₦airaland Forum

In actual fact from the plethora of IPO/PO's on offer at the moment i would include in my list in order of preference

Bank PHP and or Diamond(Yet to see prospectus to make a definitive judgement but based on current from looking juicy)

FCMB and

the dark horse

WEMA(risky because not sure where the price will end up before they go on TS but will make a judgement when i see the prospectus but it has a lot of value!) May be not  advisable if you don't already own the stock

Before the prospectus for FCMB was released the PO was done and dusted  but now having read between the lines not too sure now so the moral is READ BETWEEN THE LINES and the proverbial small prints

frankiriri:
Oceanic is still sound. I think the market is just reacting to their decision to absorb N175b. In the short term this may depress earnings . But I still believe that bank's management is focused enough to deliver superior returns on the amounts raised.

Since you are now an insider in Zenith and a long-standing N'lander(congrats by the way) can i ask if you know in what  the proportion to existing shareholding the rights issue will be offered

frankiriri:
Oceanic is still sound. I think the market is just reacting to their decision to absorb N175b. In the short term this may depress earnings . But I still believe that bank's management is focused enough to deliver superior returns on the amounts raised.

I'm with you on that one bro so no shaking i dey kampe!

wanaj0:
Over subscription means more money for them to generate more profit. Good thing about the FCMB offer is that the proceeds will be utilised in such a way to reap benefits within 12 months. They are not going for all that opening of new branches nonsense that will take average of 3 years to make profit. That's why I tend to see the ambitious profit forcast as being achievable. The interim result already hint towards that.

I wish i could share your enthusiasm the Q1 result for FCMB is N2.7B so don't think anything spectacular will happen before March next year  to push full year  PAT to N15B at best i'm expecting about N11B which makes a nonsense of the projections in the prospectus and even  with this oversubscription not doing it for me.

nigeriansecurities.com(one of the most accurate) also thinks their PAT at year end will be about N10B which i think is very reasonable. I agree with you though about how they are deploying the funds raised(brings a breath of fresh air to the usual branch network expansion nonsense) and they are expending quite a large chunk of their capital in the mortgage business in fact they expect a sizeable chunk of their income to come from the  mortgage /lending space  in the next couple of years which is the  next big thing as far  naija is concerned

I dont hink they would do N15B PAT for YÊnd 2008 based on current form!

jehosaphat:
One more thing,
Instead of buying 10 units a chicken+egg combo worth 80 bucks each ( 10x 80= 800), with potential to rise to 90 or even hundred bucks ( 20 x 10 =200), why not buy the eggs only worth 4 bucks each? Same 800 bucks gives you 200 units, then the potential to rise to maybe 8 bucks or 10 bucks gives you ( 200x6=1200). Isnt Bagco alone worth more in the long run than Flour Mills?
Pardon the parable of the poultry farmer,

chei! your parable reminds me of KFC chicken+chips combo in the UK. You will live to kill another one:-)

FCMB has decided they will capitalize any over-subscription for their current offer that means they will absorb any oversubscription

http://www.thisdayonline.com/nview.php?id=94398

Now all of a sudden the figures seem to have gone peer-shaped. According to the prospectus at the end of the current offer the shares outstanding will be in the region of 14B and there will be an additional 900M shares  listed in support of the $100M GDR component. Now if we assume they are allowed to capitalize 25% of the over-subscription(will be more according to the news) that is roughly an additional N1.125B and at the current offer price that would result in an additional 1.6B listed shares and the projected PAT in the prospectus is N15B (too agressive for me though from N5B in 2007) so i don't think i would even bother estimating the adjusted EPS and PE ratios so not looking rosy as it would first appear

Unless they are threatening to release a spectacular extra-ordinaire of a result like Oceanic is threatening to do the figures don't do it for  me so i  think i will be issuing a BUY order for Bank PHP and buy the PO at the same time( that is a N35 stock in the next 6 months!)  that way i can spread my bets and cash in on the post-suspension bull run and any future potential upside as a result of buying into the PO

kabirat:
@ roughcut,

Please i am still anovice in this stock market of a thing. I have some money to invest in some stock but i m a bit confused about it.

