₦airaland Forum

rebekah2011:
https://www.zenithbank.com/media/2486/group2017fye-conference_call.mp3

Thanks much appreciated

pluto09:
Can you shed more light on how banks make/loose money on derivatives.

only average knowledge mysef

it consist of several type (forwards/ futures / swap e.t.c)

inlayman terms it means taking a bet on what the future exchange rate / price of financial instrument (e.g. currency) would be. something more like what short term traders on NSE do. so those who trade in it make money when rate / price move for them and losses when it move against them

pls note that nothing is wrong with derivative itself (it is a class of financial instrument which is quite useful for a more efficient functioning of the financial markets) . my concern is on the volatility of its income line for a traditional bank (that should be more involve in lending).

and for fundamentalist it make projection difficult if not impossible. so i would expect banks who had this income line as a MAJOR to be more suitable for short term traders (kind of like an alignment of its income to the traders it attract) because of surprises in its result(a la Access Bank 2016 -- 2017 FY) which is not suitable to my personal risk appetite

Agbalowomeri:
Has UBA ever paid more than Access?

since the last two FY

fxuser:
super risk management move , good reaction . kudos madam
i'm also at my highest cash level since dec also
anyway , this is d worst weekly performance for bank Index. Week to date is a massive -8.35% (massive weekly red engulfing candle)
Personally , got my first humble pie, fidelity holdings was bady out of position wt an avg cost of ard N3 ..
i dont know how to avg down , i chop my humble pie without fuss (blame d itchy finger issues later)
every market likes to serve humble pies ard every now and den (crypto community de chop am back to back dis yr lolx)
dis sell off is likely to continue into the new week ..
opportunities will present themselves again , we wud patiently wait and not be drawn into chasing them lol


Key reminder to Self:
Never ignore negative divergences

@fxuser

which of the time horizon negative divergence do you think is more potent

Daily? weekly? or monthly?

learning ooo

wanaj0:
GTB bank stated that they did not partook in the CBN swaps

ok beta for them

to buttress what i am talking about above.

the decline of Access bank result for 2017FY was largely due to a loss of N33.63b from derivative instruments. a line of income that produced N53.32b profit for 2016FY, this speaks to the volatility of this line of income which is giving me concern as stated above.

rebekah2011:
Access Bank shashe, 107b in forex income. Is our bank doing banking at all.

thats my fear going forward for nigerian banks after the extra ordinary FX gain and TBills income of last two years (which brings with it sustainability question)

same thing i.e FX gain (from derivatives) was pivotal for Zenith (yet to critically look at GTB) for 2017 and Zenith had stated as per conference call that they expect more from that line of income (which might have necessitated the current sell off).

if you understand derivative to be a very volatile and risky venture then u might start getting concern for Nigerian banks.

N.B I am heavy on the banks though seriously thinking of taking advantage of next bull to cut down cos of this concern except this concern is allayed before then

Agbalowomeri:
Abi na Jim Ovia dey sell
Another 100mlu today

im positive he wld b on either side of d fence

amount sold since last three trading days is beyond d remit of retail investor.

its quite scary

Jejebaba:
Zenith might end in full bid today

possibly but dont bet on it
that Friday guy is d real badt guy
cld be preparing to rain it on them
wld rather w8 till 2moro and pay a small premium

Zenith

Avalanche over or bait?

Agbalowomeri:
Never ignore correlations

ominous sign hmmmmmmmmmmmmmmmmmmm

fxuser:
hey chief
Not privy to details.

Thanks appr8 ur response

onegentleguy:
I've heard some folks screaming that the few banks that have so far released their YE 2017 result only managed to grow their top line because of the earnings remittances from trading income. ...to them this would not be sustainable and so they argue that they do not see the banks surpassing or even repeating the feat come 2018.
Well, I thought so myself too when the banks particularly those in the 1st teir category grew their top line majorly from fx related earnings in 2016. ...for just like now, I was also among those who argued that the big banks may not be able to sustain those record earnings of 2016 going into 2017. ...but then, they just did.
Looking ahead of 2018, some persons now also have a similar doubt. ...understandably so but before we drive up conclusions, let's try and put a few things in perspective;

One of the major concern of those who doubt the sustainability of a fantastic result like that of ZENITH BANK going into 2018, is that they believe that loans to the real sector has had little or no effect to their growth in earnings. ...according to some, a situation where profit had increased by over 60% while loans and advances to the real sector had decreased by over the same margin is virtual and can not hold much water.
But then I ask, was there really any better option for the banks in 2017?. ...or put in a more specific light, would the banks have been able to grow their earnings if they had tour the path of lending to the real sector?
Pls we do not need to pretend. This is Nigeria. ...a country where our level of credit worthiness is near zero. A country with a very harsh business environment. ...where the ease of doing business has been treading downwards since the inception of this administration. ...and the last time I checked, a bank like ZENITH is also nigerian.
No one should blame the banks for taking advantage of a clear opputunity of low risk arbitrage from government securities. ...just like they did from mainly fx related gains in 2016. The banks were basically trying to be flexible with a view to better their margins.
Besides, the weak economic indicators of 2017 coupled with the reccession clearly shows that a bank like ZENITH and GTB took the best decisions there was to grow their top line.
As a bank, been competent would mean that they go for risk free govt securities at high interest ahead of any 'damn' loan with high risk and which would've only aggravated their already fragile NPL ratios. ...for there was even a higher chance of a loan default given the inflationary pressure and many struggles on the fiscal side of the economy in 2017.
Before anything else, the banks are in business and strictly so to make returns.

