₦airaland Forum

GeeKudi:
The other portfolio on CSCS was taken down few days before the outcome of the reconstruction was announced. I gave this nregistrar the details.

Raider76:
I think not only is NNPC (meaning the Federal Government) not interested in their 7.2% stake in the Dangote Refinery, but they are not interested in seeing the refinery itself survive. I think Alhaji better go and hire a crack team of international oil marketers to help him source global markets for his products so that he does not go bankrupt before 2027.

Mpeace:
lol. There are more responsible governments interested in the products. Like Ghana and Some of these neighbouring countries who have been buying from europe and smuggling products fron Nigeria, I only wonder why dangote keeps his focus on the Nigerian market. He should focus on export and see how Nigerians come beggening. Except if there is something we are not seeing.

KarlTom:
Actually, the deal with NNPCL involves a crude swap in Naira. This, I think, is what is attractive to Dangote.

@SpaceX might have a point except NNPCL would not relinquish their stake nor let go of the deal...

chimex38:
-->When you quote the 1st previous post, you copy the entire post. Then exit the page.

-->Then go ahead and quote the 2nd previous post.

--> paste the 1st previous post(that you copied) before or after the 2nd previous post you just quoted(depending on the order you want to place them)

--->then comment a fresh-post below the two quoted previous posts.


-------------------------------------
For 3 or more posts,
You could paste the 1st previous post somewhere.

OR
Most phones and computers thesedays have clipboards for storing multiple copied items temporarily.
you can copy as much previous post as you like and search them on your clipboard to paste accordingly in your fresh post.

OR
You could open two Nairaland tabs(previous post page and fresh post page ) on the computer or your phone and copy and paste desired content from one tab to the other tab.

Mpeace:
lol. There are more responsible governments interested in the products. Like Ghana and Some of these neighbouring countries who have been buying from europe and smuggling products fron Nigeria, I only wonder why dangote keeps his focus on the Nigerian market. He should focus on export and see how Nigerians come beggening. Except if there is something we are not seeing.

But something tells me Dangote only seeks to monopolise the sector.
He first fought the regulators and government.
Now he is after the marketers and competition. He says no one should be allowed to import so that he will be the dominant supplier.

KarlTom:
Sometimes it could be very frustrating.

Did I even mention that my ARADEL was lodged two days ago? That's right. Since I sent the first mail on 15 October...

Anyway, just keep sending mails (SEC, Registrar, Brokers).
Also make sure to request for your CSCS (this could show you the true standing)

Raider76:
On the bolded, all normal countries try to protect their home industries from competing with foreign manufacturers through restricting imports. These restrictions come in forms ranging from tariffs to outright bans of imports. You will recall how Trump used tariffs on Chinese goods. On the other hand countries help their industries' exports through actions ranging from subsidizing manufacturing costs, to make production cheaper so they can sell their products cheaper in foreign markets, to outright dumping of their products cheaply abroad.

So it is only in Nigeria that somehow this logic stands on its head. Government doesn't seem to care, at least in petrol refining, if local refining is sacrificed in favour of imports. It is absurd that importers are loudly beating their chests and shouting that they can import cheaper than buying from the local refinery. Of course they can. World trade is set up like that as explained above. Nigeria is a large market. So even if Dangote cuts his price and sells at a loss there will be foreign refiners who will match him just so they don't lose the Nigerian market. You will agree with me that there is no significant local refineries besides that of Dangote. So he can only be a monopoly against imports, which normal countries actually assist their industries to be.

On top of that it is increasingly clear that there may be a strong conflict of interest that allows imports to continue despite the fact that importing keeps pressure on the value of the Naira, and inflation higher, both of which the Government is supposedly trying to fight. All this is working against the interest of the country, endangering the jobs of the Nigerians in the Dangote refinery, all in favour of a few powerful importers, foreign industry and workers.

