₦airaland Forum

onegentleguy:
...Alright folks here's an even more pivotal notice from SEPLAT PETROLEUM;

http://www.nse.com.ng/Financial_NewsDocs/21003_SEPLAT_PETROLEUM_DEVELOPMENT_COMPANY_PLC_CORPORATE_ACTIONS_FEBRUARY_2018.pdf

US dollar denominated bonds. They are not selling in Nigeria

Anyone looking for dividends should better stay away

rebekah2011:
They rewarded themselves with 25m shares worth close to 17b. They increased their salaries too. 2 years without dividend is an issue BOSS

I think the shares was to employees as part of their employee value proposition.

They are just coming from loss positions. They did not earn any oil revenue for close to a year. They need to deleverage their balance sheet before thinking of paying dividend.

Only in Nigeria do you do a rights issue and go ahead to pay dividend.

mendes911:
Maybe na me wey no dey analyse well. Is the proposed dividend supposed to reflect here?

Well, Amazon no dey pay dividend as well.

Why do you want them to pay dividend? They are expanding now so need all the money. They are doing a gas project now in the Ohaoji (sp) axis. Also previous losses must have eaten into their retained earnings.

I think they have a conference call today or tomorrow. That's good corporate governance is my books.

Tolktob:
@bra wanajo,seems this has finally bottomed out .HMARKINS

Has it? They just did Rights Issue at 50kobo. They also do pay like 2kobo dividend. So I will be waiting at 20kobo to 25kobo to buy. The company is still in operation, releasing result as at when due and paying dividends. So what is the worst situation?

RabbiDoracle:
Let me explain. If I bought at N2.5, and the price is N4.7 now, I will need to sell (if I'm a short termer). Reason is because I'm comparing a gain of N2.20 with 40kob. So I will have to sell.

You will need to stop selling until the price of the stock gets to N2.5 + 40 kobo= N2.90. Because if you sell, you will gain only 40kobo which is still the same as waiting for the 40kobo dividend.

My point is that people will keep selling until equilibrium is reached and at that point, they have seen that selling for just 40 kobo gain is the same as waiting for 40kobo dividend.

But not everybody is a short termer so no shaking.

NEM finally reached the N2.00 mark.

RabbiDoracle:
Help and buy it

Planning too. The Rights Issue was successful which was good. Just waiting for it to bottom out!

This stock is getting punished unduely!

Consolidated Hallmark Insurance Assures Investors More Returns

https://www.thisdaylive.com/index.php/2018/02/26/consolidated-hallmark-insurance-assures-investors-more-returns/

CHI shareholders retain shares despite negative industry sentiment

https://punchng.com/chi-shareholders-retain-shares-despite-negative-industry-sentiment/

sellydion:
The formula for transactions in Oil and gas industry is 60% Dollar and 40% Naira.

That is the formula for CONTRACT as approved by NNPC. However, you can pay more than that. You only need to buy forex from CBN to pay!

Manonamission:
Keeping all other factors constant, shouldn't the landing cost reduce?

I would think a sort of Swap deal might be involved. Give him predetermined quantity of crude at prevailing rate per barrel in return for a predetermined quantity of refined products. A margin is agreed which leaves him with residual crude stock for his fertilizer, refined products etc that could be exported. He could go over and above the agreed quantity of crude for his export business as he deems fit though.

It doesn't really make sense buying dollars from govt to buy crude only for the same government to come and buy refined products with dollars. Abi no be so?

Crude swap can be done but it will be denominated in 'dollars' even if there is no exchange of cash.

Dangote has interest in some oil fields so supply is more or less secured. Transaction will still be done in dollars.

On landing cost, yes it should reduce BUT a lot has to do with pricing. The experience with cement should be a guide. Local production is yet to bring down the price of cement.!

awesomeJ:
Thanks for the enlightenment.
How low do you think APR can get before markdown? is 4.70 realistic? I'm thinking of swapping some FIDELITY for it. Entered late, and the wait on that bank is becoming too long.

Just your opinion. I'm not asking for a accurate prediction of price movement.

Sorry sir, I got no clue!!!!!

awesomeJ:
Even if he has no concerns for the nation's economic health, he will at least have to model his operations in such a way that we have an incentive getting our refined products from him.

One core fact is that his primary target market is Nigeria.

But from what I know about him, crude will be sourced competitively from the international market. The portion that comes from Nigeria will be purchased in Naira, others will be billed in USD.

Same goes for sales. Sales to the local market will be in the local currency. exports proceeds will be greenbacks.

Imagine dollar at 280 vs 360, his group revenues would have been about $5.4bn vs 4.2, and Forbes would have added close to $4bn to his networth.

