₦airaland Forum

OBAGADAFFI:
You are not going the bigger picture.

All these FX burden CBN is carrying is unnecessary if they had allowed owner of FX remittance to get their FX, not Naira.

Most Companies and individuals formally get their FX from various export businesses and other FX remittances.

But they are now forced to source FX through CBN form M or the black-market at higher rates.




Nigeria receives $17.5 billion diaspora remittances in 2019

https://nairametrics.com/2020/01/11/nigeria-receives-17-5-billion-diaspora-remittances-in-2019/#:~:text=Remittances%20are%20funds%20transferred%20from,source%20of%20much%2Dneeded%20funds.

Nigeria received $96 billion diaspora remittances inflow in 6-years
https://nairametrics.com/2019/10/11/nigeria-received-96-billion-diaspora-remittances-inflow-in-6-years/

My Oga i have told you to take all this remittance reports with a pinch of salt.

All the reports are resting on a survey / publication done by PWC which in itself had been questioned on the definition it ascribe to Remittance. For example the remittance reffered to by PWC in its report include non oil export proceed (and is even the largest contributor) which is outside the scope of Diaspora Remittance, and this non oil export proceed is even presently part of IEW market. the other leg of which could rightly be defined as Diaspora remittance (i.e. money sent by Chukwudi/ Adebola / Abdulrahman) as stated by Oga OGG via western union / moneygram e.t.c are not that big circa less than $5b annually, this also is currently on the table becos it is dollars proceed from such remittance that pre covid CBN channeled to BDC weekly sales / PTA / BTA. So on a bigger picture like you said all part of the remittance are already in the market place

But as a said in my last post why pre 2015 all the so called remittances werent able to stop / stall devaultions? why do the FPI catch cold once oil price go south, if the so called remittance is of such big impact on the FX plays in Nigeria

las las make we pray make dem (CBN) sort / solve the FX problem quick so that some of those global liquidity can find its way down to NSE, becos na thier my own garri dey

GonFreecss1:
You have said it all perfectly sir.

In Nigeria you can’t only be looking at Financial statements. Studying the economics of it all, is a must.

My Oga it is not only a must Sir. it shld even be d first thing b4 u start spreading / analysing financials becos it is the Macro that direct the flow of figures in those financials you want to spread / analyse.

That is why the NSE is not dancing to the global surplus liquidity fueled rally as Oga Rabbi had been expecting.

All said however i just pray dey find a solution to the FX debacle quickly becos na their (NSE) my garri dey. no be for all this grammar wey i dey blow since

OBAGADAFFI:
Diaspora remittance is one of the big sources on FX in Nigeria.

Pre-2015 CBN restrictions most Nigerians don't need CBN form M to get FX.

You get you FX from Western-Union etc, and trade it with anyone, so we have surplus FX in circulation.

Now Diasporans don't send much FX anymore, since the CBN is hoarding it.

These CBN restrictions created the current FX crises.

FX business is demand and supply.

What we are experiencing is a supply problem.

My Oga this Diaspora funds is overrated

Forget abt the futuristic figure qouted by PWC which was latched onto by politician to score cheap political points

werent the Diaspora remittance available before 2016? if so why was it not able to stop / stall all devaluations before then (i.e. b4 2016)

CBN placed restrictions in 2016 on remittances because it has become a black hole aiding all sorts of crime (laundering e.t.c.) however the CBN still designed another route for the same remittances inflow to reach retail end user by channeling all inflow via remittance to BDC weekly sales / PTA/ BTA.

Anyway we had both agreed on the fact that there is a supply (either through FPI / reduced oil receipt as I stated or via Remittances as u stated) problem which if not resolved wld continue to impact negatively on NSE

OBAGADAFFI:
The simple solution is for the CBN to ease the FX restrictions,, by allowing owners of FX remittance to get their funds in the foreign currencies and not Naira.

my Oga that soultion is not that simple

where is the FX to give them?

