₦airaland Forum

Some good results have been released so far but market reaction has been largely indifferent. My suspicion is that we will see renewed albeit delayed positive market reaction from mid next week. The market hates uncertainties.

Disclaimer - Please treat as mere speculation.

Reactions to results released so far have been interesting.

For those that have been condemning Aradel's result, can you please do a comparison to that of Seplat and share your findings? Best practice is always a like-for-like or industry comparison.

Aradel is currently outperforming Seplat in my opinion and it's still very much cheaper too.

Please note that I didn't consider the potential impact of Seplat's acquisition of Mobil assets in my assessment.

Disclaimer - This could well be one of the many occasions I overlooked critical factors. Please do your own research.
Disclaimer -

Omooloriredade:
CI Leasing - The market is not expecting a good Q3 result? Q1 & Q2 looks good to me.

Disclaimer - Not a recommendation to buy or sell.

https://doclib.ngxgroup.com/Financial_NewsDocs/42466_C_AND_I_LEASING_PLC.-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

90k EPS. Good improvement QoQ and YoY. Huge turnaround in the Nigerian business (parent company). Market might be sleeping on this one.

megawealth01:
Many people here have written UNITY BANK off severally and I don't even want to reply because na my stock be UNITY BANK but Mr Time will do the needful soon and all I will be doing then is what I do while Oando surprised a lot of people even those that claim they bought it and advised others to do same while we all know the truth... I laugh in french. We all know that I always call Oando a gamble. You can also redefine what I call things anyway you want it...

UNITY BANK is proudly my bank so if you una no get mind to lose money just stay away from UNITY

As for international breweries I bought it as an ANAMBRA project just like I did for CUTIX, Fidelity etc and don't mind going down with them. We go drag ourselves tire until the management (IB) decide to either waka comot or continue being in the NGX...

Note

I'm heavy on both just that na UNITY BANK be my main bet.

Thanks to GOD this market doesn't follow emotions or people's hatred of what works and mints raw and fast cash . Time go tell las las

My brother this message isn't for you ooooooo

I know there are times investors have emotional attachment or see a stock as "their" stock. Truth is I feel bad when I have an opinion that is not flattering of the stock. The good thing is, my opinion is just an opinion. It changes nothing in the grand scheme of things. What will be, will be. I didn't suggest you can't make money from them o. I wish you the best with your Anambra project and Unity o.

If I was always right, I'll be the world's richest man

Over and Out! Enough for today.

mikeapollo:
I d
You are making the same mistake like some people who condemned and wrote off Oando based on some TA or FA within some specific periods in the past.
IB did a PO at a price of 60kobo and the share price got to as high as about N45--N50 before falling to the current N4.50.
If IB should go back to N45, that would be 1000% of he current price.
Oando has gotten this high because of future expectations and not necessarily linked to its current RI.
Using May-Sep 2024 as basis period for your anslysis is disingenuous because some of us had been In Oando since 2021/22 while some people bought in 2024 just before the rally started. So the timing of purchase is a key factor here.

Unity Bank is currently N1.50 and being restructured by CBN. It can go lower below N1.00 and also has the potential to sell at N5 and higher after the merger with Providus Bank.

"Doing an Oando" for me may be different to"doing an Oando" to you. It does not mean it must be 900-1000% gain.

NB
I don't have a single unit of IB and UB currently but will mobilize to buy if they stay at current prices when I get some considerable cash

Just to be clear, the Oando move only happened during the period I stated so what happened in 2021 is immaterial in defining an Oando-like SP appreciation in this context otherwise there would be many other stocks that fall in same category or have produced even far superior returns. You would agree with me that there are many stocks that were kobo kobo in 2021 that have produced returns far in excess of what Oando has delivered. How much was Transcorp in 2021? UCAP nko? Now, you see there is nothing special about the Oando return any longer? The shortness of the duration is what makes it special. A lot of companies have produced incredible returns over a year or more. Now, identifying that stock, taking position before the event is what we are talking about. Except you don't mind taking position 3 to 5yrs before the rerate happens. Not a bad thing by the way. A lot do that here.