I would like you to help me with the kind of shares i can invest into either primary or secondary market.

Secondly, if i want to invest in blue chip companies, which can i invest on?

Thirdly, i would like to know the best time to buy stock from the secondary market.

I await your urgent response cause i don't want to spend the money i have with me on something that is not worthwhile.

Lest i forget, what do you think about Japaul Oil stock? Is it going to be worth the while if one invest into it?

Thank you for your anticipated response.

And dont forget to engage the services of a stocbroker who knows what he/she is doing!

Go through this thread https://www.nairaland.com/nigeria/topic-79353.96.html

steeviee:
@ Roughcut

i would like to send u a mail. hw do i get your email add.

many thanks

I'm sure you can share your views on the forum and in addition to my contributions a lot of other peeps can chip in which i think is more beneficial as far as you are concerned so fire on!

kabirat:
@ roughcut,

Please i am still anovice in this stock market of a thing. I have some money to invest in some stock but i m a bit confused about it.

I would like you to help me with the kind of shares i can invest into either primary or secondary market.

Secondly, if i want to invest in blue chip companies, which can i invest on?

Thirdly, i would like to know the best time to buy stock from the secondary market.

I await your urgent response cause i don't want to spend the money i have with me on something that is not worthwhile.

Lest i forget, what do you think about Japaul Oil stock? Is it going to be worth the while if one invest into it?

Thank you for your anticipated response.

I'm not sure there's anything like the best time to invest in the stock market. During the bear period(when share prices tend to be generally depressed) some think it's a terrible period to buy stocks but then others see it as a period to pick up bargains especially the fundamentally sound stocks
Buying on the secondary or primary market depends on your investment objectives in terms of timeframe either short-term or mid to long-term. normally if you are investing for the short-term (6-12 months) you wont necessarily buy on the primary market because it takes about 6 months to get your share certificate and you cant do anything with the stock if you dont have the certificate. Although with the new regulations the timeframe i think will be cut down to roughly 2 months.

If you are buying on the secondary market for a stock that is being offered on the primary market through IPO/PO it's usually better to wait till when the technical suspension(î.e when the stock  price freeze has been lifted usually after the close of the public offer) then wait a few  weeks and hopefully the share price climbs steadily and before those who bought into the public offer get their certificates  you can sell for a profit which is why some people dont like the idea of buying on the primary market because nothing can happen until you receive your certificate by which time the price rise may have stalled as a lot of people with their certificates will now like to sell for a profit(because there are many people trying to sell!)

On the other hand a lot of people buy on the primary market because the stocks are offered at a 'discount'(i.e offer price less than secondary market  price)
On Japual oil you may want to take advantage of the discount being offered and it's profitable according to the prospectus but i dont think you will realise  any appreciable returns in less than a year's time but then if you are new to investing in the stock market your time horizon should not be less than 12 months

If you read through the last 5 pages of this thread a lot has been said about very profitable stocks you can buy into so you should be able to come with a list and i can help you do some sort of screening to select 'candidate' stocks depend on how much you have to spend.

steeviee:
@ all

hello all its been a long time.

Could anyone help. i'm looking at puting some funds in stocks for long term say N1,500,000, but with
all these IPOs here and there i'm kind of confused.

i'll highly appreciate it if anyone can help me out here. selection with good fundamental analysis will be highly
considered.

PLS HELP A BROTHER

many thanks to you all

I'm sure by the time you read the last 5 pages of this thread or the sister thread  Stockmarket Tips for Nigerians you have at least 5 stocks on shortlist and you can whittle that down further depending on how much you want to invest the level of your exposure to individual stocks you are comfortable with

Please read about Costain and the business model they are adopting to diversify their revenue base   http://www.proshareng.com/myproshare/portal_news.php?id=3135

MyPeace:
thank you. l want to share the money l have between fcmb and bank phb for now. l don't hv zenith shares and wont be buying the po.