I seriously doubt Naija will sell crude to anyone in Naira. Even NNPC does not get crude in Naira.

Dollar at N280 The state will not be able to pay salaries! Reduced Naira to meet Naira obligations.

Even IF he gets paid in Naira, CBN will convert straight to dollars. Same with the oil companies. When NNPC give them Naira, CBN convert it to dollars for them.

mendes911:
UCap was a spinoff from UBA. You need to know how much he bought his UBA shares.

Also his average price for NEM is below 50k but NEM never sold below 50k.

Wanaj0 patience on stocks is something else.

How you know say I get NEM? Had to sell down to re balance my portfolio. Can't afford NEM to be 20% of my portfolio

RabbiDoracle:
Buy crude in naira and sell your products in naira. They should not dollarize the economy.

Dangote will just turn his refinery to an export refinery He is not doing charity.

RabbiDoracle:
Then the problem still remains.

Depending on the problem we are trying to solve

If he sells in Naira, where will he get the DOLLARS to buy the Crude? Or will he buy Crude in Naira

I've heard people also claim that pump price of refined products will drop once the refinery is up and running. I wonder how that will happen

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

Dividend is not the main thing vexing people. 5% dividend yield is not common in this market. Most of the banks will have a dividend yield less than 5%!

Main problem is performance. Drop in revenue, increase in operating expenses and reduced profit. Those are RED flags on the future prospect of the company. Seems they had some extra ordinary income before though.

RabbiDoracle:
Where will the local market get the dollars from? From the same CBN that supported Aliko to build the refinery and the same CBN that wants to reduce FX pressure due to purchase of dollars for importing petroleum products?

Will they SELL crude to him in Naira! It will do them like film trick. Dangote is SHREWD business man.

RabbiDoracle:
Olodo.

He must have bought at a price and netted of his dividends from it until it got to that price.

I said AVERAGE holding cost. Remember that people got UCAP shares from the spin off from UBA. Anyway, I no get power to argue

I bought UCAP even though I don't like Tony and I tend to stay away from his 'companies'

emmanuelewumi:
Tony don start again, I remember about 4 years ago when his company was paid N100 by APR as fund management charges.

The fear of Tony is the beginning of wisdom. If I can, I avoid his companies

Coolcash1:
The earnings will be both in naira from local market and dollar from external market. There is commitment to meet domestic demand first and whatever remaining can be exported. There is no issue him opening filling station as the benefits outweigh the cost. In this case, since he has the feed-stock there will be economics of scale owning and operating such gas station translating to increased revenue and aligns with the horizontal integration strategy of the business.

He will SELL to the local market in DOLLARS! He will not RUN filling stations. Margins are TOO thin.

Refineries don't advertise. Oil producing companies don't look for customers. There ys a reason for that

Chibuking81:
The companies that declared their 2017 result so far, recorded loss when compared with 2016 final year, stocks like, Vita foam, Transhotel, Total, etc.
I begin to wonder, what will be the faith of some stocks yet to release their result. We witness recession in 2016, and recession left us in 2017, why those companies result during recession was better off, than when out of recession, even the oil companies was also affected, Total as a case study.

To properly analyse a company, you need to understand how it creates value. Total makes money by importing and selling petroleum products mainly!

As you are aware, only NNPC is importing so reduced turnover and profit.

Also, the greater part of Q4 2017 was filled with scarcity. So volumes sold by Total reduces hence lower turnover and profit!

Recession is not really the problem with companies like Total.

awesomeJ:
Well, I think regarding currency crisis, the worst is behind us.
I forecast a sub 300 dollar rate before the end of the coming year 2019 (Nafex/Parallel market), especially if the government of that time will also have a keen interest at strengthening the local currency. With a favourable price and output levels for oil, and all the prospective inflows from eurobonds, God will give us a 50-60bn reserves level before we end Q4'18.
When that happens, the CBN will be more comfortable with welcoming any such suggestion from the presidency as regards naira strengthening.

Alikote also mentioned that AD wants it at c.280 soon as his refinery commences operations next year, because he earns his bulk in naira and has huge dollar obligations. So his smart-thinking brain figures "the cheaper the dollar, the better"

We're hoping that before the end of next year, our petrol import bills will be replaced with petrol export receipt courtesy of Alhaji, God willing.

Government earn in dollars and spend in Naira. So a weak naira is to their advantage. Strengthening of the Naira will mean that they are not able to meet their local obligations (Salary).