When some people make projections, they just pluck a figure out of the air. Not you o. I know many people that can't wrap their mind around billions or trillions. They go - there were a lot of people at the rally, billions. Huh? How na? Wetin be world population again? It number of people they saw was just overwhelming for them. I put it to you that IB at 40k and with the number of shares it had at the time and the structure, size, capacity and players in the brewery market then is different to what we have to day.

Actually, you can't just look at random SPs from the past in isolation without considering other factors. Heavy consolidation and restructuring happened. Like I explained previously, SP change after a consolidation is not SP appreciation. E.g Transcorp will commence trading at N40 when suspension is lifted, then someone comes to tell us how SP went from N1 to N40. See gain?
Please see attached file to understand. The previous public offer before this was in 1999 so I want to believe you were not referring to that one. 2007 PO was at N0.87k. Even then my point still stands.

Now another point you need to understand is that a company can not be valued at such outrageous multiples of it's annual revenue and earnings except in exceptional cases (market & earnings potential support it). N8T puts it in the category of Dangote Cement with annual revenue in trillions of Naira (over N2T in 2023). IB's annual revenue is a pitiably small amount of less than N300B not earnings o (paltry amount since you see it trading at Dangote cement market cap na). Bros, it doesn't work that way for such a company.

What is the combined industry revenue? They (Guinness, NB, IB, Champion et al) struggled to reach the N1.5T mark in 2023. The total addressable market never reach wetin go make IB an N8T MCAP stock anytime in the foreseeable future.

@Mike I lumped other matters not related specifically to you that has always been on my mind so don't take my post personal. I just don't understand why and how people deal with numbers sometimes. Ah! Oando is going to N2000, Transcorp is going to N500. How did you arrrive at that conclusion? Number sounds cool?

mikeapollo:
Watch out for International Breweries and Unity Bamk. Those are the stocks that can do "an Oando" when they rebound after their restructuring/turnaround but I don't know when. So only those who have the capacity to invest and wait would enjoy the loot.
IB can do 500%-1000% easily
after their restructuring

Please o. For those that perceive my post anyway other than what it is- just a humble personal opinion, make una no vex o. Countering a position or an idea is not to be perceived as an attack on your person. I welcome counter opinions to my post.

So here goes:

First of all let's define what it means to do an Oando in terms of SP appreciation.
Oando's closing price on the 2nd of May 2024 was N9.00 and it went on to reach N95.5 on 10th September 2024.
That was a 961% rise over a period of 4 months and a bit. A c.540% appreciation for the period July to September.

In my humble opinion, neither Unity bank nor International Breweries can do that. If they were to give that kind of Oando-like yield as described above, a 2008-like event will be required in which case it wouldn't matter if it was the aforementioned stocks or not. It would be a "Point-and-Kill" situation. Roll the dial and pick the stock where it lands. Even Omooloriredade-OIL (that newly registered with CAC and is still looking for office space) will deliver 1000% SP appreciation on the NGX.

Secondly, let's look at the restructuring you are refering to in both stocks:

Unity Bank - In its history has never been in the top 5 banks in Nigeria. They have hit ground zero (actually 6 feet under) and are being revived in ICU by the CBN. The restructuring is meant to recapitalise the bank and essentially save it from going under. One other thing to consider about banks is that there is hierarchy which is determined by market share, profitability and quality of management (among others). Unity is at the very bottom in each of these yardsticks. An Oando-like SP appreciation is virtually impossible except in the scenerio mentioned above in which case, it becomes a moot point.
Now Unity bank last traded at N1.50. Without a share consolidation, you are suggesting the bank will trade at N15 in few months because of a restructuring? Would it be from capturing a staggering market share or experiencing astronomical earnings growth?? If shares are consolidated and it trades at N15, I hope you understand that is not an appreciation For now, I'm pretending the scale will be tipped in favour of legacy Unity bank shareholders post merger with Providus bank. <Yinmu!!>

