₦airaland Forum

Mpeace:
Forget kiyosaki. I have been following him on facebook for a very long time now, all his predictions have not come to pass so far.

The guy makes more money from his books and seminars than following the strategies he recommends.

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.

emmanuelewumi:
Presco is another company with a wonderful growth story.

Listed at N2.00 about 20 years ago, gave a bonus of 1 for 2 and currently selling at about N50

Stanbic IBTC Pension managers currently own 7.5% of Presco.

Unfortunately the 2 companies making billions of Naira and earning forex from agriculture are foreign owned, does that means Nigerians don't have an eye to see opportunities in this sector

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?

Lion123:
Meanwhile, my friend in the Presidency just told me that plans are underway to start taxing capital gains on NSE stocks as from next year. This Buhari is a funny guy.

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.

[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.

samguru:
AIICO insurance manipluations is on another level.

I think it is time for me to run

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.

Mcy56:
Sept 24.
I hope insurance/aiico bargain hunters took this serious then.
Small time, you will be paying for this free services.................shebi Mcy is unprofessional ni.

Aiico which you refused to buy at 79-82 kobo range is now 1.01 and you're queuing up at this price...........Una weldone.

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.

OBAGADAFFI:
They should just delist the company and take it private.

My exact thoughts when I was doing my post but forgot to add it.

OBAGADAFFI:
https://nairametrics.com/2020/06/16/analysis-aiico-insurance-and-its-confusing-capital-raising-efforts/

AIICO wahala

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.

onegentleguy:
Raking off surrounding RISK and attaching a cautious valuation model, I have a FVE of N2.37 for AIICO.

Again, NOT a buy recommendation.

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.

onegentleguy:
Chai !! ...imagine that vol on AIICO !!
Way above the highest daily vol YtD.(over 2.5x on average)
...price now @ N1.10

We called for a buy on AIICO @ btw 54-57k
...current mkt price is an over 92% gain !!

#stillbullish
#wemove

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.

Heishere:
That's quite revealing. But you have been saying this since 2018. Are they not done with the manipulation? Why then would someone invest in a company that manipulates their books?

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.

Heishere:
But their quarter 1 result is not good, so what is driving it?

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.

maishai:
Audio earnings,Management use style dilute owners equity, I know they will soon be in d market for funds, even 1k they did not give back....aiico will definitely sub 40k b4 year end

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.

[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.

austinkenneth:
Please can you let the house know what your updated view on the company is?

I think SEC and NSE should really stand up to this guys and their intent on appropriating the wealth of the minority shareholders to themselves.

If this cheating is allowed to pass, then SEC is just an audio regulator.

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.

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:
Did you say dividend of 20 to 25kobo. Ahh! That's too much na.

austinkenneth:
what's causing this surge in AIICO?

It's an illiquid stock. One person with a reasonably sized order can push the price up.

rebekah2011:
[They are selling AIICO PFA. The wrong move in my view.quote author=TLAX post=86788245]

@Bolded contradicts your opening comment.

I have never seen any company that dilutes shareholding and raises money via rights issue for fun. The group needs the cash and they need it desperately too. Barring poor market conditions they would have done the RO last year. That is why in addition to PP and rights issue, they are also selling their AIICO PFA to a Merchant bank.

There is a world of difference between retained earnings and cash and so while all the accounting indices may be pointing to a healthy company, the guys are cash strapped.

That one about significant dividends to help people buy rights, i think its wishful thinking.

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.

OBAGADAFFI:
My problem with AIICO is proposed fundraising.

AIICO truly does not need the additional capital from the proposed rights issue. The latest unaudited fs for end of 2019 shows that they have the required N18 billion paid up capital as defined. However, most of those capital is in the life business. AIICO has a need to increase the capital for it's general insurance business to enable them to carry the risks of their generated non life business which they have been forced to re-insure over the years because of low capital. I speculate that is the need for the rights issue. I also speculate that they will help shareholders out to find the rights issue by doing a significant dividends this year. In effect, they are re-allocating capital from the life business to the non-life business and for those that re-invest the dividends in the rights issue, it will be like receiving bonus shares, save for the withholding tax.

