₦airaland Forum

@loco watin dey happen at this critical time.
I hope is not you have cashed out already for December.

GeeKudi:
Ikeja Hotel and Cornerstone both feature on my watchlist as well. Ikeja is really undervalued. The only downside to the stock is the low dividend performance for long termers who may be fixated on dividend, but may be a good stock for capital appreciation.

It may rally up soon. Seems presently to be at a Resistant Point.

CBN Governor says FX Matching System will correct Naira’s true Value.

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has revealed that the soon-to-be-introduced electronic FX matching system will address the disconnect between the current naira-to-dollar exchange rate and the naira’s true market value.

Speaking at the Bankers’ Committee Annual Dinner held on November 29, 2024, at Eko Hotel, Lagos, Cardoso emphasized that the system would enhance price discovery and restore stability to the foreign exchange (FX) market.

Read More👇

https://nairametrics.com/2024/11/29/cbn-governor-says-fx-matching-system-will-correct-nairas-true-value/

GeeKudi:
There is nothing wrong with the attempt to estimate the value the buying entity placed on the shares of the company. Those who hold units of the stock need this to be able to decide if to continue to hold or sell.
If you don't undestand the calculations, you can ask people to explain to you.

Didn't you see the spreadsheet shared by the other guy? His argument is that the other person is wrong because, instead of dividing the total proposed buyout amount by the total shares, they first calculated 17% of the proposed buyout and then divided it by 17% of the total shares. These two calculations are essentially the same, as far as the rules of math are concerned.

The funny thing is, the buyout only covers 83%, so both are actually wrong. If x represents the amount covering 83%, then dividing 100% by 83% of x will give the total amount for 100% OS. If you calculate this at an exchange rate of 1700, you should get roughly 203 naira per share (assuming 1.6 billion naira buyout of 83%). That's all there is to it.

If 1 billion is assumed then 127 naira per share.

megawealth01:
CBN Governor says FX Matching System will correct Naira’s true Value.

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has revealed that the soon-to-be-introduced electronic FX matching system will address the disconnect between the current naira-to-dollar exchange rate and the naira’s true market value.

Speaking at the Bankers’ Committee Annual Dinner held on November 29, 2024, at Eko Hotel, Lagos, Cardoso emphasized that the system would enhance price discovery and restore stability to the foreign exchange (FX) market.

Read More👇

https://nairametrics.com/2024/11/29/cbn-governor-says-fx-matching-system-will-correct-nairas-true-value/

It has been introduced but no difference seem yet

She’s right actually. My view was the price being paid per share was 104 and that was based on ($1bn-838mn) using 1680 then divided by the minority OS to give that figure.

I thought she was wrong with her calculation because I was doing the total valuation ($1.1 and $1.6bn) minus 838mn. To workout the total paid to the minority shareholder

The way I should have looked at it was to find out the price per share based on total valuation divided by total OS.
Which gives us the 116 to 169 per share. If 838mn is paid to the minority then we use our 116 and 169 times the minority OS to see what the total paid for the transaction will be

ositadima1:
Didn't you see the spreadsheet shared by the other guy? His argument is that the other person is wrong because, instead of dividing the total proposed buyout amount by the total shares, they first calculated 17% of the proposed buyout and then divided it by 17% of the total shares. These two calculations are essentially the same, as far as the rules of math are concerned.

The funny thing is, the buyout only covers 83%, so both are actually wrong. If x represents the amount covering 83%, then dividing 100% by 83% of x will give the total amount for 100% OS. If you calculate this at an exchange rate of 1700, you should get roughly 203 naira per share (assuming 1 billion naira buyout of 83%). That's all there is to it.

designking:
It has been introduced but no difference seem yet

WOW

Sunrisepebble:
She’s right actually. My view was the price being paid per share was 104 and that was based on ($1bn-838mn) using 1680 then divided by the minority OS to give that figure.

I thought she was wrong with her calculation because I was doing the total valuation ($1.1 and $1.6bn) minus 838mn. To workout the total paid to the minority shareholder

The way I should have looked at it was to find out the price per share based on total valuation divided by total OS.
Which gives us the 116 to 169 per share. If 838mn is paid to the minority then we use our 116 and 169 times the minority OS to see what the total paid for the transaction will be

Okay, so the person of unknown gender is correct. Now what? What is the end goal—buy, hold, or sell?