Internation Breweries - Historically, going back 5yrs, the highest the stock traded was N9.50. It is currently trading at N4.33, has experienced dilution and has just concluded a Rights Issue (6 for every share held previously). The raise is meant to recapitalise the company so they can stem the tide of loses they have been suffering in recent years, deleverage the company and put them in a position to favourably/profitably COMPETE with their peers in the industry. The brewery market is a stiff competition between Guinness, NB, IB, Champion et al. There is little margin for poor marketing, operational inefficiency, inadequate or poor diversity in consumer products and poor distribution channels. Get anyone of these wrong and you find yourself on the back foot struggling to protect your margins.

Before the RI, IB had #26.9B (50k) shares issued and fully paid. They converted them to 2k nominal shares just before the RI (I'm a bit surprised the SP wasn't adjusted on the exchange tbh but I guess it's because the RI was priced at N3.65 for 2k shares anyway). Let's use SP of N4.33, MCAP was N116B before the Rights issue. RI was #161B extra (2k) shares at N3.65 raising cool N588B which is set to turn around the fortunes of the company but at unprecedented destruction of the share capital structure. They now have #188B shares of 2k each issued and fully paid. Point to note though, shares are 2k denominated not 50k so at some stage, a mega consolidation may be required. Back to my MCAP calculation, post RI, IB has an MCAP of N814B.
Without a share consolidation, you are suggesting IB can trade at N43 (N8.1T MCAP)? How? Also, if they consolidate say 2k to 50k nominal shares like most stocks on the NGX, OS reduces to #7.5B while SP moves from N4.33 to N108.25. I hope you understand that is not an SP appreciation

Hey! I am not suggesting money can't be made from investing in both stocks but an Oando-like SP appreciation in the foreseeable future is wishful thinking.

Key ingredients for an Oando-like type SP appreciation. The list is not exhaustive but here are a few I can think of:

* Sector with untapped opportunities
* Favourable government policies
* Imbalance of market demand and available supply
* Established Industry margins
* Huge disparity in peer comparisons
* First mover advantage in a promising sector
* Unprecedented discovery of an opportunity or resource or technology.
* Historical considerations of trading and market share if company has been in the doldrums for a long period and the market opportunity still exists.

Disclaimer - Humble opinion only and not to be taken as financial advice. I have been wrong many times in the past so however we place our bets, I can only hope our dreams come true.

The post long sha. Chai!

Hey! This is just a personal opinion. Not an attack on anyone and NOT a statement of fact so in the future, please don't mention how "someone" was attacking you o. If it's still okay to express one's thoughts, then consider this post as my musings.

Unity
Based on the news released some months ago, the CBN is looking to recapitalise Unity bank by merging it with Providus bank. Currently, Unity bank is on technical suspension from the NGX. For them to do this, I assume they will need to place the shares on suspension anyway while the merger is ongoing?
Is it fair to say that there is no point in lifting the suspension on Unity bank now if they were already at an advanced stage in the merger process? I reckon this is the logical thing they would do so they won't be in a hurry to have Unity trading again on the exchange again.

Access
Access bank will struggle for a while because of the acquisitions spree they have embarked on. It takes a few years before the benefits start to manifest. If the past is anything to rely on, we are looking at two years or more before the bottom line starts to reflect the benefits of the acquisitions. What to expect in the near term which is what we are already witnessing:

* Increase in Revenue (top line)
* Increase in expenses (better put, higher than normal expenses)
* Tempered earnings and dividend growth
* Subpar SP appreciation relative to peers

The bank will have to make increased provision for impairments. Some of the banks being acquired operate on a different banking platform so integration issues are to be expected along with expensive platform upgrades. Branch, equipment and staff rationalisation will bloat expenses even though they will end up creating a more efficient bank. Same applies to other companies being acquired by the bank.

Eventually, the dividends of the acquisition spree will arrive but holders may have to be patient.

Disclaimer - I could be sincerely wrong so this is not a recommendation to buy or sell.