OMO maturity btw April and June was of $6b, if as data suggested that FPI constitute the bulk in that (OMO) market place up to as much as 60% then it can safely mean abt $3.6b want to leave d country (that is not counting other markets oooo e.g. Stock ) you wld be talking abt $4 - $4.5b that want to leave. the sales in IEW window btw same period was $900m -- $1b taking the two together you wld have a net of $3 -- $3.5b FPI funds trapped. THE $3.5b above excludes the need of other FX users (importers / fuel / debt service e.t.c)

My Oga if all above is taking together CBN wld need to find abt $10b, if u take $10b out of current reserve it wld give you $25b left of which some component of the remaining $25b is illiquid due to several factors e.g. swap lines / gold holding e.t.c) then you are looking at $15b liquid left which is barley able to cover 2 months of imports.

My Oga if above plays out (i.e. giving them the remittance as you stated) there wld be a massive run on the Naira and by then i doubt if anything of wld be left of the NSE that we currently play. so you see CBN is caught between two hard rocks and it is just doing its best till inflow (post covid / higher oil price) wld allow it to better manage situation

RabbiDoracle:
Maybe Meffy is holding back so that he will devalue once rather than doing it many times down the line. Meffy may have seen the handwriting on the wall about developed markets.

That is exactly what they dont want him to do hence d debacle, what they want is free float and Oga Buhari (not even meffy) is very abhorrent to that

on a purcahsing power parity d naira wld be fairly priced between 380 -- 420, considering that the Naira is already at the tail end of this spectrum, one wld have assumed that the FPI should be coming in by now but that is not the case which means they want more (Egypt 2016 comes to mind).

i think both party (Nigeria vs FPI) wld eventually settle for the middle ground i.e. a single rate for all markets but which is being managed by CBN by being the MM in that market.

Hw soon that wld happen is what i cant say because the CBN wld need a large war chest (circa 40 - 45b reserve) to effectively play MM for a single market which they dont currently have. i doubt if the FPI wld come in until that middle ground is achieved.

So this current consolidation might go on for a long time and even has a higher probability of spurring a downtrend if it lingers for too long (though not like that seen in March)

RabbiDoracle:
NSE seems disconnect from the global markets that has been bullish since April 2020. The reasons I do not know.

Some are making ATH right now.

Chief the reason is the FX debacle

DrAwo:
I download 5 years worth of annual reports from the companys website, extract the data I need and enter it onto a spreadsheet... From it, I calculate all the ratios and figures...

If you know how to use Microsoft excel, its pretty straightforward...

God Bless you plenty for sharing info from this your hardwork

Spreading financials no be easy work

DeRuggedProf:

Baba i dey gbadun u

God bless u plenty for all these valuable info u have been dropping

Hello my people

anybody been able to log on to Morgan Capital this morning?

im having some challenges loggin on

RabbiDoracle:
This market is not different from the ones we trade abroad

The same model (hunting mispriced companies with FA and TA) applied abroad will always work here at home.

You can't see a bull and call it a snake.

In the 2016, Nigeria entered recession and that was the time the bull started for banks. Is history about to repeat itself?

To d bold

ti aba ri Erin ki agba pa ri erin Ajanaku koja mo ri nkan fiiri

if we see an Elephant let us accept we see an Elephant.

An Elephant is not something we would say we saw in a jiffy

Heishere:
Well for one the recapturing exercise initiated by PENCOM which is a prelude to the transfer window coming soon.

All PFAs are mandated to recapture their customers' information in preparation for the transfer window. Any PFA that fails to recapture their customers' information within the stipulated time frame stands a chance of loosing the customer another PFA that successfully does that. Then the transfer window will give contributors the choice of porting from one PFA to another.

So imagine the effect of the above regulations on small PFAs and the ones with over-bloated customer base like Stanbic-IBTC pensions. The industry is going to be very competitive soon, so there will be mergers and more acquisitions.

Thanks appr8

Heishere:
I suppose they are running from the new regulations from PENCOM. Pension industry is most likely going to change next year.

Hello Chief

what are teh new regulations? and what are the changes being expected?

wld appr8 if you share ur insight

Tvegas:
https://nairametrics.com/2020/06/23/cbn-governor-confirms-exchange-rate-unification-plans/

Thanks appr8

TLAX:
Interesting Read.

