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Nairaland Forum / Dupeodus's Profile / Dupeodus's Posts
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Hogwarthtrades: No. FBN has not explained the hugh N681 billion FVTPL gain. If you go to note 10, there is nothing there. They just restated the line and amount. If you go to note 19 where FVTPL are listed, you see a line for derivative assets for N617 billions. On the face of it, this looks like a booking of paper assets for inclusion in P&L as FVTPL gain. However, there must be an underlying transaction that gave rise to this asset which FBN did not disclose. Given the size of the asset and its impacts on the p&l, the underlying transaction merits disclosure. Unlike the other big banks, FBN has a hugh figure of N350 billions as foreign exchange loss in the face of a massive devaluation of the naira. What this tells me is that the derivative transaction created a hugh foreign currency liability for FBN. All of these needs to be disclosed. Hopefully, the auditors will not let FBN get away with this level of opaqueness amd there will be disclosure in the published financial statement. 10 Likes |
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ositadima1: Russian crude is heavy crude. The closest to the Nigerian light crude that the Dangote Refinery is built for is American crude. |
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BullBearMkt: I bet this will be worked out with NNPC. I do believe that the local market will be supplied with refined products from crude sourced locally while refined products from imported crude will be exported. 2 Likes |
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stcool: So, what do you guys expect? Leave capacity created at billions of dollars idle? It is clear that given Nigeria's commitments for crude supply and the PH refinery, they cannot meet the requirements of Dangote refinery. There was even a delay in production startup for this same reason. We should be glad that the value added on the imported crude is happening in Nigeria. |
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ganisucks: Amazing! None of you guys have made any attempt to falt the analysis in that BBC report. The facts therein are as contained in the deposition of the CSU registrar. Yet, Chigozie must go. This is fascism! 10 Likes 1 Share |
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raumdeuter: The no. 2 question was answered by CSU. CSU acknowledged that the date on the certificate presented by Tinubu to INEC was wrong. They swore to an affidavit that the mistake was theirs. How else will an institution acknowledge that they issued a document? |
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KanwuliaExtra: So, CSU is now in collaboration with Tinubu. Remember Tinubu went on to become a CPA after graduation. You guys have no credibility. 1 Like |
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jude79: And where did you get this from? One of the certificates given by CSU to Atiku is that of another person that graduated from the same college as Tinubu. The fonts and general appearance of the certificate is exactly the same as the one presented by Tinubu to INEC 1 Like |
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KanwuliaExtra: Which certificate did Tinubu forged? 1 Like |
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mtngloetiartel: You are only hanging on a thin rope emphasizing a detail that I am sure is explainable. CSU all but certified the certificate presented by Tinubu. CSU produced the certificate of another person from the same college that Tinubu graduated from. The fonts of the two documents and general appearance are exactly the same. CSU acknowledged the descrepancy in the date on Tinubu certificate buy swore to an affidavit that the mistake was theirs. What else would validate the authenticity of the certificate presented by Tinubu? |
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mtngloetiartel: And where did you get that from? From that Nigerian Concord that has no name of correspondence mentioned? |
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Trinitycian: Whoever is using this as a defense for Atiku must think Nigerians are stupid. Yes, Atiku has not broken any US law. It is Nigeria that Atiku broke its law. It's not the US problem if Nigeria decides to hold Atiku accountable or not. The US took care of its own. The US legislator that was Atiku's co-conspirator in the criminal enterprise contravened the US foreign anti corruption law. He was tried, convicted and jailed. There is no US law that Atiku contravened as he is not a US citizen. That does not exhonerate him. |
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petaling: Newbie? Hmmmm. Orísirísi. Oga Wanajo don suffer. 2 Likes |
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Mpeace: The guy makes more money from his books and seminars than following the strategies he recommends. 2 Likes |
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Sorry, where did you get your information from? I live in the US and I filled a car thank I used to fill for about $65 at close to $100. It's premium gas though. The point is the unnecessary subsidy of a product largely consumed by the rich in Nigeria rather than taxing it. 9 Likes |
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emmanuelewumi: Quote Does that means Nigerians don't have an eye to see opportunities in this sector? Unquote That question illustrates the devastating effect of corruption in it's various manifestation on the Nigerian economy. Ordinarily, going by human nature, any business that shows super profit as PRESCO and OKOMU has demonstrated in the oil palm sector should attract more investments from competitors and the super profit should last for a short while. However, if you have other competing 'opportunities' either through extremely lucrative government contracts or a monopoly business protected from competition by government's laws or actions, why would you risk your capital on something else that gives lower, though juicy returns and demands more work? 2 Likes |
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Lion123: Capital Gains Tax is in the Nigerian Tax Laws. Every nation in the world taxes capital gains. Nigeria has the lowest tax receipts as a percentage of gdp even among West African countries by a very wide margin. We want government services but do not want to pay taxes. Would the money come from the air? We cannot continue to use the excuse of corruption to resist taxes. 4 Likes 1 Share |
