₦airaland Forum

pangolo:
Gurus et al,
My friend was telling me about FUTURES/COMMODITIES TRADING. I want to know if any of our esteemed gurus has had exposure to that and if they can explain it in layman's terms. I think it would be interesting,
Pumping777, Frankiriri, Wanajo, easimoni, Windywendy, Temmie 10, and others, Please contribute!!
Thanks

We don't trade futures in the NSE nor do we have a commodities market. Futures are a way to buy/sell commodities or financial instruments at a later date based on a contract you sign today. E.g Oil sells for $90+ today. If you are 100% sure it will be 200 this time next year, go sign a futures contract saying (for a fee of $1/barrel) you'll buy oil from me today but only wish to execute the purchase/take delivery in a year. If you are right about oil prices, you make $200-$90-$1 per barrel. If the price drops to $40, you must buy the amount of oil on the contract at $90. fortunes have been made and lost this way but it's leveraging at it's finest.

Read more about them on investopedia.

http://www.investopedia.com/terms/f/futures.asp
http://www.investopedia.com/terms/c/commodity.asp

@ Rob_roy,
re: Costain vs. Bank PHB.

There is no bigger money maker in the NSE than buying a company just returning to profitability. E.g. I Bought WAPCO at 18 last year, Wema at 4.30 this year. Costain looks like the next WAPCO and Transcorp could be the one after that. Costain for 08, Transcorp (& dunlop) for 2009.

@ pumping,
I see it but as you say, no data.

@ Rob_roy, you need to take a deep breath, do the math and bet on one or 2 horses and not all of them. Don't look back in regret at what could have been after you make your choice. Costain and Wema seem to have the most potential on your list but we have yet to see the prospectus on either (Wema will come out in weeks not months).

Per raising money to buy shares, I reinvest all the money I make. I started small and worked my 'folio slowly and dilligently. I don't borrow money ever. I've thought about it but could never pull the trigger. Maybe people who've done it successfully can chime in. _{I'm still contemplating it.}

husu:
Saw dangote floor on nigeriansecurities at 8.6,is it rael or fake?

I have their valuation page open in another window as we speak. NO mention of Dangote flour. Where on the site do you see it?

@ pumping,
Yes Zenith, Frank works there.

pumping777:
Well, you were very calm earlier this week for someone with so much exposure. You try.

You didn't read the part about my BP going up?  

Mr Cee,
I believe the consensus on this thread is that FCMB is a marginally better offer; at the PO prices, Fidelity is selling at a 20% premium to FCMB on a forward PE basis. + FCMB has shown us some interim results that indicates an ability to meet the (ambitious) forecast. Fidelity has shown us nothing and their forecast is even more ambitious.

FCMB wins!

yodiyokun:
Ilastly, on the issue of overdiversification, this is a relative term. Honestly, for me having 5 -7 companies is enough.

But I still believe in Long term investment sha. 2-4 years, you get the best returns. My investment in GTB in the last 5 years has multiplied well over 1000% , I still beat myself today that I did not investment more then I will be smiling to the bank.

5-7 is my optimum as well. I've seen portfolios with 20+ stocks and I never understood why.

I'm still working on my patience to become a long-termer. Thing is I see too many opportunities and tend to dump my 9-12 months stocks to HIT that opportunity. Paid off this year with Wema (was 80% of my 'folio) but with my BP trending up , I no go try am again o!

Temmie10:
@all

Wema is still a Buy for me!
I dun think TS is as fast approaching as has been trumpeted.
The loans that were written off are still recoverable.
Even a conservative estimate should place wema at 16 naira at full year.

Thanks for the IBTC attachment. They have Wema's fair value at N18, but once it crosses N13, I'm going to start selling.

husu:
What do u mean by that,is zenith coming to the market?.Meanwhile saw dangote flour at 9 naira, is it true.?

It's not true. Dangote FLour PO was for 15 and it's not yet listed. Did someone prophesy?

Zenith is under technical suspension and have announced plans for a hybrid offer. They will be in the market within weeks. Watch this space. _{Where's Frank when you need him?}

And Iwerebor is strangely silent

yodiyokun:
Seriously,

Is Wema cheap now at 11 naira, based on this Q1 result? and with the impending offer on the horizon?

It all dpends on the size of the offer. I hope they don't go for N100B. If you don't own it already, I'd say you missed the boat. There is still some risk associated with buying now.

Anybody notice Transcorp broke it's N4.00 support for 2 days in a row?

Also notice the 9 months for ins coys are coming out? Good stuff!

Yup it's confirmed! FSDH report is in. Wema's 1Q is below

WEMA BANK PLC
3 months, June 2007
Turnover 9,287.00 5,698.00 62.99%
PBT 3,358.00 2,097.00 60.13%
Tax 503.75 419.51 20.08%
PAT 2,854.00 1,678.00 70.08%

my2cents:
shamass,

I just visited your site. I must confess, "the site" is quite "impressive". I found "the piece" on your cgi-bin directory to be the best feature. Now tell me, which newspaper appears to be in, "serious crisis"? Which newspaper appears to engage in "moonlighting"?

LOL till tears came out of my eyes! Too much.

yodiyokun:
@easimoni,

Are you saying their shares will be oversubscribed again ? Honestly, with all these offers coming out at the same time can all of them be fully subscribed. Is the Nigerian Market that deep. Where on earth are people getting the humongous amount of money from.

IBTC estimates there is 700B in leveraged (big grammar for borrowed money) funds in the NSE. As longs as banks are extending loans to people buying POs, the market will remain deep.

pumping777:
Zenith's Hybrid Offer

It means Zenith will be diluted by about 3.9 Billion shares.

This means the projected adjusted PE is around 22 with EPS of around 2 Naira based on current earnings.