GeeKudi:
My question: In all of this squabble and its analysis, where does the masses come in?
We are not interested in their roforofo, we just want to buy fuel as cheap as possible.
Who will give us this? Is it what Dangote is fighting for?
The refinery was built largely from the vault of the CBN. Dangote is now denying all of that?
What is the essence of selling crude to him in naira if there is nothing in it for us - the Nigerian market?
We just want to buy fuel as cheap as possible.

MishdaFish:
I wish to clarify on the VFD 1:4 share bonus. Has any one gotten the additional shares issued? My account with my broken is still reading as before. Can any member advise on this. Thank you humble house.

MishdaFish:
I wish to clarify on the VFD 1:4 share bonus. Has any one gotten the additional shares issued? My account with my broken is still reading as before. Can any member advise on this. Thank you humble house.

BullBearMkt:
INVESTORS ABANDONING OKOMU RED OIL FOR OIL AND GAS STOCKS
Sellers are dumping OKOMU red oil stocks to capitalise on the ongoing rally in oil and gas stocks, thereby creating a potential buying opportunity for OKOMUOIL. The price is now nearing the demand zone, with a subtle support level ₦320 (circa).

PLAN YOUR TRADES AND TRADE YOUR PLANS

mikeapollo:
Is Oando now pulling Aradel along, or what?

GeeKudi:
Please, does anyone know what is going on with African Prudentials, the registrar for TRANSCORP? All the units of TRANSCORP I had before the reconstruction is missing. I keep sending messages without any satisfactory response

Raider76:
On the bolded, all normal countries try to protect their home industries from competing with foreign manufacturers through restricting imports. These restrictions come in forms ranging from tariffs to outright bans of imports. You will recall how Trump used tariffs on Chinese goods. On the other hand countries help their industries' exports through actions ranging from subsidizing manufacturing costs, to make production cheaper so they can sell their products cheaper in foreign markets, to outright dumping of their products cheaply abroad.

So it is only in Nigeria that somehow this logic stands on its head. Government doesn't seem to care, at least in petrol refining, if local refining is sacrificed in favour of imports. It is absurd that importers are loudly beating their chests and shouting that they can import cheaper than buying from the local refinery. Of course they can. World trade is set up like that as explained above. Nigeria is a large market. So even if Dangote cuts his price and sells at a loss there will be foreign refiners who will match him just so they don't lose the Nigerian market. You will agree with me that there is no significant local refineries besides that of Dangote. So he can only be a monopoly against imports, which normal countries actually assist their industries to be.

On top of that it is increasingly clear that there may be a strong conflict of interest that allows imports to continue despite the fact that importing keeps pressure on the value of the Naira, and inflation higher, both of which the Government is supposedly trying to fight. All this is working against the interest of the country, endangering the jobs of the Nigerians in the Dangote refinery, all in favour of a few powerful importers, foreign industry and workers.

Agbalowomeri:
Technically, Dangote Refinery is not a local industry. It operates within the free trade zone and products from there could be considered as importation too.

What are the implications of total deregulation? Isn't it to allow all-comers in the market, whether importer or local? And the government is meant to hands-off totally? Why is Dangote chasing after government protection when the refinery is operating in a free-trade zone and not liable to pay some or any taxes to the government?

KarlTom:
Dangote has a deal with the government (via NNPCL) so he can [and should] chase them.
Also, most of what Dangote is clamoring for, is supported by the PIA.

Like @Raider said "all normal countries try to protect their home industries..."

Comparing the Financial Metrics of UBA and FBNH

In evaluating UBA and FBN Holdings, it’s crucial to assess the financial health of these institutions, especially as we near end of Q4 2024 in view of Q3 performance. UBA, currently trading at N35, and FBN Holdings, trading at N25. Examining their latest performance figures, prospects for future growth, and the macroeconomic context to determine which stock offers a more compelling investment opportunity.