Thanks appr8

RabbiDoracle:
The only thing that can derail the bull on NSE is if there is another selloff in the global world markets(US and EU combined). And that run will be stopped abruptly because Fed will start to buy stocks

Fed has entered one-way! Dem no fit go back.

So markets may stay artificially inflated for a while due to increased pumping. Maybe if investors lose faith in the dollar and fear to hold dollar debt, na that time the main oso Abiola will happen.

Everyone is looking for which country will be safe to hold their hot money till the crisis in the US abates. They know that the US and EU stock markets are running faster than the economic recovery and this is an anomaly.

Chief i totally agree with ur postulation (Fed printing / hot money) but the last leg of it (i.e. the flow towards emerging market a la i.e. NSE) is what other commentators are calling attention to. Considering the peculiarity of the regulatory environment of NSE (i.e. CBN FX regime) dont u think the inflow would be late in coming (if at all it come) because the FPI might want to give attention first to other emerging market ( e.g. Turkey / Egypt e.t.c) without the type of CBN FX regime isue but with similar return to NSE (rsik / reward). Also that when they eventually come in what wld be left wld be crumbs (other markets having eating to satisfaction before they look at the side of NSE) hence this crumb might not be much to spectacularly move NSE.

I would appreciate your take on above

Tvegas:
This session was organized to help calm the nerves of foreign investors now awash with bailout dollars but worried about Nigeria’s faltering economy and its likely ability to trigger further devaluation. Mr. Emefiele did not confirm if another devaluation was in the offing.

Rabbidoracle, The above is from Nairametrics write up on a recent CBN event where fx issues were discussed. Even though i pray for the inflow of those free foreign funds there by leading to a massive bull. However, there is too much uncertainty in this market for that bull to happen anytime soon. The CBN is living in denial hence a second round of devaluation is inevitable. I also see the current sideways trades happening for a while.

Hello Chief

kindly avail a link to the said write up.

Thank you

TLAX:
I am not so sure NSE and many emerging markets will be impacted directly from this money printing. While these markets have offered returns over and above what is obtainable from Europe and North America, the uncertainties around exchange rate, CBNs next move and inability to get the monies out of the country will be a major dampener. The guys are not walking their talk of easy exit for foreign investors. The monies trapped here for now cant give the market the kind of push it needs.

By December 2020, If the index gets back to 29k+ where it was in January 2020 i will consider it a decent performance. Isolated stocks may however shine during the remainder of the year. At least M&A in the works should create opportunity for people.

***modified

My Oga well said

First bold is one of the reason why despite Oga Oracle postulation about the pending and coming 10-10% bull im still CAUTIOUSLY optimistics hence holding to some shred of cash. Couple with the fact that if earnings is taken in context of covid 19 hence discounted for a conservative 20% downside most liquid stock are already (or even in some cases ahead) back to pre covid yield level. (e.g pre covid Zenith 2.8 dividend would give 14% yield around the equilibrum price of 20 it was doing then this discounted for 20% covid downside would give potential dividend of 2.24 which marked against the current 16 price showed zenith being back to pre covid yield). So barring substantial FPI NSE might just be appropriately priced at current level taken into consideration its other peculiar risk factors

Mcy56:
Investing.com I think.

Thanks sis

its not investing.com, he mentioned one other one but i cant remember the name

Oga Loco wld appr8 if u help out

Oga Loco

i beg what is the name of that website you derive technicals from

RabbiDoracle:
The US stock market is moving too fast. It needs to go in tandem with reality. More like wait- and-see slow rise (though not falling like in March and not rising too fast).

But I'm watching sha and comparing data.

On EM front, I don't see any issue for now because most money will go chasing yields in most EMs. So na to siddon dey wait for them.

. Ok thank u appr8

RabbiDoracle:
Though fundamentals of all economies have not yet aligned with reality.

