₦airaland Forum

People keep asking “how can faster settlement be bad?” Let me explain.

When a foreign fund wants to buy NGX stocks, they don’t have naira sitting somewhere. They wire dollars, their custodian converts to naira through CBN FX window, THEN they buy shares.

Under T+2, they had 2 days to sort that FX conversion. Manageable.

Under T+1, they have to fund the trade same day. Our FX market cannot deliver large naira amounts same-day consistently. So what happens? They have to convert dollars to naira BEFORE any trade is even placed and just leave it sitting there on standby.

That is called prefunding. And that is the problem.

Why would any serious fund hold naira? Every day you sit in naira waiting to deploy, you are bleeding in dollar terms. Before you buy a single share, you are already losing.

FTSE Russell issued a notice yesterday because of this putting Nigeria’s Frontier Market reclassification on HOLD. We were supposed to get that status in September 2026, which would have triggered automatic buying from global index funds. That money is now on hold.

We copied T+1 from USA and India without copying the part that makes it work for them — a deep FX market where you can source local currency instantly.

We put the cart before the horse. We need to fix the naira liquidity problem first.

mikeapollo:
A pre-funded market is much better as it helps reduce liquidity risk in the market, which helps to boost market confidence.
The FTSE Russell review should lead to an improvement in the classification of NGX, unless they are up to something else.

NO! Capital NO! A pre-funded market is very BAD.
A requirement to prefund equity trades is deemed a negative for the Settlement Cycle (DvP) criterion.

For those who don’t know DvP means Delivery versus Payment — the global standard where cash and shares move simultaneously at settlement. No advance funding needed. Nigeria just broke that standard for foreign investors.

If we don’t solve this we would NEVER get on FTSE Russell

Yoursfaithful:
The rate at which Ngx dey jump sef nawa

This isn’t good. Didn’t the ngx consider this before implementing T+1

ogawisdom:
Half year result will end all these

You get the point…

Interim dividend as they start coming in next will change the tone of the market

HesInMe:
Lol. Were you born yesterday?

Lol - that was a satire

We are in the “last to sell na Mumu” territory!

Everyone is selling!

There is real actual fear in the market, especially as fundamental stocks like MTN, WAPCO are dumping.

Retail investors who just joined the market in the last 1 year are literally running as they see their money burn. HNI and institution are reallocating their portfolio.

My advise if you haven’t sold, it might be too late but then maybe we can go another 20% down and u would be a grateful u sold now.

NGX is raining blood, take shelter!

awesomeJ:
If you ran the numbers, the PP isn't significantly responsible for the market crash.

First the PP positions need funding in USD.

Alhaji mentioned people already put up, USD2bn, meaning that they probably had that liquiduty on hand.


Now the numbers:
Market has done 20 Sessions with c. 40bn per session. That's less than 800bn total or USD 500m ish.



So, even if everyone who sold never put a dime back in the market, the entire procceds for the whole month is nowhere near the liquidity required for the PP.

The PP had some impact, true but Let's put it on the right scale.

Abi Davido for instance needed to sell shares to fund his own??

I agree with you.

One correction tho -There is a Naira-denominated portion of the PP. There are banks in Nigeria currently receiving NAIRA from people (institution) that got the offer.

Also to restate your position the selling pressure effect doesn’t need to match the full $2bn. Even marginal institutional selling in a thin NGX market moves prices sharply remember the NGX is not a deep market

So lemme tell you guys what is going on in the short term.

Dangote private placement issued it’s allotment offer letter last week.

Those who got the offer last week have till this week to pay otherwise they lose it.

They are selling the most liquid stock to raise cash to take up their offer.

isaacosas01:
I couldn’t believe my order at #300 was triggered.

I think the NGX is broken! A YOLO order i set for WAPCO at #286 was just triggered

Ginalex:
Wapco below 300. Who would have thought ... I don add some more

I couldn’t believe my order at #300 was triggered.

deathwing:
Bruh, nobody cares about the stock market as a metric. There are only like 1m active traders, most of them onboarded in the last year. It's not so important a statistic since it doesn't actually mean anything. People can't buy bread on the road, people can't pay Band A light, people can't travel from Lagos to Oyo without doing night-vigil beforehand. Nobody us going to vote Tinubu because some people in Lagos made 100% on MTN.

Gbam!!!

KarlTom:
Time to restock UBA...

I was suprised nobody was talking about UBA. Below 40 naira is too good a price to ignore.

Why does the NGX gate price formation on volume? Why can’t we run like the NYSE and LSE where any genuine trade updates the last price immediately?

Agbalowomeri:
He has spoiled the market for them. They won't have a choice than to sell IPO close to that price

You guys sha. PP is private not secret. You really think institutional investors won’t know the price of PP of DR. PP are not advertised because it’s against SEC regulations not because its a secret.

Rubyjade:
Why do you say so?

