₦airaland Forum

Temmie10: Thanks for the reply on LASACO! You are definitely doing a good job here.

Temmie10, Frankiriri, Easimoni, Windywendy et al: Do you still think LASACO is a good buy, which it previously was? The price is still dropping and I'm wondering whether there's some info I missed but which everyone else knows.

Please your input is kindly appreciated.

Frankiriri and Easimoni: Thanks for your helpful contributions and replies.

Easimoni: Do you think there's any possibility that this GDR thing will turn out positive in the near future? I've got a small amount (700k) tied up in, unlike you big boys. I really don't know how to approach this GDR element.

Any help welcome.

Frankiriri: I bought into GTB b'because it was undervalued, I didn't factor in this GDR thing and the price just seems to keep dropping! I don't have a clue how this all plays out. Does anyone?

Do you know if its still a good investment?

Your help is highly appreciated.

@ Easimoni - I like the fact that you think outside the box. I quite agree with your take.

This is a MUST read for everyone:

, Regrettably, the reality on ground in Nigeria does not exactly tally with the above sanctimonious pontifications. The real life experiences that exude from any interface with Nigeria's post consolidation banks is to say the least, less than laudatory and still way below the mark of acceptable global banking standards. It is appalling, indeed lamentably appalling that three years after the consolidation gong was sounded in the Nigerian banking sector and with a preponderance of branches, endless queues and needless suffocation in the banking halls are still common sights in Nigeria's major banks. A recent experience of a crowd that far exceeded the capacity of the hall of one of Nigeria's top banks and the attendant risk of losing consciousness in the milieu, confirmed to me in the very clearest terms, the possibility of an early return to the culture of bringing sleeping mats to the banking halls for transactions.

The usual facile mantras readily mouthed by bank officials are "our systems are down", "there is network failure", "the ATMs are faulty", or worst still, "our UPS is down as a result of prolonged power failure". In an age where technology-enhanced bank halls across the world have become synonymous with serenity and swiftness coupled with highly effective automated teller machines facilitating the creation of a cashless society, Nigeria's mega banks still wallow in the cesspit of inexplicable network failure which automatically leads to congested bank halls and decrepit and docile ATMs. In most banks where insignias of ATM 24/7 are boldly inscribed, the machines have become defective monuments, swallowing cards without vomiting cash while at the same time deducting the amount requested. One of Nigeria's big banks has an intimidating register of trapped cards written in three voluminous notebooks all in a single branch! A top-flight banker with one of Nigeria's big banks recently confided in me that Nigerian banks are yet to fully come to terms with the requisite sophistication for efficient ATM services and as a result, he personally avoids the use of ATM while in the country.

Nigeria: Of Local Banks And Their Phoney World-Class Status

http://allafrica.com/stories/200707090072.html

, Yes I did, because in spite of Okereke-Onyuike’s rosy outlook, the Nigerian stock market is bound to bottom out in the months ahead because the fundamentals just do not add up. First and foremost, a capital market cannot be isolated from the environment in which it operates. The market, according to Financial Derivatives Company, an investment and economic and financial advisory firm based in Lagos, was by June ending trading at 43.67 times earnings, which when factored against real or nominal GDP forecasts for the year of some 6 per cent, does not justify the stock market rally. Second, dividend yields on actively traded sectors like banking are on average falling because their earnings relative to share capital are weak. In fact, with dividends yields in the market falling to an estimated 3 per cent (as against bond yields of 14 per cent), this should make a stock market plunge inevitable as investors will begin to look for more attractive avenues in which they can invest their funds.

http://odili.net/news/source/2007/jul/9/209.html

This is the response of CEO Taiye Ayedun to Windywendy's post. This was posted on NVS: http://www.nigeriavillagesquare.com/board/money-talk/38349-banks-float-nigeria-s-first-credit-bureau-2.html

Dear Villagers:

My name is Taiwo Ayedun and I am the founder of CreditRegistry Corporation (incorporated in the State of Washington in December 2001) and also the founder of CR Services Limited in Nigeria (incorporated in January 2003).

I was invited by Big-K to address some questions about our company’s prospects in Nigeria given our recent private placement to raise money to enable us increase operational capacity to serve our customers.

I founded CreditRegistry because I am fascinated by the easy access to consumer credit in the US, which enables me (and millions of other US resident families) to enjoy a quality lifestyle. It also turns out that consumer credit stimulates economic expansion and wealth creation – consumer and mortgage credit spending account for over 67% of US GDP and are key drivers of US economic growth (http://www.ftc.gov/bcp/workshops/inf, nts/cate02.pdf).

