into the result before concluding.

FBNH results need to be looked into deeply to understand the reason for the poor dividend payout ratio that is less than 10% of EPS. Perhaps capital adequacy ratio issues as customer deposits has been growing nicely.

Hope the delayed FBNH results will be good like the delayed PRESCO results. Not all delayed results are bad.

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gbengafaro1986:
FBNH making me nervous, its packing heat like some ppl know something we dont know

The soothing thing while waiting is Femi et al are mopping it up at N12

erwinschro:
Again, One man's debts are another man's financial assets. It is the holders of the debt that suffer more than the debtors. When the US government inflates away its debt, it inflates away ALL dollar denominated debts. Think about it, if the dollar is devalued then this is fantastic news if you are owing dollars because it is easier to pay back your eurobond.

Meaning debtor countries will not have a worse case but an easier pay off if the dollar devalues significantly. That's my thought as well.

It's all those who have saved in dollars that will be worse off in expectations of what their dollar reserves purchasing power.

Seunn11:
For debtors countries (in dollars), there case will likely be worse.

Why will their case be worse. If the debt is fixed rate, not callable anyhow and the country still has export earning power.

gbengafaro1986:
how does this issue affect EUROBONDS because almost every top Nigerian Bank has a eurobond offering?

Since there is a low probability the Naira will appreciate against the dollar even if the dollar devalues relative to major international currencies, my thought is in Naira terms, there will be no negative impact on Naija banks.

erwinschro:
The dollar devaluation is going to be very extreme IMO. One man's debts (US Government) is another man's financial assets (Holders of US T-Bills AKA everyone in the world). The US obviously cannot afford to pay their debts so the only choice is to inflate it away which they have already done massively with "quantitative easing". Once everybody wakes up and realizes their assets are being inflated away then the jig is up. They start selling their bonds when they realize they will be paid back in worthless dollars - and this is what causes these devaluations/currency crises to be swift.

But the dollar being over valued due to excessive debt no be today. It has been building up for a long time. Lot's of countries will be impacted if the dollar collapses. Difficult to imagine a massive sharp impact. There is still a lot of interest in sovereigns saving globally in $$$. The dollar still gained last week relatively to global major currencies due to demand. As there is still no other major global reserve currency like the dollar.

RabbiDoracle:
The coming dollar devaluation is going to trump what we saw in 2008. Just relax.

Dollar will be massively devalued. It will create a wealth effect in EMs. After the wealth effect, what comes next is what I don't know.

Foreign market has not started to run yet. This is just the beginning. It won't be a straight line down for them.

The dollar being over valued has been on for many years now. The cloud is getting thicker and thicker. Despite the cloud the dollar gained last week on most international currencies if i quote the news correctly. Even if the dollar is devalued with respect to international currencies, the naira is still under pressure to be devalued relatively to the dollar mainly due to insecurity. Insecurity is currently holding back $'s looking for Naira. Ideally many Nigerians earning dollars would not mind visiting home more and perhaps retire to Nigeria with a lower cost of living and to enjoy good quality fresh food. If this issue of insecurity clears NSE has an upward path from it's current lows.

emmasoft:
You fill a new mandate with the preferred account. It's better done at the registrar's office.

Thanks for the super fast response.

I have a question for any member knowledgeable on it to help me.

If one wants to change the account in which he receives his/her e-dividend in. As another bank is now preferred for getting it. Does one fill out a new eDividend form with each Registrar and submit it either at the bank or registrars office. ?

Mpeace:
lol. No result for now. They are still sending the result to the CBN for approval. Long thing.

Na real long thing. Another 1 to 4 weeks wait

Mpeace:
UBA result is not that bad. PAT of of 48bilion as against 38billion,
Eps of 1.14 as against 1.04 from last year.

Good PAT but bad comprehensive income.

Other Opex up ~20 % on a mix bag of reasons. But explicit in note 14 fuel/maintenance cost up by ~20%. But that line of cost is ~ a 5th of other opex. The revenue engines are delivering faster than any opex increase thereby yielding a good PAT

FBNH 3 days to go. Perhaps coming with Q1 together. Perhaps very bad. Perhaps Good.

RabbiDoracle:
Read note 15.

The N7b increase in other operating expenses was not due to diesel cost.

Out of this N7b, N6b was from :

- increase in deposit insurance premiums (+N1.2b)
-increase in AMCON expenses (+N2.2b)
-increase in advert, promotion and corporate gifts (+N0.3b)
-increase in administrative, communication and sponsorship expenses (+N1.2b)
-increase in Human capital expenses (+N1.1b)

Diesel and electricity cost was just a paltry +N0.3b increase.

Nigerian Banks have adjusted to the energy crisis happening globally and that is why they are operating reduced working hours. Some branches operate 9 am to 1pm, some 9am to 3pm. Some till 5pm.

In Germany, you are advised to shower cold. In France, you are told to wash your dishes or laundry only at the weekends to reduce load.

So the GTB N7b expenses was truly on "other operating items" .

Thanks for answering the question speedily. Good to see diesel cost is being managed with operating hours from your chat and not the cause of OPEX jump. However rising OPEX seem to be trending. Perhaps banks will see more AMCON expenses as this was the biggest in the note 15. But will not enough to shake profits due to revenues increasing faster.

Mpeace:
Cost of diesel and other economic factors will definitely hit companies. Tax also went up for the bank.

Stanbic IBTC operating expenses also up by about 30%. ETI's up by only 9%. NB's expenses up. Ikeja Hotels expenses Jumped. Looks likes cost of diesel is hitting all companies hard. Some companies will find it easier to pass it to customers. And increase their revenues to offset these costs and still deliver profits. While some will just have to take a cut in profits. So which companies will reap from this increased diesel costs?

Cadillac15:
Profitability on the decline

GTCO ops expenses has shut up by N7b (about 30%) comparing 2021Q1 with 2022Q1. Is this due to diesel or what?

On initial glance, Their investment securities interest income looks restored.