GeeKudi:
There is even a e-didvend mandate form online that he can fill and it is automatically sent to all the registrars in his stock holdings and for any subsequent stock he acquires. I can't lay my hand on it now but it's only a google search away.

https://sec.gov.ng/non-mandated/

That's right but some people might need guidance with these things. I would imagine that if they already hold the same stock through another broker and they have have used the same clearing house number (CHN), then it should be automatic. However, if it is not, then sorting it out directly with the Registrar is the way to go.

designking:
Stocks bought through Bamboo App doesn't seem to receive dividends.

I am yet to receive any dividend from the stocks I bought through Bamboo App.

otokx:
You may need to fill stock transfer form and forward through your stockbrokers to the respective registrars.

Pretty sure he doesn't need to fill a stock transfer form or involve his broker IF all he is after is electronic payment of dividends.

The E-dividend form is what you need to fill out.

Contact the registrars of the affected stocks on your Bamboo app OR preferably download the E-dividend forms from registrars' websites, fill and forward them to the respective registrars.

Tpharell:
Let’s understand that the Agip acquisition does not bring in additional production figures, as Oando was already there in the asset before the acquisition and taking over the operatorship.

Oando, Agip & NNPCL were in the JV and reported production was for the asset comprising all 3 of them. So Oando taking up Agip’s 20% stake does not add anything to the JV production.

What is happening is that Oando the new operator is making strategic decisions and operational interventions to boost the production

I agree with the bolded but Agip's 20% share of JV production is now Oando's. One can expect that Q3 2024 (not FYE 2023) reported figures to double the 20kboepd reported as at FYE 2023?

I didn't quite get your explanation of the Seplat vs Oando acquisition impact on production numbers.

ProphetUtuocha:
Food for thought:
Between the hastily formed 'Renaissance group' and the legendary Oando, which company is more qualified to manage the SPDC's assets?

https://www.reuters.com/markets/deals/nigeria-rejects-shells-13-billion-oil-asset-sale-thisday-reports-2024-10-16/

Watch out as things unfold!

Oh no!!!

I thought of this too and concluded it will bring bad press for O&O and BAT. Social media platforms, blogs, news outlets will be agog with corruption talk and how Renaissance group was shafted to favour O&O. They had better tread carefully.

Disclaimer - Most likely a baseless rumour or at least in my own case, a figment of my untamed imagination.

pluto09:
I think something is not right with that q2 in my opinion.
The profit is only good for the company but very poor with the group .
Since its the group that is listed,the results might not be good as some people thought.

Err!!! Not quite!

The company is C & I Leasing Nigeria being the flagship company in the group. The group includes Lease Africa Ghana and others. The result is perfectly normal. Same way the results of banks in a holdco structure determines the overall outlook of the group's result. It just means the subsidiaries are not contributing as much to the top and bottom line YET.

CI Leasing - The market is not expecting a good Q3 result? Q1 & Q2 looks good to me.

Disclaimer - Not a recommendation to buy or sell.

.

Streetinvestor2:
Any particular reasons for this statement

Google difference between Exchange and OTC. NASD is an OTC.

Summarily, requirements for listing and to stay compliant are less stringent on the OTC and it's cheaper to maintain too.

Streetinvestor2:
I like what I am seeing with the DUFIL company based on products by osita link.II never new they are behind many of this middle class needs.Abeg watin be thr on OS.

I could not see it on the downloads. Thr products are necessities for many homes.walahi all this time I thought they only produce Indomie

Generally:
Confirm the nominal value of shares (usually 50k). If 50k, multiplying share capital by 2 gives you the OS. Some companies have nominal shares of N1. Aradel was N10 before the split (now 50k).

Dufil
If you can't be bothered doing that exercise, scroll to the 12th page (ix). It's clearly stated there for the computation of the EPS.

If it's still too much wahala, OS is #6,753,333,334 as at 2021 FYE.

yMcy56:
All these results have been released up to 2023.
Think AGM just ratified it, like just formal closeup or so.