CreditRegistry is very keen to help to replicate the US economic model in Nigeria. Weak protection for lenders, weak law enforcement skills and resources, lack of reliable identification and prospects of identity theft and fraud, all collaborate to limit access to consumer credit in Nigeria. Reliable credit information can help to address some of these problems. However, traditional credit bureau solutions will fail in Nigeria, as identity theft is increasing even in developed markets with better law enforcement resources (http://www.msnbc.msn.com/id/5800052/). This is why we created CreditRegistry, Nigeria’s first private credit bureau, and the world’s first credit bureau service with integrated biometrics. We believe that reliable consumer identification, along with other key services, will help to stimulate consumer lending in Nigeria. For those resident in Nigeria there is already evidence that banks are keen to lend to consumers – they just need some help with managing risk…

With regard to the post by Lymbic3 from Windywendy please let me address certain issues that were raised. Windywendy/Lymbic3's comments are in bold and my responses are indented.

What is unclear however is whether or not [biometrics] is a sustainable competitive advantage.

There is no direct plan by CreditRegistry to utilize biometrics as a “sustainable” advantage although we wouldn’t mind if that happens. Instead, our use of biometrics is to solve real and present problems that could prevent wide availability of consumer credit for ordinary Nigerians. This would give us an initial competitive advantage and enable us to reach critical mass much more quickly.

Their projections seem unrealistic. So far they claim to have information on about 500k individuals and corporates (sic) in their database and yet they're projecting to issue at least 900k credit reports among their 15 bank clients in the very near future.

On average each of these 15 banks has about 200 branches nation-wide. So 900,000 reports in FY09 (2 years away) is an average of about 1.15 loans per branch per day (assuming 5*52 working days in the year). This isn’t that far-fetched. But of course there are other sources of loans that we didn’t put in our projections…

I guess I'm not comfortable about the fact that they've made no mention of how they intend to populate the data base with enough info that banks will actually find useful and want to use.

We solved the process of credit data upload since data upload first began with three Nigerian banks in December 2003. There was a hiatus during the bank recapitalization period and now that banks are sorting out their IT/software issues as a result of disparate systems from the different merged banks the process of data upload has resumed. Unfortunately we did not think that it was necessary to provide all the technical details in the prospectus.

The whole connection between CR Services Nigeria and their USA counterpart and technical partner is just a smoke screen. It's basically a one-man show, with the main shareholder of the Nigerian subsidiary also being the owner of the US parent.

It is not unusual for a key entrepreneur to be the dominant or visible personality in a young organization. However, this does not mean that there are no other important people behind the scenes. The CreditRegistry team is comprised of individuals with several decades of management and technology leadership experience gained at the world's leading corporations, including Microsoft, Intel, HP, Deutsche Bank, Citibank, Natwest Markets, and the US Overseas Private Investment Corporation (OPIC).

Out of about 52 million shares that would be outstanding following our recent private placement I would directly own less than 1.5 million shares or 3% – that can hardly be called “main shareholder”. However, the US company (which has several shareholders, including myself) will own about 20% of the company; my indirect ownership in this case would be over 10% of the Nigerian company. In total this still leaves about 85% of the Nigerian company in the hands of other investors. Nonetheless, I don’t consider it a crime if I owned a much larger share of either company.

Moreover, the US parent has been in operation for sometime here and I couldn't find anything spectacular about the company's products or services.

The US Company does not provide services in the US market – only technology development takes place in the US. The US Company’s first market of operation is in Nigeria, which had been slow to take off since we were entering a market without a prior culture of sharing credit information. Believe me, it’s been quite a difficult task. But thanks to a variety of factors, not least of which was the CBN-initiated banking recapitalization, Nigerian banks are exploring ways to increase shareholder ROI and this means that they cannot ignore the consumer market.

Also, the so-called parent company takes a % of the turnover of the Nigerian subsidiary, takes a % of profits and in addition charges technical services fees! That's not cool, especially since it's just a start up and one person owns both companies. Doesn't sound like good business sense to me.

Royalty, technical licensing, and technical management fees or a combination thereof are customary ways in which the owner of the credit bureau technology earns revenue. Experian, Trans Union, and Equifax all invariably do this when they license their credit bureau technologies for use in other markets. And this is one way for shareholders of CreditRegistry Corporation USA to earn ROI.