1. Financial Performance and Valuation:

UBA at (N35), with a strong presence in several African countries. The bank’s performance in Q3 2024 showed resilience despite a challenging macroeconomic environment. Key performance highlights include:

Revenue Growth: UBA has reported a consistent year-on-year (YoY) growth in revenue, largely driven by its strong corporate banking, retail banking, and digital banking segments. The diversification of its operations across Africa has shielded it from regional instabilities, giving it a strong growth trajectory.

Profitability: UBA has seen an increase in net profit, which reflects solid cost management, prudent lending practices, and enhanced interest income. The bank’s return on equity (ROE) has improved to around 18% in Q3 2024, signaling healthy profitability. In comparison to its competitors, this figure places UBA in a strong position.

Price-to-Earnings (P/E) Ratio: At N35 per share, UBA’s P/E ratio is relatively high, hovering around 7.5-8.5x. While this indicates a premium price, it’s supported by robust earnings growth and an attractive dividend yield. The bank’s valuation suggests investors are pricing in future growth, especially with its regional diversification.

FBN Holdings at (N25), its performance has been slightly more volatile, but it’s still considered a major player due to its large asset base and extensive retail network. Let’s break down its financials:

Revenue and Profitability: In Q3 2024, FBN Holdings reported modest growth in revenue, primarily driven by a robust performance in its commercial banking and investment banking segments. However, profit growth has been somewhat slower compared to UBA, with the bank facing challenges from regulatory pressures, non-performing loans (NPLs), and the high-interest-rate environment. Net profit growth has been sluggish, with a marked drop in the ROE, which stands at approximately 12-14%—a noticeable lag behind UBA.

Price-to-Earnings (P/E) Ratio: At N25 per share, FBN Holdings trades at a lower P/E ratio of about 5.5-6x, which suggests that the stock is undervalued relative to UBA. This might make FBN Holdings more attractive to value-focused investors seeking lower entry points, but it could also signal market concerns over its future earnings growth potential.

2. Key Metrics and Balance Sheet Health:

UBA
Non-Performing Loan (NPL) Ratio: is well within industry norms, hovering at about 4%, which indicates that the bank has effectively managed credit risk, especially in a high-inflation environment where loan defaults are more likely.

Capital Adequacy Ratio (CAR): UBA maintains a strong CAR of about 16-18%, comfortably above the regulatory minimum. This positions the bank to absorb shocks and continue expanding its loan book while maintaining a solid capital buffer.

FBN Holdings
Non-Performing Loan (NPL) Ratio has faced some challenges in managing NPLs, with its ratio currently pegged at 5.5-6%. While it’s not overly alarming, a higher NPL ratio can negatively impact profitability due to higher provisions for bad loans. This is an area to monitor closely, especially if economic conditions worsen.

Capital Adequacy Ratio (CAR): FBN Holdings also has a solid CAR, but at around 15%, it is slightly lower than UBA’s, though still above the regulatory threshold. This suggests that the bank is well-capitalised but may have less room to expand without raising additional capital.

3. Dividend Yield and Investor Sentiment:

UBA
UBA has consistently offered a solid dividend yield, attracting income-focused investors. The bank's dividend payout ratio is robust, and its strong earnings growth in 2024 suggests that it will continue to maintain this trend, offering a relatively attractive total return (capital appreciation + dividends).

FBN Holdings
FBN Holdings’ dividend yield is also appealing, but it has fluctuated in recent years due to its profit volatility. Given the slower earnings growth in 2024 and the current stock price at N25, investors might see a decent yield but should be cautious about potential dividend cuts if profitability continues to lag.

4. Macroeconomic Considerations:

Both banks are operating in a challenging economic environment, characterised by high inflation, elevated interest rates, and foreign exchange volatility. The Central Bank of Nigeria’s tightening monetary policy and its impacts on loan growth and consumer spending will continue to influence profitability in the banking sector.