You're right! I know I went through some results recently but I had to google them. I couldn't find them on the NGX.

So @Mike Oando go carry that title for a while o.

emmanuelewumi:
It can be as high as 30% for short term capital gains.

If you turned N1 million to N10 million in less than a year, that should be a profit of 900% and a gain of N9 million the capital gain tax might be more than 10%.


My opinion though

Ideally, NGX "school fees" becomes less of a worry too as you will have to deduct that from your gains to determine your net gain for the year. There will be a limit to how far back we can go i.e prior years that can be considered.

Disclaimer - Implementation may be completely different to my postulations.

https://doclib.ngxgroup.com/Financial_NewsDocs/Deap_Capital_Management_and_Trust_Plc_-_AGM_Resolution.pdf

DeapCapital

N2.5B being money owed to Non-bank creditors was converted to shares at N1.69 which explains the SP run from N1 recently.

Management now seeking to further recapitalise the business. They will also be releasing their 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023 on the NGX following approval by members. So Oando is not bad afterall

Disclaimer - Not a recommendation to buy or sell.

[quote author=GeeKudi post=132381538][/quote]That exemption was removed in 2022?

GeeKudi:
I receive email every year to declare my income and pat tax on taxable incomes earned in my second home. I said taxable income because not all incomes are taxable. As far as Nigeria is concerned, capital gains on the nse is not taxable.

https://www.firs.gov.ng/individual-income-tax

https://old.firs.gov.ng/wp-content/uploads/2022/04/Finance-Act-2021-Gazetted.pdf

https://oakelegal.com/tax-implications-of-disposal-of-shares-in-nigeria/

Please refer to the above links. However, BAT's aim is to bring our tax regime in line with global standards. He won't be enforcing tax laws as is.

Disclaimer - All personal opinion on where I think BAT is headed.

GeeKudi:
NOT TRUE

Actually, because a lot of Nigerians have taxes remitted to the government from their salaries, they are not too familiar with their tax obligations.

The govt also can't be bothered chasing individuals for their fair share of taxes of income because of lack of sufficient data. The new bill will be addressing this loophole. You cash out from an investment, the NGX, CSCS, banks etc will share data amongst themselves and disclose this to the tax office. At the end of the financial year, the tax office will expect you to declare your ALL your income AND Capital gains and they will apply the correct tax rate.

ositadima1:
Please, be informed, you are required to pay a 10% tax to the FIRS on all capital gains, including those from the sale of property or stocks. Even the sale of your old car join.

You see the loophole?

ositadima1:
I don't need to disclose my personal information to substantiate a factual discussion. I can simply provide evidence that the 10% FIRS tax has been in place for a long time.

As for the VAT on commission, it's deducted directly from my account. I'm not familiar with how your broker handles it, though.

Fair enough! However, 10% FIRS law is not sufficient evidence to disprove the fact that Nigerians have been getting away with paying their fair share of taxes on capital gains in the stock market which among others is what BAT is seeking to address. It's been a long time coming.

This is the reason for the reform. It won't be 10% flat rate and the new regime will ensure no one can escape it.

https://assets.kpmg.com/content/dam/kpmg/ng/pdf/clarifications-on-the-provisions-of-capital-gains-tax-act.pdf

GeeKudi:
Is it not common knowledge that we don't pay tax of stock sale and purchase? But, only on dividend?

It is but that is about to change if the bill passes which I expect it will.

BAT is trying to introduce tax reforms like he did in Lagos. Since he came into power, how many bank charges (taxes) have been muted so far already?

ositadima1:
Is VAT on commission not a tax? Capital gains realized from selling stocks are subject to a flat 10% tax paid to the FIRS. So, have you been remitting the 10% capital gains tax to the FIRS? Please don't tell me you are a criminal.

Your mantra here is "facts only". You mind showing me the 10% tax from your capital gains you have been paying to the FIRS? If you can't seem to find proof, I'll understand.