There are other competitors, like the one mentioned above, with deeper pockets. The story in the link posted by JoshO above is true. I'm aware that accenture, which is more global and more technologically savvy and has deeper pockets than CR services is involved in one of the credit bureaus. When I was in Nigeria in December, I also gathered that IFC was partnering with the same credit bureau that accenture is involved with. And just as the story states, the other banks mentioned are promoters

This is like saying that no one should dare compete with an established company with deeper pockets. Or that one shouldn't innovate or improve upon an existing technology for fear of the established players. If that were the case we wouldn’t have competition at all - there’d be no Google or Yahoo! or even Microsoft. And we wouldn't have any other credit bureaus besides the first credit bureau to be established.

The shares being offered are preferred shares and there's no mention of what will happen to holders of those shares in the event of a stock market listing. Will the shares be converted to ordinary shares? I"m not too keen on buying preference shares, especially when they're class B and are not convertible to ordinary shares, and most especially when the holder of the Class A preference shares is also the owner of the company! It's like the guy has just taken measures to protech (sic) himself in the event that things don't work out -- Class A preferred shares, share of turnover, share of profits and technical service fees. I'm not impressed with this structure at all.

The preceding analysis of our shareholding structure is inaccurate and this is unfortunate. It would have been better to contact IBTC (the issuing house) or me for further explanation if the writer had questions since our contact information were on the placement memorandum. It is misleading to post an analysis that is based on an incomplete understanding.

Having said that, a stock market listing of CR Services’ shares is, at best, a medium term possibility. Thus, new investors (having about 75%) will have ample opportunity to initiate amendments of the company’s articles at the time when a stock market listing is contemplated. Please note that the more important points are that (a) the conversion of preference shares under such circumstances IS NOT prohibited under the company’s Memorandum and Articles of Association; the silence of the document on the issue is understandably because a stock market listing is not immediately contemplated; and (b) new investors who will be holding Class B Preference Shares will have the same voting rights as the existing shareholders.

Class A (US investors) and Class B preference shares (new investors) are in the same class type except that US investors paid N18.70 and new investors are paying a discounted price of N16.50. In the case of dissolution shareholders of preference shares receive double their investment before ordinary shareholders are paid from the company’s liquidated assets; this is stated clearly in the placement memorandum.

And the owners of Class A Preference Shares are NOT the sole owner of the company – they are the founder of the Nigerian company but will retain about 20% of the Nigerian company after the private placement and co-own it with the new investors.

Based on the cashflow and balance sheet projections, it doesn't look like this company has plans to invest in fixed assets over the next 4 years. Infact, they plan to invest more in current assets (debtors and prepayments) than in fixed assets. This makes me wonder if they have plans to expand. I would think their business model would necessitate the need to continously update their architecture as technological advances are made and clients' demand increases, and that they would need to expand in order to service more clients across the nation. 4 years seems like a long time not to make any fixed asset investments.

CreditRegistry Corporation handles enhancements and technology inventions within the licensing agreement with the Nigerian company.

For faster response please email me at taiwoa@creditregistry.com if you have more questions.

If you’re still interested in investing please contact the following people in Nigeria:

IBTC Chartered Bank Plc
Oyinda Akinyemi
Tel: 01 2626520/2712400 Ext 1186
Email: Oyinda.Akinyemi@ibtc.com

Yewande Sadiku
Tel: 01 2626520/2712400 Ext 1127
Email: Yewande.Sadiku@ibtc.com

CR Services Limited
Taiwo Ayedun
Tel: 01 7769587/8184775
Email: taiwoa@creditregistry.com

Best regards!

Taiwo Ayedun

@ Jungle700 - Visit StockMarketNigeria. They have a thread titled Choosing/rating a stockbroker. There you will see someone's most recent experience. The individual has had a pretty bad experience with them.

Guse:
Seek the counsel of a lawyer.

I would eventually find my way to a lawyer, but I'm based in the UK. So until I visit home, I need suggestions on how to proceed, what options I have?

Everyone In The House:

My family receives proceeds from the family estate and my mum has asked for me to be involved on her behalf.

They intend to collectively invest the proceeds from the estate in shares. My question is how can they collectively invest on the NSE?

Whose name will be on the share certs and registered with the broker?

How do we guard against any one member being fraudulent?

How will dividends and eventually dividend cheques be cahsed? When such an occasion arises?