However, UBA’s diversified portfolio across Africa gives it a geographical hedge against domestic risks, while FBN Holdings, despite its size and retail network, remains heavily reliant on the Nigerian economy. In the short term, this could give UBA an edge, especially if regional growth accelerates.

5. Future Projections and Target Prices:

UBA’s Outlook: Given its solid performance in 2024 and a positive future outlook, UBA appears poised to maintain its growth trajectory. Analysts are optimistic about its prospects in retail banking and digital services, which should continue to drive revenue. The target price for UBA is likely to remain at N40-N45, reflecting steady growth and profitability.

FBN Holdings’ Outlook: FBN Holdings, while facing some challenges, could see upside if it addresses its NPLs and capitalise on its retail banking strength. A target price of N30-N32 is reasonable, depending on how quickly the bank can stabilise its earnings and grow its loan book.

Which is the Better Investment?

When comparing UBA at N35 and FBN Holdings at N25, the former is the better option for investors seeking growth, stability, and a diversified portfolio. UBA's superior profitability, stronger balance sheet, and better management of credit risk give it a more favourable outlook. The bank’s exposure to the broader African market adds a layer of resilience that FBN Holdings does not fully match.

FBN Holdings, on the other hand, may appeal to value investors looking for a lower entry point and a potentially higher dividend yield. However, its slower earnings growth and higher NPL ratio make it a riskier bet, particularly if economic conditions worsen.

In conclusion, UBA presents a more compelling investment case based on its financial health, growth potential, and stronger performance metrics as of Q3 2024. However, FBN Holdings still offers value for those willing to take on more risk in exchange for potential upside in the medium to long term.

Agbalowomeri:
Technically, Dangote Refinery is not a local industry. It operates within the free trade zone and products from there could be considered as importation too.

What are the implications of total deregulation? Isn't it to allow all-comers in the market, whether importer or local? And the government is meant to hands-off totally? Why is Dangote chasing after government protection when the refinery is operating in a free-trade zone and not liable to pay some or any taxes to the government?

Sunrisepebble:
https://punchng.com/hitech-to-complete-abuja-kano-road-after-julius-bergers-removal/?amp

Bit worrying for JB owners like myself. Seems they have issues with the present administration, or rather the present administration would rather give their friends, Hi-tech, contracts

Agbalowomeri:
Can we consider Dangote Refinery "a home industry"? That's my question

Raider76:
I understand that everyone pursues their intest, and the interest of you and I as consumers is the price we pay for petroleum products. The only party that can control price is the Government. Unfortunately, they are saying that they have a law which has deregulated the sector and they are no longer in control of pricing. So the only option is to persuade the Government to reconsider their stand as provided for in a democracy.

Agbalowomeri:
Technically, Dangote Refinery is not a local industry. It operates within the free trade zone and products from there could be considered as importation too.

What are the implications of total deregulation? Isn't it to allow all-comers in the market, whether importer or local? And the government is meant to hands-off totally? Why is Dangote chasing after government protection when the refinery is operating in a free-trade zone and not liable to pay some or any taxes to the government?

Sunrisepebble:
https://punchng.com/hitech-to-complete-abuja-kano-road-after-julius-bergers-removal/?amp

Bit worrying for JB owners like myself. Seems they have issues with the present administration, or rather the present administration would rather give their friends, Hi-tech, contracts

GeeKudi:
My question: In all of this squabble and its analysis, where does the masses come in?
We are not interested in their roforofo, we just want to buy fuel as cheap as possible.
Who will give us this? Is it what Dangote is fighting for?
The refinery was built largely from the vault of the CBN. Dangote is now denying all of that?
What is the essence of selling crude to him in naira if there is nothing in it for us - the Nigerian market?
We just want to buy fuel as cheap as possible.

Sunrisepebble:
https://punchng.com/hitech-to-complete-abuja-kano-road-after-julius-bergers-removal/?amp

Bit worrying for JB owners like myself. Seems they have issues with the present administration, or rather the present administration would rather give their friends, Hi-tech, contracts