VAT on commission is not tax paid by the investor but by your broker. Your broker is paying the govt tax on the commission he received from your trade.

ositadima1:
What happens when you lose money? In other countries, you can get tax deductions. Does that apply here? The taxes I pay now don't seem to consider whether I sold at a loss.

Maybe you glossed over my post. I did mention your losses will be considered in determining your capital gains and applicable tax for the year. Losses (even from prior years) will have to be offset with current gains to derive your net gain and applicable tax for the year.

Bro, you have not been paying your commensurate tax from trading on the NGX. No one has except foreign investors who have to declare their foreign capital gains to their home tax office. We Nigerians have had it good for so long (hmm...not really ) when you consider we are our own government and service companies. We provide our own basic amenities - generator for power, bore hole for water, maiguard for security, house help for care of old and young, welfare etc.

ositadima1:
You weren't paying taxes before? For every share of stock I buy or sell, I pay tax on it. Even dividends are subject to a roughly 10% tax. It seems like you've been enjoying tax-free benefits alone all along. Which broker do you use?

Hopefully you understood my post.

Now, you mind showing me the fair share of taxes of your capital gains have been paying all along? You don't have to show the value the categories will do.

Sample below:

The next news Chams releases must be a good one otherwise ........

There's a seller that needs to be taken care of (or sorted) and a liquidity event is needed to achieve this. It could also be the MM running the show.

essentialone:
A new bill has been proposed in Nigeria that will require individuals engaged in banking, insurance, stock-broking, or other financial services to provide a Tax Identification Number as a precondition for opening a new account or operating an existing one.

According to the bill, titled “A Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States, and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters”, this legislation aims to enhance tax compliance and improve the country’s revenue collection process.

The bill, obtained from the National Assembly and dated October 4, 2024, stated, “A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall make the provision of a tax ID, a precondition for opening a new account or operating an existing account.”

This requirement is part of broader efforts to ensure that all individuals and entities participating in financial activities are properly registered for tax purposes.

The bill also outlines that any non-resident person supplying taxable goods or services to any individual in Nigeria or deriving income from the country must register for tax purposes and obtain a Tax ID.

However, non-resident individuals who derive only passive income from investments in Nigeria will not be required to register, although they must provide relevant information as prescribed by the relevant tax authority.

The proposed legislation also empowers the relevant tax authority to automatically register and issue a Tax ID to individuals who should apply for one but fail to do so.

In such cases, the tax authority is required to promptly notify the individual of their registration and the issuance of the tax ID.

Failure to comply with these requirements may result in administrative penalties. According to the bill, a taxable person who fails to register for tax will incur a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.

This was one of the first changes I expected BAT to introduce based on his record as Gov of Lagos state. Trading on the NGX was such a delight because of this loophole.

If the bill passes, it brings Nigeria in line with most western countries in terms of ensuring individuals are paying taxes commensurate with their income.

In my opinion, the direct implication for NSEMPA members is that you will be paying taxes for your capital gains (when you sell a stock) and dividend income (the 10% WHT will be taken into consideration). I believe this is the direction BAT is going. Your profit from the sale of any asset (stocks in NSEMPA's case) will be taxed at a rate based on your "tax bracket" determined by your income level for that year, in line with most western countries. Your total dividend income for the year, capital gains from asset sales, salaries/wages, business income and losses will all be considered in calculating your fair share of taxes.

Of course, I agree corruption will have to be dealt with seriously now. You can't tax NSEMPA 30% of profit from sale of Oando Presco loot only for politicians to embezzle it.

A new tax regime is coming for sure. I have been expecting it. Banking your entire loot may no longer be possible. Keen to see how they will be implementing this change.

Btw, my focus was NGX because this is NSEMPA but crypto, forex et al are included.

Disclaimer - This is just my opinion. I may be wrong in parts or in whole.

akpumpy:
After payment...

Dividend amount is deducted from the SP on the "Closure date" which usually preceeds the payment date.

Off market trade in Tantalizer. Just an FYI.