All suggestions welcome!

Easimoni: I throway salute o!

Gbengaijot

s it possible to use two stock brokers at a go?Huh. I am having a bit of problem with cashcraft, and i am getting tempted to try use another broker.

It isn't advisable to transfer your account to another broker. The reason being that Cashcraft will make sure that they do everything in their power to ensure that they make it virtually impossible to transfer elsewhere.

If you can, cease adding to your portfolio with Cashcraft, but try to muster the sign up funds for another broker. This way all you will need to do is wait until you need to sell the stock you have with them. Only as a last resort should you transfer your portfolio elsewhere.

I'm also with Cashcraft, and based on my experience with them I wouldn't wish them on my worst enemy if I had one.

BIGBOYLARY:

Am not saying he should used any of the mentioned stocker brokers i lay out or wheter cashcsah or cashcraft as they where know were okay or not. but no matter how you can discussed your problems with them and find solutions and just giving out list of stocks brokers we have, Am with IBTC you can give them a try if u like.

Just so that you know, If something is bad, its bad and no amount of fixing or patching up will amend things. I changed not only my account manager, but my branch, it has done me no good. Just like K2 says, the problem isn't always with the account managers but with Cashcraft as an organisation. They are simply no good. Pay a visit to other forums and you'll find enough reason not to advocate Cashcraft to anyone.

Cheexy: How bodi dey o! Hope everything is cool.

BIGBOYLARRY

1-BGL SECURITIES LIMITED
2-CASHCRAFT ASSET MANAGEMENT LIMITED
3-AFRINVEST WEST AFRICA
4-AMYN INVESTMENTS LIMITED
5-CAPITAL BANCORP LIMITED
6-FSDH SECURITIES LIMITED
7-IBTC ASSET MANAGEMENT LIMITED
8- ZENITH SECURITIES
9CENTER-POINT INVESTMENT LIMITED
10-UNION CAPITAL MARKETS LIMITED.

How could you possibly include Cashcash on your list? You obviously don't know much about them or have used their service.

The most recent fiasco relating to them is to do with the NASCON sale. They were allocated 2 million units and chose to keep every single unit to themselves! My account officer as well as that of others were not happy with this decision but there's nothing they can do.

Sometime in may Cashcraft was being investigated by the SEC. During this process they were shut out of the NSE and couldn't buy or sell. The story they told their clients was that stocks were scarce!

Buy/sell orders are problematic. Updating your account details are problematic! If you pay money in it takes weeks to show up on your account. The list goes on. All you need to do is find other Cashcraft clients willing to share their experience. Visit Stockmarketnigeria, there are too many dissatisfied clients of Cashcraft!

You need to have a better look at your crystal ball

@ Easi - How bodi dey. I've sent you some emails so please check you emails.

Thanks for being a sport

Easimoni - Thanks for making me laugh! I'm aching all over (lol)

Try my brokers, Lead Capital. Website is www.leadcapitalng.com

They require N1m and they allow online monitoring on a daily basis. But expect poor service (2+ days to execute an order) and ZERO analysis.

@ Cheexy - What's the minimum investment for Trustyields securities? I'm also in the market for a broker.

How do you rate their service?

Thanks in advance for your response.

What fundamentals? I'm interested. Can you please scan the balance sheet, P&L and Cashflow statement so that we can do an analysis and see if your broker is right? If he's right, then i'm in who no like beta thin If you can put it on the site that'll be good otherwise mail me at windywendy121@hotmail.

@ Windywendy - This is what I was told by my broker when I asked for the reasons she considered Wema a good buy. She's with Cashcraft. I personally haven't seen any financials.

@ Windywendy and Frank - I appreciate your candour. My broker presented it to me as a short term buy and sees it appreciating based on their fundamentals and financial report, so there you go.

@ Windywedy and Frank - What's your take on Wema bank in the short to medium term

@ Frank and all others - What's your take on Wema bank in the short to medium term? Quick responses highly appreciated. Thanks

Windywendy - Thanks for your positive sharing. It helps to know who the culprits are so as to avoid them.

Have you ever tried using variations of your name to buy stocks especially offers? If yes, how does it actually work. It was a suggestions from Frank sometime ago.

I totally agree with Nimshi on this. Why does everyone complain about their broker and yet also turn around to shield them? Exactly what is the sense in doing this?

Let us shame those that need to be shamed and hail that require same. By doing this we all help each other avoid similar pitfalls.