If you dont have Zenith bank shares already you probably dont need to bother dont think there's a lot of room for a tangible upward movement(except you have the shares already and therefore can take advantage of the post-suspension bull run)

jehosaphat:
@ all,
I need more info on ABBEY BUILDING SOCIETY. is it true that they are coming into the market soon? What is Mutual Benefit's connection to them, and how profitable is this Abbey venture?. Lastly, more info required on Chams, how profitable are they and when is their pp kicking off?

Thanks,

PS. Any other juicy hidden opportunities that any one else knows would be highly appreciated.

_{If you show me how to fesh water from the well i no go hask you for cup of water heveryday,}

Abbey building is planning to be listed on the NSE in November it did private placement where their share capital was increased to N1B i believe and Mutual Benefits are taking up a 20% stake in the company and a couple of offshore investors have been lined up to aqcuire a slice of the action as well.

They are planning to increase the share capital to about N20B through a combination of public offers debt and equity capital injection.

I suppose this is a strategic alliance between Mutual benfits and Abbey building society if you take into consideration that you need life insurance before you can take up a mortgage so the next growth area might conceiveably be in mortgage after Insurance for 2008. Incidentally in the FCMB offer prospectus they are hoping to grow the mortgage portfolio/business substantially and they hope mortgages will be contributing a very large chunk to the bottomline

MyPeace:
Roughcut,

please do u know exactly when Bank PHB is coming to the market??

thx

Not sure but i reckon in the next couple of weeks. Also there's talk of Zenith Rights/public offer coming to the market(the shares are on TS) in a couple of weeks(according to Frankriri who works for the bank now) if this is the case and you already hold Zenith bank shares you may have to look again at your strategy for choosing the stock you want to invest in. If you hold Zenith bank shares the conventional wisdom is to take up your rights issue and sell your original holding when the TS is lifted at a profit before the share certs  are released for the împending offer thereby using your profit to fund the acqusition of the rights issue and you still have Zenith bank shares which i think is a smart move.

The permutation i have described above will not apply to you if you don't hold Zenith shares or you don't have enough resources to buy into bank PHB as well as Zenith and it's not helped by the fact that  Costain(one of the hotshots on the NSE right now) will be coming to the market around this timeframe and WEMA will soon be showing their hands

So i suppose you have a lot to ruminate on

aktopgun:
GURUS AND ALL THE GUYS IN THE HOUSE

BEEN LOOKING AT CUTIX

I KNOW, You ALL PROBABLY SAID, WHO?
CUTIX !!
IT REALLY LOOKS INTERESTING ON THE FACE OF IT AND EARNING ARE GOING UP
ANYONE GOT ANY MORE INFO OR IDEAS
WOULD LIKE TO KNOW WHAT You ALL THINK

Yaa i remember talking about this stock on this or the other thread a while i think in my estimation its a bit late now to enter the fray i think the share price jumped from  N5 to N23 between May and now so not sure if there's any more room to manoeuvre  see this------>[url]https://www.nairaland.com/nigeria?topic=52566.msg1578447#msg1578447
[/url]

[quote author=Mr. Cee link=topic=31554.msg1643614#msg1643614 date=1194019644]@ EASIMONI

Thanks a lot but at the price 8 Naira (FIDELITY) don't you think it might be kind of good to gamble with caution? what do you think?[/quote]The discount can be deceptive sometimes remember we are talking share dilution here and if a company cannot grow PAT more than the proportion at which the shares are diluted then you find you are not getting anything tangibe in return for your outlay for a long time. It doesnt really matter if you buy a stock at N8 or another N100 the issue is the earnings potential and how long will it take you to recoup your initial investment plus profit or yield and how much is the yield so that's why it's always a good idea to do some number crunching to give you an idea of how much you will be getting in return and how long before you start realising gains.

pumping777:
Frankly I can make a final decision without seeing the prospectus for these offers but based on what I know now I will have these candidates.