Here, hope this helps.
It’s a hold for now. If it ever trades 115, then the decision is up to you from there

ositadima1:
Okay, so the person of unknown gender is correct. Now what? What is the end goal—buy, hold, or sell?

Buacementv@95
Wapco will definitely pay me nothing less than #150.I no sabi do maths on the matter
FMN from #70 to #86 which they could have pushed to #100

Sunrisepebble:
So the premium paid to the majority will be lower than the premium to the minority? Still doesn’t sound quite right. Where was the $1bn figure from Bloomberg gotten from. I was always working with that figure to arrive at 104.

*You were somehow right with your calculations going by the $838m to be paid by HUAXIN.
$838.13m for 83.81% X N1700 (exchange rate) = N105.67
* Conditional clause should also be taking into consideration
* Also note that the majority percentage is 83.81 not 83 being used here.
Nsempas too dey like over-analysis
* We await official document release on consideration per share.

I may have to revisit the document to know where all these $1bn to $1.6bn valuation is coming from...

If they don’t offer you that N150 nko

Streetinvestor2:
Buacementv@95
Wapco will definitely pay me nothing less than #150.I no sabi do maths on the matter
FMN from #70 to #86 which they could have pushed to #100

Sunrisepebble:
Here, hope this helps.
It’s a hold for now. If it ever trades 115, then the decision is up to you from there

The Swiss building materials company Holcim has agreed to sell its 83% stake in Lafarge Africa to Huaxin Cement, a Chinese firm, for $1 billion. This deal is expected to close in 2025, subject to regulatory approval.

If the above is correct, why are you using the funds proposed for just 83% to compute the entire 100%? I understand your assumption that the same buyout amount can be projected for the minority, but when dividing, your OS denominator should reflect only 83%, not the full 100% OS.

yMcy56:
*You were somehow right with your calculations going by the $838m to be paid by HUAXIN.
$838.13m for 83.81% X N1700 (exchange rate) = N105.53
* Conditional clause should also be taking into consideration
* Also note that the majority percentage is 83.81 not 83 being used here.
Nsempas too dey like over-analysis
* We await official document release on consideration per share.

I may have to revisit the document to know where all these $1bn to $1.6bn valuation is coming from...

My sweet sister, me tire for all this plenty analysis with incomplete info.

EFFECT OF NAIRA DEVALUTION ON RETURN ON SHARES

The 10 years CAGR of naira/usd from 2013 to 2023 ( 160/usd to 760/usd) = 19%
The 10 years CAGR of naira/usd from 2014 to 2024 ( 180/usd to 1750/usd) = 29%
Which means, if you had converted your 1.6m naira to 1,000 dollars as investment in 2013 and changed back in 2023, you would have gotten 7.6m naira at rate of 19% increase per year or 17.5m naira in 2024 at the rate of 29% per year.
If you had invested the 1,000 dollars in dollar fund yielding 7.5% per annum (stanbic dollar fund rate), then it would have been 15.7m naira from 2013 and 36m naira from 2014.

if you had traded that same 1.6m in a fundamental sound stock from 2014 to 2024 e.g Okomu -
the 10 year CAGR from #35/2014 to #366/2024 = 30% per annum = 22m naira. If we factor in dividends yield of 5% for 10 years Cagr, then total return on investment will be 35% per annum = 32m

That headline is inaccurate. Find time to read the document and we would safe a lot of space here.

ositadima1:
The Swiss building materials company Holcim has agreed to sell its 83% stake in Lafarge Africa to Huaxin Cement, a Chinese firm, for $1 billion. This deal is expected to close in 2025, subject to regulatory approval.

If the above is correct, why are you using the funds proposed for just 83% to compute the entire 100%? I understand your assumption that the same buyout amount can be projected for the minority, but when dividing, your OS denominator should reflect only 83%, not the full 100% OS.

ositadima1:
My sweet sister, me tire for all this plenty analysis with incomplete info.