Stockbroking firms: It's not bad to mention the names of the companies messing with your investments; how do we really share experiences if we shield poor performers? If you're getting rotten treatment from a stockbroking firm, mention their name; the least we'll expect is for someone else on the board to defend them, if they've got good service from the same company, that is.

@ Cheexy and Sleek_Chic - You aren't alone. Visit this link: http://www.stockmarketnigeria.com/forums/showthread.php?t=204

This thread and some others discuss stockbrokers in general. I use cashcraft. They do have a good research team which is obvious from their website. But you'll have to make sure you spell out exactly what you want, and what your complaint is with your current provider to avoid reoccurrence.

Like the thread says, the time frame it takes to change over might be problematic.

One alternative might be to leave your stock with present broker, until you intend to dispose of them, whilst opening a new account elsewhere, which I considered doing myself.

Ask around it will help make your decision easier.

@ Cheexy and Sleek_Chic - You aren't alone. Visit this link: http://www.stockmarketnigeria.com/forums/showthread.php?t=204

This thread and some others discuss stockbrokers in general. I use cashcraft. They do have a good research team which is obvious from their website. But you'll have to make sure you spell out exactly what you want, and what your complaint is with your current provider to avoid reoccurrence.

Like the thread says, the time frame it takes to change over might be problematic.

One alternative might be to leave your stock with present broker, until you intend to dispose of them, whilst opening a new account elsewhere, which I considered doing myself.

Ask around it will help make your decision easier.

@ Frank - I'm interested in TA but access to data is problematic, is there any possibility of sharing your data, that is open/close, high/low and hourlies?

Someone suggested to a friend, that to do TA you need 3 years data at least, can you offer any assistance?

@ Frank - Thanks for your reply. I'm interested in TA but access to data is problematic, is there any possibility of sharing your data, that is open/close, high/low and hourlies?

@ everyone - Is there anyone in the house that uses technical analysis to choose stock? Especially the gurus in our midst, Mr Frank, Windywendy, cheexy and others.

On a different note, Windywendy raised a very valid issue:

Any takers on how the flour mills will do compared to Flour Mills of Nigeria (I'm referring to the one already quoted on the NSE)? It seems competition in that market is tougher than what obtains in Sugar. Also, Flour Mills of Nigeria has been at the business much longer and is more popular in the market (probably has a larger market share than most of the other flour mill operators). So how does any one foresee Dangote flour mills' s

Regardless of Dangote's midas touch how does he intend to out do Flour Mills? What is his game plan? How will he capture /command a good slice of the existing market? Will herd mentality push up his stock price/ Oversubscribe the IPO?

What do you all think?

@ Cheexy - Do you ever use technical analysis to choose stock or is it just fundamental or both?

@ Frankiriri - What do you think of stockmarketnigeria?

@ Everyone don't you think its time to revisit Transcorp? OBJ has carried out his selection and therefore Transcorp is here to stay. This being so, you can bet your last Naira that Transcorp is on the way up and will make its investors smile.

Here's my proof, which came after the selection:

Vanguard
Transcorp is a public company that no government can fold up
Franklin Ali
Tuesday, April 24, 2007

The Nigeria-Britain Association (NBA) said that it is leaving no stone unturned in its march towards making qualitative and positive impact on the national economy. This it carries out by providing platforms for institutions to interact with the larger society. In one of such forum Transnational Corporation of Nigeria Plc (Transcorp) recently highlighted its operations, vision, mission and goals as well as explaining grey areas in the corporation activities.

, This, according to Okoye, is to be achieved by substituting the country’s importation with local production by partnership with foreign producers to have production plants in Nigeria.

, Transcorp he disclosed will not only ensure steady and continuous appreciation of the naira against other international currencies but will make assist in checking poverty in the continent.

, Responding to a question on the political undertone of the corporation, that it is owned by President Olusegun Obasanjo, the GED noted that government’s involvement was just the provision of an enabling environment for the smooth taking off of the project.

, Responding to the question that a new government might kick out the corporation, he said the corporation is a public property listed on the floor of The Nigerian Stock Exchange whose shareholders also include institutional investors in Nigeria, South Africa, Europe and America, and that no government will do that as TransCorp is a transnational corporation with root in the private sector.

http://www.vanguardngr.com/articles/, 624042007.html

@ Dollyp1 - pls let me know if u do get some, may be I can get some thru ur broker.