1. Costain
2. Bank PHB or Zenith

In actual fact you have read my mind refer to the analysis i did a while for these two stocks  for Bank PHP ---->https://www.nairaland.com/nigeria?topic=52566.msg1619655#msg1619655 and

for Costain--->https://www.nairaland.com/nigeria?topic=52566.msg1552345#msg1552345

In actual after Flour Mills Costain has probably the best fundamentals going forward so there goes your answer

yodiyokun:
I am worried about the size of the offer, but I do not expect them to go on technical suspension just yet, they need to rebuild investors confidence. I was actually expecting them to release 6 months result not just Q1 only.

Well I missed the boat when it was N5 . It has been hovering between N9-11 for months now.

I think the risk is now reduced based on the release of their result, they can only do better, I am just wary of the dilution from PO.

I will place an order against tomorrow just to buy chicken change units. Let see what happens in the next 1-2 weeks.

Haba! you no dey satisfied with 1Q result of N2.9B that is more than the FY PAT for Sterling and Skye banks combined

pumping777:
Based on Q1 result Wema is definitely cheap.

if we bring in the mix of the PO could be a different story only if the stock goes on TS in the next few days.

But the real question is if you think Wema has already applied to go to the market, ? I believe the PO is possible again till at least January next year so they may not apply so early. If not, I don't see the price staying at 11 Naira.

If this stock does not go on TS, the price rise will be such that the offer from the PO may still be over 11 Naira.

Talking strategy i cant fault thtose guys at WEMA they 'tested' the waters with the release of the not so favourable  FY 2007 results and then decided to release the 'expected' results before the share price sustains mortal damage that is in my book a stroke of ingenuity

They wouldnt want to approach the market too soon for the simple fact that all these IPO/PO's are swirling round and they dare not go head-head with the big boys so i'm looking at early next year and  they would like to  milk the feel-good factor  now they are on course for a record performance and drive up the price as high as they could  and then give us a 'discount' for the public offer.

I think i'm going on BUYING spree the price has only got one way to go and that is up

hispy99:
Someone needs to be flogged at WEMA, preferably the MD. It is either they are just plain stupid or someone intended to drive down the price (by releasing the bad FYE 2005 & 2006 results) in order to buy the stock cheap and then reap profits once the interim results are released. Why on earth did they not release this interim result with the audited accounts?

Anyway, for those of you folks that did not sell (Tmoni and co), get ready for the ride to the top

Yeah the top is the logical way to go the bottom is getting crowded!

With a forward EPS of 1.14-1.16 is among the highest in the sector

wanaj0:
Just keep your eyes open. They may go on Technical suspension soon.

I think that's what they are psyching us up for i wont be caught out again!

wanaj0:
You have money from margin facility and a lot of FDI. Most of the new offers are being taken up by foreign investors. Retail investors are not the one causing the oversubricption.

BAGCO super sack seems to be set for an IPO. Good for them but not so good for Flour Mills. BAGCO may actually be more profitable than Flour Mills. Price is 3.90. About 1.9B shares to be on sale. That should be one to watch out for.

Diamond seems to prefer a GDR instead of a PO. ACTIS just invested some funds there anyway.

Wrong move for Diamond bank GDR is not the most attractive investment at the moment with the dollar at an all-time low. GTB floated a GDR many many months ago and apart from the fact those who bought the opening  GDR were short-changed they actually paid higher than those who bought when it was eventually floated on the London stock exchange and it hasnt helped the share price either  still almost at the same level now  as it was then!

easimoni:
Wema gained 5% today! And the poster meant the 1Q was 2.9B while the same period last year was 1.7B. Means the forward EPS is N1.14k. Still waiting for independent confirmation (other than today's 5%) . If it's true, cloud 9!

cheers easimoni and i'm actually in space high above cloud 9.-)

wanaj0:
Went on technical suspension today so no show for you!!

Yes you are right but there are ways around these things. I will take up my rights and just have to wait it out till when it comes off TS and cash in on the post-suspension bull run even works out better just need to have the patience of a vulture.

I would have used the proceeds from the anticipated profit_{not counting my chickens before they are hatched honestly just staying ahead of the game} to finance the take-up of my rights issue

I must admit they caught me off-guard though

[quote author=Mr. Risky link=topic=31554.msg1638969#msg1638969 date=1193917032]Company results:

Wema 2.9bn - 1.7bn First Quarter June 30th
First Bank 15.04bn - 10.23bn Half Year Result
IBTC 4.51bn - 3.27bn


ARE YOU STILL IN A HURRY TO SELL YOUR WEMA?