Dangote will sell its petroleum products in DOLLARS. That is the currency of trade. He will get crude in dollars and sell refined products in dollars . That's why he will not make the mistake of opening a filling station

skimanski:
Area of Plot; 577 Sq.m
Area of Building; 198 Sq.m

Cost of Foundation to Plastering is N21m (High Quality PPR Piping for Mechanical Works, Hign Quality Gerald Roofing Sheets: Shingles)

Duration 2 to 3 Months

Cost of Full Finish can Vary on the Quality of finish and Source of Finish Materials (Locally Sourced or Imported)

Duration for Full Finish can be 4 to 5months as we must pay attention to details

I thought this will take maximum of 1year but now almost 2years. Any reason for the delay? Realistically, how long does it take to finish a building like this?

RabbiDoracle:
Brent keeps rising.... NSE keeps falling. Hope you see the negative correlation?

Habba! They are both trading sideways!

millo:
For those who trade stock, no problem as long as the initial /additional fund poured into stock is already taxed, remember that your share sale is already taxed. For those that import fund from abroad (like me), no problem as long as your source of fund is already taxed in your country of residence. However, if you are resident in Nigeria and your income is from abroad, then you need to explain or pay tax to Nigeria on the initial fund.

Exactly. If you 'import' capital, be ready to show Capital Importation certificate

emmanuelewumi:
That is why I said it will create jobs for lawyers and accountants that specialise in tax matters.

Read " Ordinary people extraordinary wealth" and see firefighters with asset of $10 million at retirement, the school bus driver with $4 million or the cleaner in an Ivy league University who willed her almost $20 million mutual funds to the University and an endowment fund was established in her honour.

Why will it create jobs for lawyers and accountants? It is a Voluntary declaration. You should have evidence of your source of wealth. Even if na juju you use, state it there.

OBAGADAFFI:
https://brandspurng.com/okomu-nigeria-sees-subdued-2018-for-palm-oil-on-market-woes/

Okomu Oil Palm Plc, Nigeria’s second-largest producer of palm oil, expects its sales will probably slow for the rest of the year due to a supply glut and weak consumer demand.

Are we expecting something negative from Okomu this year.

Most likely trying to put pressure on Government not to grant waivers for importation of CPO.

That said, no major headwinds for them. Learnt that Sime Darby and Olam are planning to start oil palm plantation also in Nigeria. That will improve competition. Always prefer Presco to Okomu though.

emmanuelewumi:
Not always the case, this will create jobs for Tax accountants and Tax lawyers.
It is legally possible that a worker currently earned N2 million per annum, but his investment portfolio is over N25 million.
The Tax accountant or lawyer employed by the worker will legally prove it to the Tax officials.

That is why you need to show how you get the N25million from N2million per annum. No one has said anything is impossible. Just go ahead and show the appropriate documentation.

RabbiDoracle:
But the form has a part to declare your investment (stocks, bonds, etc)....this is section 3

Section D says that you should state assets you have disposed..at the end you indicate if it is a gain/loss stating the value.

https://vaids.gov.ng

Download the form and see.

You don't pay Capital Gains tax on shares but you pay on property. That is the LAW.

The important part of the form is the question about how the acquisition of assets was financed. If it was from 'taxed income' then your previous tax payment will support it. If it is from 'untaxed income' then the tax man will come after you now. Very simple actually.

It is all about showing sources and application of funds.

emmanuelewumi:
J


What about the with holding tax of between 600k to 800k he must have paid on the dividends earned.

Issue is the tax paid on the income he used to acquire the Assets (stocks, property etc)? It is expected that your tax liability should be commensurate with your asset.

bigjay01:
i remember clearly his warning on Oando. However, my oga was also into Chams, Intenegins etc . Oga no be so?

I bought Chams PP. Sold not long after. It was obvious the management was not serious.

OandO was 'killed' by the 'promoters'. Unfortunately, upstream oil industry no be beans! See wetin happen to Afren. It takes a lot to monetise reserves. The cowboys at OandO do not have the interests of minority shareholders at heart.

C&I Leasing is another company that the management is not allowing to blossom!

Coolcash1:
He should not worry because there is no cause for alarm. Gain derived from sale of shares, stocks, treasury bills, bonds are NOT subject to capital gain tax. This is in line with s.30 (1) & (2) of Capital Gains Tax Act of 1967 as amended to date.

However, the tax on such investments is withholding tax which is charged on the interest or dividend received on the capital sum. This tax is also final i.e. No other form of tax can be levied on the income.

Hope this helps...

On the CONTRARY, he should be very worried.

YES there is no capital gains tax on the disposal of stocks in Nigeria.

However, VAIDS is about having tax payment commensurate with your income. He will need to show the tax paid on the income that he used to acquire the shares. Paying yearly tax of N15k and having shares of N100m? He will have some explanation to do.