Dupeodus:
This is false reporting. What is contained in the egm resolution is an increase in the authorized share capital. Not an increase in the issued share capital itself that will raise funds. I know aiico's management is playing with it's minority shareholders. They did an egm about a year ago where they got an approval to increase both the authorized and issued share capital to raise N5 billion. I do not know the current status of that. In the last agm, they also got an approval to enter into a technical agreement with an entity that does not even have a web presence. Now they are asking for another approval to enter an agreement with an unnamed entity. When I first started to look at aiico critically around 2017, I suspected that something was off in their treatment of certain foreign assets that they have. I did not have the time to do a thorough analysis. About a month ago, I had the time to trace the movements on the foreign assets on their financials from 2014 to 2018. I was convinced that in 2017, over $7 million of the assets were sold and converted to naira at a rate that is a significant discount to the prevailing exchange rate causing them to write off about N500 million in foreign exchange reserve. This is outright theft. I still do not have time yet to petition the SEC with this. This time, there will also be a petition to efcc.

I take the first sentence on this post back. I missed the first item on the notice of the egm that requested for the approval of the investment of leapfrog. It is another way by which aiico treats it's existing shareholders with contempt and I wonder about the people that go to these meetings and approve rubbish like this. The request did not say the level of investment of the investors, how many shares were issued and at what price. Maybe this will follow the terms approved in the last egm done about a year ago. I wonder who leapfrog is.

chillykelly86:
OGG, from the text you quoted, Agba's numbers are correct. If they got approval to increase the authorized share capital to #18b, it technically means they can issue up to 36b units of shares at a nominal value of 50k.
So, if they increased authorized share capital from 10b to 18b, they simply created room to be able to issue an additional 16b units.

Abeg, help us factor the new numbers into your calculations make we know whether na forward we dey go abi na dismiss.

Edit: https://nairametrics.com/2019/09/12/aiico-insurance-to-increase-share-capital-by-80/

Excerpts from the link: In a statement that outlines the EGM’s agenda, the company made known that “the share capital will be raised by the creation of 16 billion ordinary shares of 50 kobo each, ranking pari passu in all respects with the existing ordinary shares of the Company, and the capital clause of the Memorandum and Articles of Association of the Company, will be altered accordingly.”

One possibility people are not considering is that aiico might want to increase the authorized share capital to be able to issue bonus shares. Aiico is on course to have excess of N18 billion as capital by year end which meets the new capital requirement of NAICOM. Unless the company sees significantly expanded business opportunity ahead, the company does not need additional capital.

onegentleguy:
But the warnings he(dupedous) gave, though implying caution, was also a positive driven one.
'cause if u recall, the Oga also repeatedly said he was busy accumulating the stock irrespective of the inherent worries therein.

...his reason?

He believed and knew that though there might have been manipulations in the books of the coy, he sees a huge potential with VALUE accretion therein !! ...and so will continue to accumulate more, come what may !!

Like that Oga(dupedous), our interest in AIICO is purely value driven.
Rake-off all likely risk, and what u'll still get is a coy that's underpriced.
I think he understood that with AIICO, inherent VALUE drive relative to price(mkt) far outweighs its associated risk.
I once mentioned that the stock is one of the asset with the highest UPR(upside potential ratio) in the 'NSE room' !!

That said, I agree that the company have not been honest with its shareholders.
But then again, we are simply following the money.
...let's see where it leads us to.

You are correct. I am still accummulating despite everything that I have seen. Relative to their current price, history, performance and potential, aiico is an unbelievably cheap company. Their shenanigans will end at some point. I went through the same cycle with NEM.

Mpeace:
The scam called Aiico
They want to add 16billion more units.

If you entered this stock...
https://nairametrics.com/2019/09/12/aiico-insurance-to-increase-share-capital-by-80/

This is false reporting. What is contained in the egm resolution is an increase in the authorized share capital. Not an increase in the issued share capital itself that will raise funds. I know aiico's management is playing with it's minority shareholders. They did an egm about a year ago where they got an approval to increase both the authorized and issued share capital to raise N5 billion. I do not know the current status of that. In the last agm, they also got an approval to enter into a technical agreement with an entity that does not even have a web presence. Now they are asking for another approval to enter an agreement with an unnamed entity. When I first started to look at aiico critically around 2017, I suspected that something was off in their treatment of certain foreign assets that they have. I did not have the time to do a thorough analysis. About a month ago, I had the time to trace the movements on the foreign assets on their financials from 2014 to 2018. I was convinced that in 2017, over $7 million of the assets were sold and converted to naira at a rate that is a significant discount to the prevailing exchange rate causing them to write off about N500 million in foreign exchange reserve. This is outright theft. I still do not have time yet to petition the SEC with this. This time, there will also be a petition to efcc.

OBAGADAFFI:
Wow Dupe,

You got lots of info on AIICO.