Zenith coming offer:

Rights N36.90
Offer N38.90[/quote]Forward EPS 70k and wait for it PE Ratio =13.8 which is well below the sector average.

WEMA has pulled the rabbit out of the bag which sets them up nicely for the PO/IPO(not sure which one is it now)

walcolm:
@roughcut

there's nothing like share buy backk with the aim of manipulating price. the very concept of share buy back does not allow for that. if a company buys back it shares, those shares are cancelled. once that happens, whatever effect it has on the shareprice is totally legal and allowed under the laws of any country

if a company buys it owns shares to keep somewhere using any brokerage or investment firm in which the company has interest, that is not share buyback and that is illegal. i.e company A owns significant interest in company B and company B now buys huge chunk of company A shares, that is manipulation and it is illegal

if it is found out (it is easy to find it out), the board of Company A goes to Jail

You have got the wrong end of the stick and i dont think any purpose will be served by flogging the issue so let's talk about WEMA a lot is riding on this one:-)

[quote author=Mr. Risky link=topic=31554.msg1638969#msg1638969 date=1193917032]Company results:

Wema 2.9bn - 1.7bn First Quarter June 30th
First Bank 15.04bn - 10.23bn Half Year Result
IBTC 4.51bn - 3.27bn


ARE YOU STILL IN A HURRY TO SELL YOUR WEMA?

Zenith coming offer:

Rights N36.90
Offer N38.90[/quote]Is this a master stroke or stroke of stupidity? Well  methinks it's a master stroke just within days of each other they are on course to do PAT ~N7B at year end!
WEMA is now officially the come-back kid they are definitely bringing the baton home!

God bless you bro for sharing this with us

wanaj0:
Share buy back is not illegal. In the strict sense of the word, when you do a share buy back, you reduce the number of oustanding shares. In the case that we are talking about, the outstanding shares is not reduced in anyway. In share buy back, you basically cancel such shares. This is not the case here. What you have is share being mopped up by a market maker etc.

Share buy-back with the aim of manipulating share prices which is the case in this context is what i'm referring to and the point i tried to make is that it's illegal anywhere not only in Nigeria.

Of course companies are allowed to buy back their shares through an investment vehicle(indirect share holding) or directly from the shareholders which is what i said earlier with the aim of  reducing the share holding(reducing number of listed shares)  if they are awash with cash(and may be don't know what to do with it and/or if they don't want to  return cash to shareholders  via dividends) and  to increase shareholder value

Thanks for putting this into context

easimoni:
Nice one, Nice one! They caught me off-guard. Only N150B over 4B new shares? After the shareholders approved 5B new shares? 5 divided by 4 is 125%. They already made provision for the 25% oversubscription they are allowed to absorb without wahala. They are indeed the masters!

That's the way to do it!

So i guess it's time to cash out when the share price is smelling N50 or higher and then re-enter by taking up my rights issue
Thanks to Jim Ovia and his strategists

wanaj0:
Share buy back is not allowed in Nigeria. However, the companies can buy their own shares via their asset management companies, Pension fund companies etc. So it will not be a share buy back in the strict technical sense.

Which is exactly what i said by implying that they would have to use some sort of investment vehicles in which the company will be the major shareholder. Share buy back without using a conduit is illegal anywhere!

Someone mentioned earlier on the other thread that Zenith bank is the master in managing the dynamics of share prices and investor expectations. Click http://www.proshareng.com/myproshare/portal_news.php?id=3122

The shares have been placed on technical suspension in anticipation of raising a total of N150B from the capital market via rights and public issues just a day after releasing impressive 1st quarter results(WEMA bank will need to learn a few lessons here from the master_{it's the dreaded WEMA again}

aktopgun:
ROUGHCUT COULD YOU OBLIGE ME AS You SAID WITH THE INFO ON DIAMOND BANK PLS

Yeah will get some stats for you as soon as i lay my hands on them