. Boss wld appreciate ur perspective on above

rebekah2011:
I have been looking at the market in the last 3 trading days. It has been difficult to pick my targets. Dangote Cement at N130, MTN at N108, Africa Prudential at N3.50, Ucap at N2.25, and Zenith below N14

Dont worry it wld soon come

Not much positives to propel the market for some few coming months

except for unwinding of global lockdown and its knock on effect on oil which underpin the country FX position and ultimately its financial market however in my opinion this had already been priced in as at date hence the only thing that can come from it is a downside if it does not happen as priced in by the market.

so u might see ur above price before / arnd when 2nd quarter result start coming in though you shld not expect teh bloodbath of March/ April cos i dont see market getting to that severe level again

so patienceeee

klas:
http://www.nse.com.ng/Financial_NewsDocs/29884_GUINNESS_NIG_PLC_FINANCIAL_STATEMENTS_MAY_2020.pdf

. Thank you. Appr8

rebekah2011:
Nice observation. You are an experienced grave digger. Have you seen the Q3 results? You may need to go and look at it again. EPS 62K

Chief kindly bless me with the q3 (which you referred to) result

Mcy56:
28th April and payment same day or on 29/30th.

Thanks appr8

i beg my people when is the rescheduled AGM for UBA / UCAP & AFRIPRUD?

RabbiDoracle:
I want to believe that Brent will slide towards 28. I don't think the low of 20 will be seen again. So this is still OK before the next run up in price that will start for Brent.

i agree, in addition, d 28 in my opinion wld also be shortlived (my take is that it wld only be use as an excuse for upcoming shakeout)

as i said earlier my call in the near/short term is 30 - 40 range (30 - 60 / 90 days)

RabbiDoracle:
Lockdown has nothing to do with the fall going forward. Everything has been priced in.

If you see any fall, it is profit taking. PT will hardly dent this market. So I advice people (who can hold) to hold tight if you bought low between 16th to 24th of March 2020.

The market will shake out weak hands and still move to the level it wants to get to.

Chief some wicked shakeout is loading. The theme wld b on declining brent

RabbiDoracle:
Fuel is cheap where we are due to low oil price. But Trump has seen that this like oil price will cripple oil industries and their own job losses will be more painful. Most of them can't fit into any other sector. I think Trump wants to reduce the unemployment that will result from that area. Shale companies will be bankrupted very fast once the low oil price stays for more months.

It will hover around 40 to 50 as economy picks up. Once there is increased in economic activities, it will fly because of the cut.

i agree.

D floor of 30-40 i am looking at is near term (30 - 60 days)

that 40 - 50 wld happen as the world economy recovers obviously (60 -90 days)

but long term oil is on a very long thing as i cant fathom what events / fundamentals cld bring it back to the 70-100 range

RabbiDoracle:
Covid 19 has peaked everywhere. EU, Asia, New York. Around this April, they should start coming out with from their houses and start to spend cheap money given to them. This will keep most companies still operational. Employment will begin to pick up afterwards and everything will be over. But the fact still remains that WEALTH HAS CHANGED HANDS.

There are still headwinds ahead but it cant be as ferocious as what we saw dis Months (March 2020)

that is why i thinned out on cash this week

RabbiDoracle:
Covid 19 has peaked everywhere. EU, Asia, New York. Around this April, they should start coming out with from their houses and start to spend cheap money given to them. This will keep most companies still operational. Employment will begin to pick up afterwards and everything will be over. But the fact still remains that WEALTH HAS CHANGED HANDS.

Dem do Trump strong thing o. Those economic indices(record stock market rise and lowest unemployment record) he brags with are now too bad. Now it will be under him they had the fastest decline in US stock market, pandemic and the highest number of unemployed. He broke the extremes of economic records

My brother na real blow dem deal the guy

if he survives this (and get reelected) he wont ever be d same (for good or for worse)

locodemy:
God bless you.
We are here for a bull.

Sir,will this be a strong bull that can stay longer or we need to watch our back as a result of this covid-19 pandemic?

Even if the outcome does not go as said by Oga Oracle, there is a backstop (from Trump) of tarrifs on oil destined for US market that would kick in

so in effect deal or no deal a floor had been drawn on oil ( me think this shld be 30 - 40) going forward