Going into 2018, my take is that the big banks will most likely sustain their growth. ...and I have every reason to believe so looking at the core single indices and the general economy at large. ...well at least for now.
Let's not also forget that there are several revenue streams for the banks. ...and interest income is just one of them.

In all, the overall performance from the management of a coy like ZENITH shouldn't go without a good measure of commendation. ...apart from the small matter of provisioning, which I believe is an industry wide issue, the bank performed exceptionally well.
...an in-depth look at the 2017 YE result and that driving from their perfomance of 2016, gives less room for doubt going into 2018.
I was really impresed by the result, particularly the spike accross all major revenue lines.
I already stated it here that ZENITH BANK retains a BUY rating from my end. ...and at a good margin at that.
As at todays closure, I have a fair value that is at a nearly 51% discount from todays closing price of N28.75.
My fair price remains N43.

But then again, the market has its own way of thinking.

Disclosure: I currently do not hold zenith in my portfolio. ...but I intend to do so in ernest.

Disclaimer: This analysis is purely suggestive and is merely the opinion of Onegentleguy. ...It shouldn't be interpreted to mean any kind of recommendation.
DD still always advised pls.

Hello Chief

while i agree that banks have several income line, my take is that apart from the two mentioned above all others except interest income (risk asset) cant deliver exceptional growth as done by the two (i.e FX and TBills). at best they wld deliver some growth but it wld be largely benign. hence the only play i think could fit into the magnitude of FX and tbills growth of last two season is NPL unwounding and possibly tax assets.

That said where in your experienced view where do you think the next growth story is going to come from considering that the avenue for growth in last two years is currently being closed (FX and TBills).

wld appreciate yours and others (Rabbi/ Agba / Pluto / Emma/ Wanajo / CP e.t.c) insight / perspective

BullBearMkt where a thou??/

currentprice:
he is catching fun bro. thank God the post is not coming from mendes119 . pple could have put e-types on his neck and put fire

a stock with N56 fairprice for N28 @ 8.7 dividend yield wouldn't be a bad deal for some to hav.

ok then i ws jst trying to be sure im not be blindsided

as for mendes i guess its only those who dont know what they are buying and reason for buying as well as a handle on their own emotions that wld be bothered by his banters though he also need to exercise some patience on his banters in other to avoid unnecessary battles so as to conserve his energy for possibles wars

longlife20:
It will get to 15, just wait.

Hello Chief
wld appr8 if u share what informed above, is it cos of current bear? or something rooted in fundamentals? or just gut feelings?

robobo:
@ fxuser can u pls give more insight as per bold?

wld appr8

@fxuser

chief wld appr8 ur response to above

thank you

Agbalowomeri:
For me, anything higher than 22 makes the downside risk higher than upside potential; even for long termers at least you suppose make 10% dividend on cost

never say never

Though probability might be low however you could possibly get your wish if it is marked down sub 30 and q1 is flat or down from previous year


N.b heavy here but willing to accumulate more at the current price range

fxuser:
Mid Week Bears

- very strong bearish mid week supply
(some say its cos of a few PFA's dat were slammed by pencom ! umm mkts like to find theories dat suit them)
- some stocks bounced off the day low (Ex: dangflour, gtb & co )
- most still weighed down by d sellers
- d bears are not done yet
- interesting bearish earnings season


#brace

@ fxuser can u pls give more insight as per bold?

wld appr8

fxuser:
Ucap
- on full offer
- so 35 kobo is vexing dis greedy dividend hunters
- issorai

.

My Oga no worry dem go recalibrate dir expectation by the time dey see d dividend yield on so called 1st tier banks

expect generally 5-6% yield at BEST form this set as at todays price (i.e. 1st tier banks).

it is then they wld know that d 7.7% and 8.5% of Afriprud and UCAP is a bounty

N.B im on both side of d fence jst dat my expectation has been well calibrated as i wasnt expecting more than as paid by Afriprud and UCAP

fxuser:
Strong short term breakouts need:
1) Earnings report > FA's expectations / projections OR
2) Dividend > Retail investor expectations


loll.. those that fall short . . umm

Afriprud

1) Earning == ( in line, no positive or negative surprise)
2) Dividend == (not in line guess retail players already priced in 50k)

my take considering that 1 is in line and 70% institutional holdings i think it wld find support at the next cliff.

wld appr8 comment

fxuser:
Bids
- there are some bids one needs to be mindful of :
- the shadow bids
- the support bids
- the fake bids
- the disappearing bids
- the MM bids
and be be lo

Boss wld app8 if u can highlight a xteristics of each of above for the inexperienced eyes like ours

hmmmmmmmm

Afriprud
UCAP
UBA

all approaching / at full offer

collective punishment or MIB things

RabbiDoracle:
I think Access is being controlled so that when they pay dividend, it will be close to 10%.