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[quote author=Lion123 post=97116666]It's amusing. Banks in SA are trading at a PE of 30+. Kenyan banks are trading at an average PE of 12. My beautiful, sexy Zenith which has CONSISTENTLY made 9-figures in USD (net profit) in the last decade (even under Buhari's dark clouds), and has billions of dollars in reserves, is trading at a PE of 3. It's ridiculous. [/quote ] PE is a function of perceived risks. With the way the Nigerian economy has been run in the last 10 or so years with inconsistencies and policy somersaults, the risk premium is very high. One thing our economic managers have not learnt is that the greatest asset of any economy is the intangible of investor confidence. 3 Likes 2 Shares |
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samguru: Look at it this way. The manipulation AIICO majority shareholders have been doing in the last 4 or so years has been such that they want to capture a greater percentage of the company for themselves. By the last AGM of Tuesday, they have achieved that. Unfortunately, both NAICOM and SEC allowed it. Except for the headwinds of 2020 in the ENDSARS protests and the zero coupon treasury bills which I anticipate will negatively impact their results, this is not the time for anyone that held on to throw in the towel. For the benefits of the majority shareholders and the new Leapfrog investors, they will now reflect the full potentials of the company in their financials. 1 Like |
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Mcy56: Aiico still does not have the respect of the investing public. If one looks at the trading pattern over the last two or so years, aiico's price goes up when an insider is buying large chunk of shares. It goes on full bid for a while with price appreciation after which it settles and the price gradually depreciates again. For me though, the fundamental compelling investment thesis remains. The market will eventually come to terms with it. Having said this, as an insurance company, I am currently concerned on the impact the recent ENDSARS riots will have on the 2020 financials of the company. Whatever it is though will be short lived. 3 Likes |
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OBAGADAFFI: My exact thoughts when I was doing my post but forgot to add it. |
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OBAGADAFFI: The game of the AIICO majority shareholders and managers is clear. They want to seize the rest of the company from minority shareholders. The rights issue is unnecessary. They do not need the capital. However, they will divide the unsubscribed shares among themselves because many minority shareholders may not be able to pick up the rights or forced to sell a portion of what they currently have to pickup their rights. Either way, they win. After all of these, they will reflect the true state of the company in their financials. Why the regulators will allow them to get away with this is mind boggling. From the point of view of a minority holder though, AIICO is a very low risk enterprise with currently a pe ratio of about 1.7 even if you base it on 11.3 billion shares including the private placement shares. This has not factored in any growth for 2020. The rights issue will further dilute this but it takes the pe ratio to 4.25 at 2019 earnings level. Growth will reduce this ratio further. It explains why they want to corner this company. 2 Likes |
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onegentleguy: I don't know if anyone can determine a fair price for any Nigerian equity. I do know though that anyone selling at anything less than N2.00 is passing up a big opportunity. 1 Like |
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onegentleguy: The infidelity of the majority shareholders not withstanding. Anyone that understands the dynamics of AIICO'S business knows they are sitting on a gold mine. They keep amassing government bonds at no cost. |
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Heishere: Like I said once, if you chose to invest in Nigeria's stock market, you chose your poison. The management of almost all the companies are corrupt and do outrageous things sometimes to the knowledge of the regulators. Nothing came out of all the email I wrote to the SEC and NAICOM on AIICO and you see their shenanigans everytime they publish their financials. The thing is that they are sitting on a gold mine and they know. As an investor, even though you see that they are doing everything to ascribe a good portion of that gold mine to themselves, as long as you can get a portion of it, you participate as much as you can. 2 Likes |
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Heishere: The AIICO q1 result is a continuation of aiico's management practice of depressing the financials to keep the stock price low so they could finish whatever they need to do. The current need is for the MD that was appointed lat year and had no shares before to accummulated shares and is currently doing it at relatively low price. Look at that q1 results again. The last line is a finance cost of slightly over =N=1 billion naira. This is a company that is flushed with cash and government securities. The only liability in their book is the IFC loan of $7 million. I will even grant that included in that finance cost is maybe =N=350 million in the depreciation of the naira and you add that to the normal quarterly cost of about =N=50 million related to the loan. That is still =N=400 million, a good 600 million less than what was charged. But you know what, let's even leave it as the first quarter charge, unless naira completely goes to the gutter, it will not recur in subsequent quarters. That gives you an idea of what the year will look like. This is is addition to an unexplained charge of =N=975 million that AIICO continues to charge every quarter to add to the 'other contract liability' line. By the end of the first quarter, about =N=6 billion has been accummulated on that liability line that AIICO has never explained to whom or what product they owe the money to. Every quarter, it's a charge to the P&L with a credit to that liability. I have checked the financials of other insurance companies and they don't have anything similar. Lastly, you have to consider that the Leapfrog investors bought at =N=1.20. they are no fools if you research into them. They must know what they are buying into. 3 Likes |
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maishai: It depends on your objective. If you were going to use the dividends to buy more shares anyway, you will prefer the bonus because that way, you do not need to pay tax on it. If you need the dividend, then you sell the bonus shares in the open market for cash. It is fantastic corporate finance practice. My disappointment is that the bonus shares is only 1 for 5. I expect it to be close to 1 for 1. But then, you still do not know if the new shareholders will share in this bonus share. If they will not, then 1 for 1 will significantly dilute their own portion. 1 Like |