Have you written to SEC concerning this matter?

Can you inbox me at Modupe@Comcast.net. I have a question.

OakPearl:
My candid advise to you bro is to channel your hard earned resources in proven profitable companies with much more responsible management that will give you excellent returns.
Corporate governance is treated with kids gloves and the SEC we have has proven there is no protection for the ordinary shareholder.
Oando is sufficient case study.
Run bro, run!

Thanks for your advice. It is the conventional wisdom. However, if you decide to play in the Nigerian market at all, you are faced with these issues all over with the possible exception of Guaranty Trust. AIICO is in the insurance sector which is fairly simpler to decipher, especially the life business. You don't have insight into the asset quality of banks and the conglomerates could also have problems with inventories or receivables. In effect, you have to pick your poison or you chose not to play in the Nigerian market at all as a lot of people I know have decided. I chose where I think the downside will not kill me if it crystalizes while there is potentially considerable upside. AIICO is my second concentration in that cycle. I did the same with NEM knowing all their issues with infidelity and it worked out well.

Bomboclad:
AIICO is doing fantastically well.....52% increase QOQ

AIICO is a highly profitable company whose management is playing games with the minority shareholders. I strongly believe that there is a game going on with the intent of stealing a significant portion of the company to the majority shareholders at no cost to them. They got the shareholders to approve a Rights issue about a year ago at an EGM. They have not effected the rights issue. They really do not need the capital but it is part of the grand scheme to steal a significant portion of the company. At the last AGM, they got shareholders who never look at things critically to approve a technical agreement with an unknown company with no web presence. Think about that. A company that has been operating successfully for more than 70 years seeking technical support from an unknown company with no web presence.

On this latest H1 report, look at the "Other Investment Contract Liabilities" line on note 19(b). It increased by N1.3 billion in 2018. So far this year, it has increased by N1.5 billion. Both of these increases were by a charge to the profit and loss account. What is this liability that AIICO continues to increase by reducing their profit? How does it fit into their business. My guess is that this is where the management are housing the funds to use for the rights issue so they will not have to pay anything themselves. I am hoping they read this post so they will be forced to explain this line.

I have investment in AIICO. It's actually a major part of my Nigerian portfolio. This is because I believe that at some point, all of these shenanigans will stop and the company will find its true values. At the present time though, I am grateful for an opportunity to continue to acumulate this company at a tissue paper price level.

ACAN:
NGSE Bear-run Leaves Blue-chips Trading Below 52-Week High, Amidst Low Liquidity


Market Update for the week ended May 10 and Outlook for May 13-17
Equity markets across the globe witnessed a bearish trend as the trade dispute between China and U.S escalated during the week, following the seeming breakdown in the discussion, following which new taxes were imposed on Chinese products early Friday. This was despite the scheduled meeting between both nations this week.

The Nigerian Stock Exchange (NSE) bled throughout last week due to selling pressure, continuing three consecutive weeks of decline which is gradually pushing the market into a two-year low on negative sentiments and weak market fundamentals.
Not even the just concluded 2019Q1 earnings season, or the full-year before it, made an impact on the indicators, given that the numbers were mixed, and even beclouded by anxieties that followed the general elections, beginning with that of the President and National Assembly on February 23, 2019. Investors and traders were also not swayed by mid-Thursday’s news of the news of reappointment of Godwin Emefiele as Governor of the Central Bank of Nigeria (CBN) for another five-year term, the first since 1982, by President Muhammadu Buhari (READ MORE).
It is however not impossible that investors were still digesting the announcement of Emefiele’s reappointment, vis-à-vis other economic indices.
Besides the weak market fundamentals that have negatively impacted the NSE’s composite index, there are factors such as low investor confidence, poor liquidity and the corporate earnings that came below market expectation. The market, therefore, needs a spike in form of positive news, amidst the market’s prevailing low Price/Earnings Ratio, which discerning investors and traders should take advantage of, especially blue-chip stocks which have suffered significant decline.

Also, the Federal Government had pledged to partner the NSE in the privatization of some public enterprises, which is expected to result in more companies becoming listed and in the process offering investors more options, in addition to contributing to the Ease of Doing Business (READ MORE).
The market is also anxiously awaiting the listing of MTN Nigeria shares by introduction on the NSE, which will further broaden the market and give investors more choices (READ MORE).
Meanwhile, the nation’s key economic indicators remain positive, with inflation rate dropping to 11.25%; just as the Monetary Policy Rate (MPR) was cut to 13.5%, while external reserves as at May 8, stood at $44.843bn. Also noteworthy is oil price selling above $70 per barrel, as at Thursday, just as the National Bureau of Statistics (NBS) is billed to publish the April consumer price index and Q1 GDP numbers May 20.