Based on offer price we are looking at projected adjusted PE of 19 but of course I will expect a higher PAT with the injection of funds. I can't wait to see the prospectus to see the projections.

Zenith is attractive to me even on the floor.

No way Zenith won't be oversubscribed, act "surprised at the confidence placed in the Zenith brand by the investing public", and then "yield to the pressure to let more people join the ownership ranks" before absorbing, say, N300B. I should be writing press releases for these people. They are becoming too predictable. Don't believe the 3.9B shares for a second.

pumping777:
I beg from where you extract these Wema results?

Wema gained 5% today! And the poster meant the 1Q was 2.9B while the same period last year was 1.7B. Means the forward EPS is N1.14k. Still waiting for independent confirmation (other than today's 5%) . If it's true, cloud 9!

RoughCut:
Someone mentioned earlier on the other thread that Zenith bank is the master in managing the dynamics of share prices and investor expectations. Click http://www.proshareng.com/myproshare/portal_news.php?id=3122

The shares have been placed on technical suspension in anticipation of raising a total of N150B from the capital market via rights and public issues just a day after releasing impressive 1st quarter results(WEMA bank will need to learn a few lessons here from the master_{it's the dreaded WEMA again}

Nice one, Nice one! They caught me off-guard. Only N150B over 4B new shares? After the shareholders approved 5B new shares? 5 divided by 4 is 125%. They already made provision for the 25% oversubscription they are allowed to absorb without wahala. They are indeed the masters!

@Sweet_aura,
I've heard this gist before in different flavours. From the same brokers who had "BUY" recommendations on Wema just weeks ago?

And why shouldn't they buy their own shares. If everyone one is losing thier cool and selling, why shouldn't they buy up only to sell when they have good news.

Naija is full of urban legends. Everybody "knows" what's going on only after it happens.

RoughCut:
Investing in places like Canada, US,UK(apart from properties) etc is not worth the effort(those markets don't need us) if you want to include overseas stocks in your portfolio you are better off investing in funds that have the bulk of their holdings in emerging markets like Brazil, Mexico,Vietnam even closer to home Angola, Ghana, S/Africa.China and India are over-heating and a bubble waiting to burst so i wont touch them with a barge pole

Well said. No to mentioned the tax on capital gains most western countries will charge you.

wanaj0:
Well, if you are a technical trader, Zenith may be attractive to you.

That wouldn't be because of the 8.6B 1Q PAT no shaking graciously shared with us?  . It's very impressive. Shows they are on their way to N30B at FY. But let's not forget that they are setting us up for the N250B offer and 5B new shares will push the forward EPS to just under N2.

drtonyo:
HIP, HIP, HIP, HURRAY!!!!!!!
WEMA BANK bounced back today.
It was on bid and sold for #10.04 briefly.
Gurus in the house , what's next.? should we still sell our shares or hold on till the half year results are out?

I'm tired of this NSE. One day Wema is on offer (80M units yesterday) and the next it's on bid? The sold N1.8B in shares today. Someone want's us to dump so they can buy. They must know something we don't.

@ dollarmani,
AIICO is an enigma to me. I've seen them list addtional shares a few times in the last 3 years that I'm not sure what the true number of oustanding shares is. Also, the PAT seems to bounce up and down, no discernable trend. Makes me nervous about projecting. I'm already holding one unpredictable security (take a wild guess), I'm only buying ones with consistent trends for a while.

I know you must be tired of Wema by now but this punch article may interest you.

I'm not selling.

tonyjon:
DOLLARMANI,
Do you think its advisable for anyone to buy into the insurance sector now?.
I have interest in the following companies:
1.Mbenefit 2.Crusader 3. Law Union and Rock 4. AIICO 5.Cornerstone 6. Niger Ins. and 7. Unic.
What do you have to say as regards the performance of these coys and based on their EPS AND PE, is there any hope that one could make returns from these?.
Peace.

The 1st 3 on your list are the 1st 3 on my list.   Those 3 all have forward PEs below 16. not bad at all.

pumping777:
@Yodiyokun - Thank you for the response.

If investments are based only on trailing PE one will not do very well in any market.

The abiity to see a company that will move from trailing PE of 40 to 10 is the wisdom in investing.

I take it you have seen the potential in Wema has been delayed and not denied (to paraphrase the preachers  ). I've cancelled my sell order. Even though I'm over-exposed to Wema bank, March is only 5 months away. Let's see what they do from now. After all, I sold AP after the measly YE results. Doubled since,

@ yodiyokun,
you have spoken wisely!

@ SGN,
I think you present a solid analysis of the situation. I'm going to try to sell this week and buy it back in a couple of weeks if the bleeding continues. If you take away the provisions for bad loans/goodwill?, the PAT should have been close to N8.9B (~90k EPS) and if they grow profits and don't have anymore goodwill/bad loans to write-off, an EPS of N1.20 within the next 12 months is not unrealistic.

I'm seriously resisting the urge to be trigger-happy on this one.

10.2B shares

krisbobo:
@All Gurus

please is Crusader still good to enter at 4.29k? Will appreciate info asap as I want to place order.

thanks

P.S if crusader is no longer attractive please what stock in that price range will be profitable on the long term. This na long term o as i don learn, especially with small money, say short term na wahala! Lol

It's v good at that price. Planning to buy some myself.

pumping777:
Likewise insurance companies,

Wema dropped a bomb, It is better to wait for the price to drop, I'd like to see the detailed results though, To see if writing off bad loans or goodwill had a major impact, whatever the case, the market will not be kind to the stock for now, I've still got some, but of course I won't hold on to it.

I've laready issued my sell order for tomorrow. I hope they sell it. I plan to buy back if I see that bad loans/goodwill played a major role in this disaster or if the interim results put them back on track. This stock could be at 8 bucks within a week.