Lol. The document was a bit complicated....
HOLCIM wants to sell for $1bn
HUAXIN wants to buy for $838.13m
Agreement reached for $838.13m on conditional basis
There may still be adjustment either slightly up or down
Las las, the final official released price will take priority over all these analysis.....
The Koko be say, make the price sha be N100+ 😁

emmaodet:
EFFECT OF NAIRA DEVALUTION ON RETURN ON SHARES

The 10 years CAGR of naira/usd from 2013 to 2023 ( 160/usd to 760/usd) = 19%
The 10 years CAGR of naira/usd from 2014 to 2024 ( 180/usd to 1750/usd) = 29%
Which means, if you had converted your 1.6m naira to 1,000 dollars as investment in 2013 and changed back in 2023, you would have gotten 7.6m naira at rate of 19% increase per year or 17.5m naira in 2024 at the rate of 29% per year.
If you had invested the 1,000 dollars in dollar fund yielding 7.5% per annum (stanbic dollar fund rate), then it would have been 15.7m naira from 2013 and 36m naira from 2014.

if you had traded that same 1.6m in a fundamental sound stock from 2014 to 2024 e.g Okomu -
the 10 year CAGR from #35/2014 to #366/2024 = 30% per annum = 22m naira. If we factor in dividends yield of 5% for 10 years Cagr, then total return on investment will be 35% per annum = 32m

Your analysis is inaccurate because it relies on hindsight bias. While there is only one popular way to invest in foreign currency, there are multiple options when it comes to stocks. Selecting OKOMUOIL after the fact is biased. Instead, you should use something like the NSE index for a more balanced comparison.

Sunrisepebble:
If they don’t offer you that N150 nko

They will since we a dealing with chinko guys.They will pay high premium once it has to do with naija because they know they will hammer. When they arrive I expect them to try buying alhaji too.Naija is a gold mine to that country. Do you know how it has pained them that our government refused importation of cement from China all this yr

GeeKudi:
That headline is inaccurate. Find time to read the document and we would safe a lot of space here.

Instead of posting the actual details and freeing the thread from endless back-and-forth, you’ve been busy calculating imaginary numbers all day. You've been stuck on this elementary calculation since the day before yesterday.

Una no dey tire, shuu. Yet we no know if na buy, sell or hold una talk.

ositadima1:
Your analysis is inaccurate because it relies on hindsight bias. While there is only one popular way to invest in foreign currency, there are multiple options when it comes to stocks. Selecting OKOMUOIL after the fact is biased. Instead, you should use something like the NSE index for a more balanced comparison.

Okay bro.

Let me redo the calculation using the NSE index and compare.
2024 = 97,000 and 2014 = 35,000. 10 years Cagr = 12% which will give us = 5m naira in 10 years.
My calculations are not totally accurate, just a guide or reference

The link to that document was posted here. You admitted to not reading the details yet yourself but you keep poking fun at people and accusing them of wrong calculation. Aren't you just being loud for nothing?

ositadima1:
Instead of posting the actual details and freeing the thread from endless back-and-forth, you’ve been busy calculating imaginary numbers all day. You've been stuck on this elementary calculation since the day before yesterday.

Una no dey tire, shuu. Yet we no know if na buy, sell or hold una talk.

GeeKudi:
The link to that document was posted here. You admitted to not reading the details yet yourself but you keep poking fun at people and accusing them of wrong calculation. Aren't you just being loud for nothing?

I got tired of this, since Sunday evening. Some people have been busy calculating without providing any clear direction. I’m sure I’m not the only one feeling this way—it’s been more than two days. Haba!!!

emmaodet:
EFFECT OF NAIRA DEVALUTION ON RETURN ON SHARES

The 10 years CAGR of naira/usd from 2013 to 2023 ( 160/usd to 760/usd) = 19%
The 10 years CAGR of naira/usd from 2014 to 2024 ( 180/usd to 1750/usd) = 29%
Which means, if you had converted your 1.6m naira to 1,000 dollars as investment in 2013 and changed back in 2023, you would have gotten 7.6m naira at rate of 19% increase per year or 17.5m naira in 2024 at the rate of 29% per year.
If you had invested the 1,000 dollars in dollar fund yielding 7.5% per annum (stanbic dollar fund rate), then it would have been 15.7m naira from 2013 and 36m naira from 2014.

if you had traded that same 1.6m in a fundamental sound stock from 2014 to 2024 e.g Okomu -
the 10 year CAGR from #35/2014 to #366/2024 = 30% per annum = 22m naira. If we factor in dividends yield of 5% for 10 years Cagr, then total return on investment will be 35% per annum = 32m

The first scenario was possible because of the T pain special two yrs dollar movements
The second can not be possible because I don't think the 7.5% has existed for that long .
The third was possible because it had to do with a company well managed
Thanks for the insight
Finally going forward the first two scenerio maybe difficult to achieve again. If you do you DD well for the last case you can achieve it again.