Movement Of NSEASI
Last week, the NSE’s benchmark All-Share index recorded an unimpressive outing, closing negative in all of the five trading sessions, losing 1.25%, after the previous week’s 1.78% decline. The loss brought year-to-date loss to 8.22%, which reveals the presence of juicier opportunities in the market, looking at it 52 weeks high and low.
Insurance stocks dominated the advancers table, despite the announcement of late filing by stocks in the sector and price adjustment for dividends proposed by their directors. Also, sell pressure continued in highly capitalized equities and blue-chip stocks, due to weak Q1 numbers.
The momentum behind the week’s performance was weak, as shown by the money flow index at 23.83 basis points, compared to 23.77bps in the previous week. This is indicating that funds are leaving the market, just as the sell position stood at 74% and buy volume, 26% on a transaction volume index of 0.94.

NSEASI Weekly Time Frame
The NSE Index action continues to pullback for the week, on a high traded volume and breakdown of this last Fibonacci retracement level that’s support will lead to lower lows, also reversal at this triple bottom formation is high depending on market forces. But looking at the negative sentiments that had dominated the market as MoneyFlow index is looking down. And, at the same time, NSEASI is trading below its 20-Day Moving Average and MACD is bearish. But the index touched the lower Bollinger bands signals ‘buy’ as reversal remains imminent.

Bearish Sectoral Indices
All the sectors suffered heavy losses with the NSE Oil/Gas shedding 5.3%, followed by banking with 2.8%; and Insurance, Industrial and Consumer goods closed 1.7%, 0.4% and 0.2% lower respectively. This reflected the selloffs irrespective of the positive news and expectations of fiscal stimulus. Market breadth was negative with decliners outnumbering advancers in the ratio of 49:19, to extend the down market.
Turnover for the period stood at 1.47bn shares worth ₦10.58bn in 17,603 deals, in contrast to a total of 1.47bn shares valued at ₦15.49 billion that exchanged hands last week in 18,090 deals.

Beta Glass and Courtville were the best-performing stocks for the week, topping the advancers’ chart with 23.1% and 13.6% gains respectively, closing at N68.95 and N0.25 per share on low price attraction and market forces respectively. On the other hand, Goldlink Insurance and Japaul Oil lost 36.1% and 33.3% respectively, closing at N0.23 and N0.26, on market forces and profit-taking after the recent rally.
During the week also, the prices of Caverton, Prestige Assurance, Aiico Insurance, and Consolidated Hallmark insurance were adjusted for a dividend of 25kobo, 3 kobo, 6 kobo, and 2kobo respectively, as proposed by their directors.
Given that the NSE is trading at its two-year low indicates that many equities on the NSE are undervalued, offering investors juicy entry opportunities to discerning investors.

Market Outlook
We expect the mixed performance to continue this week, despite CBN governor’s reappointment and expected key economic data, as market players maintain a cautious outlook due to low confidence and liquidity, waiting for major economic triggers. Hence, we advise investors to trade cautiously in the short-term, with their gaze fixed on blue-chip stocks that are selling more than 40% below their 52 weeks high. As we look out for a positive catalyst to drive market recovery.

That notwithstanding, we would not overlook the possibility of a bargain-hunting motive supporting positive performance, especially with many fundamentally sound stocks remaining underpriced. With the prices of major blue chips continuing to drop in recent weeks, we expect speculative trading to shape the market’s direction this week, despite the seeming negative outlook.
The sustained volatility will continue as investors and fund managers rebalance their portfolios, with eyes fixed on the political space and post-election market dynamics. Investors should review their positions in line with their investment goals, the strength of company numbers and act as events unfold in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value and allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals.

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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
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Tel: 08028164085, 08032055467
https://investdata.com.ng/2019/05/ngse-bear-run-leaves-blue-chips-trading-below-52-week-high-amidst-low-liquidity/

AIICO Management or should I say the main shareholder continues to device means to fleece minority shareholders. I got an email notice on Friday, May 17 2019 for an Annual General Meeting that is to hold on Monday, May 20 2019. One of the Special Business to be held in the meeting is for shareholders to ratify a Technical Assistance Agreement between AIICO and a company called 'Oakwood Synergy Hub Limited'. The basis of the fee for this Technical Assistance service is not stated. This company does not even have a web presence. Think about it, a company that does not have a web presence is to give technical assistance to another that has been in existence and doing business for 49 years - since 1970. I am watching. Busy at this point but at the appropriate time, I will be taking this case to the SEC and the House Committee that supervises SEC. At least, they will have many people to bribe before they are to effect their fleecing scheme.