If it is allowed to go to 15, any dividend will give a yield far away from 10%.

none of d tier 1 bank can go near 10% DY at todays price

the best they wld do for final DY is 4-6.5% at todays price

nd cumulative DY of 4.5 -8% at todays price

@ Oga FXuser

please what says the chart (on all three timeframe) on

UBA
ZENITH
UCAP

thank you

DeRuggedProf:
Lol....

We will ask others instead of you then....
CP, deliver us with your system.
FX, Microscopically zoom in on Livestock's daily, weekly and monthly charts.
Remember to give us a summary devoid of all those Japanese clouds, we cant afford an atomic bomb here.
All we need is simple explanations on what action to take and not incantations....
Remove all your DRAGON FLIES, Parabolic SAR, ICHIMOKU CLOUD, (it's dry season here self... ), Three white soldiers ( we are not in war time).

Biko.

lolllllllllllllllllll

i beg make una no injure person early in d morning

TLAX:
For those who bought shares from November 2017, dividend yields on your stock are going to be sub 5%. It may still be attractive to you if you annualize considering how long you have held, and how quickly, and at what price you can dispose. My forecast Y/E dividend for some companies are as follows, so over to you guys. Do the yield calcaulations based on your Av. Cost Price:

UCAP - 55k
.

Good Job

however i sincerely doubt if UCAP can pay up to 55k for 2017FY. the 50k that was paid last year was partly due to exceptional item of the insurance arm sold. to even equalize the 50k of last year might require them paying as high as 80% of annualised profit of result as at q3. i think it shld be more in d region of 35 - 45k which shld still give upper single digit / lower double digit DY as at today price.

pls note im heavy here and just doing a reality check of my expectations & not a buy or sell recomm

RabbiDoracle:
We need the patience of a crocodile !!!!

I heard it can wait for 2 years without eating. But bro, when meal comes, na gidigbo!!! Roforofo fight!!!

Then imagine (FPI), Omo this one Na elephant in croc territory.

Na die put!

.

i just love this forum during the bull

wise nuggets wrapped in comic relief

lol

Deadlytruth:
One would ordinarily expect Zenith to have been dragging the N41-43 range with GTB going by comparative size but here is a quite convincing explanation to the contrary.
https://nairametrics.com/why-gtb-did-better-than-zenith-in-2016/

Thank you

Deadlytruth:
I saw one online analysis on Zenith and going by it Zenith may remain a laggard for quite long.

hello chief

wld appr8 if u share this analysis or point to the source

thank you

RabbiDoracle:
Is Q3 2017 out IMO they will want press the reset button in their YE result and a vortex follows.

Morning Chief

wld appr8 if u shed light on what u meant by bolded

thank you

yok:
CURRENTPRCE IS VERY GOOD/MY OPENION ON FBNH

We are missing the service of the correct man Current Price. I just saw his post where he commented that Oil will go above USD60 yesterday and today today Oil is above USD65.


The Guy is good. We should avoid annoying people like this in the forum.

FBNH is good for now. The rate it is moving towards the closest resistance line is fantastic and may cross over to NGN11.00. With its recent addition to MSCI, getting to NGN11.00 within the next few days should be no big deal. The fund as at yesterday had over NGN1.2 Billion available for NSE stock of which I am sure FBNH will attract some.


Caution: Investing is a risky venture. This is just my opinion and I cannot be liable for any loss suffered as a result of following this recommendation All data used are assumed to be correct, but you may need to verify some of the figures independently.

Hello Chief

kindly furnish us the recent / daily addition as usual

or better point toward the source

Thank you

yok:
MARKET COMMENT/WHAT MSCI BOUGHT BETWEEN 7 AND 8 DECEMBER- FIDELITY AS USUAL, ACCESS, TRANSCORP, OANDO ETC



MSCI added Dangsugar, Fidelity, OANDO, Transcorp etc between 7 and 8th December 2017.

The NSE All share index is close to a supply zone, which may be fairly difficult to climb. However, if the All share index closes above 41,769.70 then we know the bulls are in the market fully.

For stocks like Transcorp, MSCI stepping into the scene may be a game changer. The equity has been ranging for sometime. Probably now more investors may note the potential that will be offered by the energy sector.

A stock like FBN is in good buying Zone. The Banking sector is second to the Consumer Goods in terms of market strength for the week that has just ended. Another banking stock looking very tempting is Jaiz Bank. The problem is that it is a weak stock. But the current price level offers a fairly low risk entry.

If you want the full list of the excel sheets for the MSCI additions worling sheet/website link you can send me a mail.

Caution: Investing is a risky venture. This is just my opinion and I cannot be liable for any loss suffered as a result of following this recommendation All data used are assumed to be correct, but you may need to verify some of the figures independently.

Thanks chief really appreciate this
@all. is MSCI seeing something in Oando we are not seeing, with the addition of 2m units in this period of great uncertainty about the coy? or could it just be a case of mere speculating with a negligible portion of their portfolio (cos 2m unit at N12m is quite insignificant to the portfolio size).

wld appr8 perspectives