Okay. I can only hint you on my personal decision. I am going to hold till it crosses 100 (if they allow it to get there, anyway) and stay vigilant to see if it goes further than that. I can't wait till May 2025 to be paid off by the Chinkos.

As they say, DYOR.

ositadima1:
I got tired of this, since Sunday evening. Some people have been busy calculating without providing any clear direction. I’m sure I’m not the only one feeling this way—it’s been more than two days. Haba!!!

emmaodet:
EFFECT OF NAIRA DEVALUTION ON RETURN ON SHARES

The 10 years CAGR of naira/usd from 2013 to 2023 ( 160/usd to 760/usd) = 19%
The 10 years CAGR of naira/usd from 2014 to 2024 ( 180/usd to 1750/usd) = 29%
Which means, if you had converted your 1.6m naira to 1,000 dollars as investment in 2013 and changed back in 2023, you would have gotten 7.6m naira at rate of 19% increase per year or 17.5m naira in 2024 at the rate of 29% per year.
If you had invested the 1,000 dollars in dollar fund yielding 7.5% per annum (stanbic dollar fund rate), then it would have been 15.7m naira from 2013 and 36m naira from 2014.

if you had traded that same 1.6m in a fundamental sound stock from 2014 to 2024 e.g Okomu -
the 10 year CAGR from #35/2014 to #366/2024 = 30% per annum = 22m naira. If we factor in dividends yield of 5% for 10 years Cagr, then total return on investment will be 35% per annum = 32m

I like your angle to this..
Since the Eurobond is almost risk free, a better comparism will be an almost risk free
stock(like the Okomu you used)
But to reduce the selective bias as pointed out, the NSE30 or the NSE20 index can be used instead rather than the entire ASI.

ositadima1:
Your analysis is inaccurate because it relies on hindsight bias. While there is only one popular way to invest in foreign currency, there are multiple options when it comes to stocks. Selecting OKOMUOIL after the fact is biased. Instead, you should use something like the NSE index for a more balanced comparison.

Why should he use nse index. How many people use that here to calculate thr returns or trade the index.why didn't you complain about the 1750 for dollar which could be extreme position going forward in this devaluation thing..
Lol

UBA Bank Denies Involvement Of Chairman, Tony Elumelu In Dele Farotimi’s Arrest In Lagos

Streetinvestor2:
Why should he use nse index. How many people use that here to calculate thr returns or trade the index.why didn't you complain about the 1750 for dollar which could be extreme position going forward in this devaluation thing..
Lol

There’s no way you could have predicted how well OKOMUOIL would perform 10 years ago, given the many stocks available at the time—any one of them could have been chosen. In your portfolio, some stocks underperformed while others did very well. If you could see the future, would you have invested in the underperforming stocks back then? Selecting OKOMUOIL for this comparison, rather than Nigerian Breweries, reflects the bias of using today’s information to judge yesterday’s decisions. As for the dollar, there are no alternative options—you either invest or you don’t.

Tell them o. They think they are all Nostradamus because they got lucky with one or two outstanding investments.

ositadima1:
There’s no way you could have predicted how well OKOMUOIL would perform 10 years ago, given the many stocks available at the time—any one of them could have been chosen. In your portfolio, some stocks underperformed while others did very well. If you could see the future, would you have invested in the underperforming stocks back then? Selecting OKOMUOIL for this comparison, rather than Nigerian Breweries, reflects the bias of using today’s information to judge yesterday’s decisions. As for the dollar, there are no alternative options—you either invest or you don’t.

HesInMe:
It is almost surprising, although somewhat understandable, how little people understand the impact of FX policy and devaluation. Oya, adjust your portfolio and its 1000% gains for currency devaluation, i.e., quote it in US dollars. Then compare with someone who kept their money in dollars and earned the average 25% gain of the S&P 500 index.

Result: You are a lot poorer than you know. But continue suffering and smiling.

It’s obvious People know very little , some have even gone as far as saying the value of dollars or other fx relative to the naira does not matter , since we spend naira yet Prices of everything is galloping due to the same devaluation and inflation caused by high fx rate , a lot of companies we follow reference impact of fx and dollars in there reports and operations , it’s not by agidi or strong head o , people will learn