Godlylifeoneart:
OGG
MY PARTNER IN PROGRESS, I NO KNOW SAY YOU DEY VEX LIKE DZ OOO
ABEG... PARDON THEM
THEY KNEW NOT WHAT THEY WERE SAYING
KEEP DOING THE GOOD JOB AND IGNORE PETULANT INVESTORS WHO NEVER LEARNT THE ACT OF INVESTING.
YOU ARE AN INTELLECTUAL AND A GIFTED ANALYST
KEEP IT UP
YOU ARE HIGHLY APPRECIATED BY MANY.

We are all humans and prone to anger when unjustifiably provoked. The attack on him was totally uncalled for. No one is forcing any stock down the throat of any other on this board.

austinkenneth:
Please let's not insult. OGG is not forcing anything down anyone's throat

Due Diligence is advised in Caverton. The Whales who are selling know why they are doing so. They may have some information you do not have and situations like this when there is a high liquidity is when they offload huge volumes.

I can tell you for sure that in the oil industry where Caverton serves, there is massive cost reduction initiative going on. The drive is coming from the IOCs and the NNPC. NNPC has seen that the easiest way for the country to get more from oil is to slash costs heavily.

In line with this drive one of the mandates is that:
(1) all contracts that can be reviewed and revised downwards should be reviewed and revised downwards and given to the lowest bidder.
(2) More persons should move from field locations to office as automation takes root--> Less Chopper flights,less money spent on feeding, more savings etc. The oil industry is far behind in automation.
(3) Pay and staff cuts where necessary

When you hear that the govt will be tougher this time, it is not a joke ooo. It has started already. Contractors for oil companies that provide services in Nigeria at ridiculously high profit margins are targeted in phase 1. This includes big coys like SLB, Halliburton, Baker etc. Caverton might not be an exception.

In the Helicopter and vessels space, major revisions will be done industry wide this year. Contracts discussions and awards will be more transparent, revisions will be made, massive discounts requested. There are fears that Caverton's increasing monopoly will be broken.

Let's not forget that whatever Caverton's gain has been Bristow's loss and Bristow might bring ridiculously low prices to the table to recapture a business they've been into for > 40 yrs.

Thank you for valuable industry info.

austinkenneth:
AIICO management is still going ahead with the proposed private placement which will rob retail shareholders.

the management is simply asking the shareholders sign away a portion of their assets to other people.

The Nigerian investor is at the mercy of company boards.

Some thing must be done about this. NEM wanted to do this but were stopped at the court by interested parties. Such a judgement could be easily applied in this case to stop AIICO from this special private placement.

AIICO learnt from the mistake of NEM. NEM infringed on the provisions of the Company law in not giving adequate notice of their Extra Ordinary General meeting to some key shareholders which formed the basis of their successful law suit. AIICO avoided this and the Extra Ordinary General meeting approving the private placement has been held. The only opportunity left is to point out to the regulatory bodies, the accounting irregularities that AIICO has been committing in order to suppress the market values of the company's shares and actually make provision for creating the additional stocks out of fictitious liabilities instead of paying for them. I have reported this to SEC but I am not sure anything is being done about it. The next level is to take the matter up with the appropriate oversight committee at the National Assembly. I am prepared to do this but waiting for the actual issuance of the shares. I am saying this hoping that AIICO has agents that read this board and they are aware that someone is ready to fight them. Another opportunity is the up coming annual general meeting but I cannot attend. Let me close by pointing out that another effort in suppressing the market value of the company by it's management is the miserly 6k dividend out of an eps of 44k. NEM paid 13k out of an EPS of 39k. I don't think any company on the NSE treats it's shareholders with as much contempt as AIICO treats it's shareholders.

One thing to note on aiico. The company has not executed the private placement for which they got approval for in the last egm. This would have diluted the holdings of retail shareholders. I still believe the company is still overstating it's liabilities to some extent. The managers are just letting the investors know about the real profitability of this company. It is either they have given up on the scheme to grab a higher proportion of the company for themselves or they are awaiting a more opportune time. I do believe that the delay between the board approval of the accounts and final release is related to this issue.