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[quote author=Dupeodus post=89301347] Now that we know the investors in the Private Placements, my view of AIICO has changed somewhat in favor of the company. I do believe that the current major owners, the Fajemirokuns have interests in Leapfrog but will not be the sole interest. That puts them in a conflict of interest situation in that any dilution of the interest of the existing shareholders of AIICO will benefit their own holdings in Leapfrog but will dilute their own existing share holdings in AIICO. They therefore have to execute a balancing act to optimize their own situation. Given that over the years, AIICO has deliberately understated it's profit to suppress it's share price and some of those profits are currently being reflected, the new shareholders should not be getting the proportion of the company indicated by the number of shares they currently hold. To explain this simply, the investment of the new shareholders that brought in their money in late December 2019 did not contribute to the profit of 2019 which is significant. As a matter of fact, the N3 billion from fair value on Treasury Certificates treated as other comprehensive income should be part of the pat because the related increase in insurance contract liabilities coming from the same lowering of interest rates have been deducted from the pat. Other insurance companies treat it this way. To this extent and to be fair to existing shareholders, the new investors should not only not participate in the dividends on the 2019 operations, the company should declare bonus issue consuming most of the 2019 comprehensive total profits to the old shareholders. I am encouraged by the fact that the old major shareholder is not the only new investor, so, they would want to protect their portion of the old interest which protects the old minority shareholders to some extent. However, I expect them to do some balancing act to enhance the value of their new investments which is still at a cost to the old minority shareholders.[/quote I have to correct my posting above. The additional interest of the major shareholder in AIICO is not through an interest in Leapfrog. They actually made additional investment in the private placement through the same vehicle they were using before which is AIICO Bahamas. 1 Like 1 Share |
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austinkenneth: Now that we know the investors in the Private Placements, my view of AIICO has changed somewhat in favor of the company. I do believe that the current major owners, the Fajemirokuns have interests in Leapfrog but will not be the sole interest. That puts them in a conflict of interest situation in that any dilution of the interest of the existing shareholders of AIICO will benefit their own holdings in Leapfrog but will dilute their own existing share holdings in AIICO. They therefore have to execute a balancing act to optimize their own situation. Given that over the years, AIICO has deliberately understated it's profit to suppress it's share price and some of those profits are currently being reflected, the new shareholders should not be getting the proportion of the company indicated by the number of shares they currently hold. To explain this simply, the investment of the new shareholders that brought in their money in late December 2019 did not contribute to the profit of 2019 which is significant. As a matter of fact, the N3 billion from fair value on Treasury Certificates treated as other comprehensive income should be part of the pat because the related increase in insurance contract liabilities coming from the same lowering of interest rates have been deducted from the pat. Other insurance companies treat it this way. To this extent and to be fair to existing shareholders, the new investors should not only not participate in the dividends on the 2019 operations, the company should declare bonus issue consuming most of the 2019 comprehensive total profits to the old shareholders. I am encouraged by the fact that the old major shareholder is not the only new investor, so, they would want to protect their portion of the old interest which protects the old minority shareholders to some extent. However, I expect them to do some balancing act to enhance the value of their new investments which is still at a cost to the old minority shareholders. 3 Likes 1 Share |
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No, it is not too much. I don't know if the new investors will participate in the dividend. Even if they do, the total will still be less than N2 billion. This company has over N10 billion cash on hand talk less of the excess of government securities over insurance contracts liabilities. The company has also gotten approval for a rights issue. What is the company going to do with all that cash? The shareholders also need to come up with the cash for the rights issue. The company already meets the capital requirements of NAICOM. PharmAlfred: 1 Like |
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austinkenneth: It's an illiquid stock. One person with a reasonably sized order can push the price up. |
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rebekah2011: Each one his own. Did you see the amount of cash on the balance sheet? Did you look at the cash flow statement? For the past 4 years, I have followed and have been critical of AIICO's financial statement. I have seen the standards of the financial statement improve significantly over time up to a high level of transparency. There is still room for improvement that I know. My criticism surrounds the fact that AIICO has been significantly understating it's performance over the years to suppress the market price of it's shares to favor the majority shareholders in their private placement. Now that I know that one of the investors in Leap Frog, that view has been tempered somewhat. However, I still believe that as we speak, AIICO has more than =N=5 billion in fictitious liabilities that should have been part of profit before tax over the past 3 years. =N=3.2 billion of it is from 2019 alone. I honestly do not know why they are doing this. I do understand that this is counter intuitive because companies are generally known to inflate their results. 2 Likes 1 Share |
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