Look at its financial. You would find your answers there.

yMcy56:
You can make use of the Public Offer opportunity @3.20
Closing on 11th June, 2026

Lol - Egungun be careful na express you dey go

Streetinvestor2:
Go back and see all information he ever shared here before it became public. He even said he will be participating in the PP
Dey play.

Make the guy dey play!

Y’all do not have an idea of the people on this thread. The other day i dropped internal info on when TIP will be allocated and someone was asking me how i knew and i didn’t respond.

People here are participating in the DR PP and are in possession of the financials. Na you nor get am, nobi say he nor dey.

purity2all:
This International Energy Insurance movement reminds me of Sunu Assurance last year.

Sunu kept on moving till about 17 before stopping. Maybe IEI looked into Sunu's playbook.

The more IEI moves the more people should avoid it. You can see the desperation to manipulate the floor price so people can purchase their PO.
If they like they should pump it to 30naira their PO will still fail.

nosa2:
Do you have any numbers on the profitability of the refinery?

There are numbers but they can’t be shared because of NDA.

In a matter of Months when IPO is ready the numbers will be available to the public

GeneralDae:
Refineries of this scale around the world are actually worth that amount and even slightly more now.

Give me one example. Just 1 example of refineries around the world of this scale with this ridiculous valuation.

pluto09:
I have not seen the prospectus to know exactly what the worth of the company is.
I am just speaking hypothetically about IPO generally and the antecedent of the man at the center of the whole issue.
What we have for now is a 700,000b/d and the valuation should reflect that.
The valuation will definitely not be the same when the production doubles.
This is the time for him to get some benefits for his labour so he is free to price the company as much as he wishes.

With these valuations only Dangote himself and Private placement (institutional investor) will make money.

Agbalowomeri:
So the 700,000 barrel per day company was constructed with about $20B. Where is the fund for the expansion to 1.4m barrel per day coming from if we all want the company to retain the valuation of $20B?

There are some basics finance principle everyone in finance knows bro.
That a refinery was built for $20B doesn’t give it valuation above $20B, its doesn’t work like that.

In finance we say replacement cost ≠ market value. A refinery is worth what its cash flows justify, not what it cost to build.

GeneralDae:
$39.1 Billion is reasonable given the fact that they are expanding

This is exactly my problem. Why are they pricing expansion that has not happen into its valuation?

If you now add that Nigeria is still a frontier market that should discount it by 30%

Laolballs:
Have someone checked out mtn stocks latetly , any thoughts on it neartime price

https://ngxmarketcap.com/stocks/MTNN

MTN will trade over #1,000 this year

Shalom428:
Thanks bro for passing the sweet whisper. Potential IPO investors can now use this as a guide. Its now easy to tell if the IPO price is super inflated or reasonable.

Bro this private placement valuation is inflated. When i was hearing valuation of $40B i thought it was a joke. So they are really going to value it at $40b.

This is a circular valuation — you’re paying a future price to fund the future you’re paying for.

$39.1B is a 2028 - 2030 valuation when the refinery is doing 1.4 million bpb, not a 2026 one.
The valuation of the refinery today is $18B to $25B.

You can do the math yourself using the largest refinery in the world - Jamnagar. Dangote is currently priced higher than it at $39.1B which makes no sense.

Lastly for retail investor this is clearly not a growth stock. It’s already priced in future growth.

Returns come from buying below intrinsic value, not from buying a great asset.
Dangote Refinery is a great asset. But a great asset at the wrong price is a bad investment.

Sunrisepebble:
Dangote refinery
$0.35 per share in the private placement

Wow! Except this is locked for atleast 1 year, i won’t be participating in the IPO.

jckgroup1:
Are you sure? One investor was promoting the PO as the next TIP, with the sentiment of huge discount to market price

Lol - next TIP with their balance sheet.
TIP is doing well because of its very good financials, it has recorded over 200% growth.

IEI balance sheet is beyond horrible. They are declining and getting worst like a cancer.
IEI is loss making and their Q1 shows even more losses.
It’s better u set ur money on fire than invest their PO.
IEI book value is less than 50kobo… imagine paying 3.2 naira for loss making company with less than 50kobo book value.

Rubyjade:
jingles on radio, TV and Internet.

The PO will fail

faoogoke:
The same IEI that recorded massive loss for 2025 financial year.
I wonder what and who is pumping the price?

They are pumping the price to trap anyone who doesn’t do research and invest in the PO.
I wouldn’t touch IEI with a long pole.

I hope no one falls for INTENEGINS here oo.
If u buy their PO without looking at their terrible financials, anything ur eye see u collect.

lostinHeaven:
Tinubu is the worst president in the history of Nigeria,there is no oita of dout about it.

It’s audible to deaf and visible to the blind. Even the dead speak of you.
Tinubu is a monumental failure and any one who thinks he would win is joking, unless nobi humans wan vote