₦airaland Forum

RoughCut:
The only stocks in my long-term portfolio are banking stocks and everything else is in the trading portfolio short-term from 0-3 months and everything else in between to borrow FO2 catch-phrase good for CICO or RO-RO. Come to think of it ACCESS might have to go in the trading portfolio now as things now stand and UBN don't see an upside there anymore!

ha ha ha.

No cement company, no conglomerate, no petroleum marketing? na wa OOOOOO That's too much exposure to a particular sector long time.

I still have stocks in the Conglomerate, Food, cement and Petroleum marketing. However, I am hadrly in love with any (apart from FBN and GTB). For teh others, once you are considered OVER value, na strigh away SELL instruction. If you like hit moon after that, na your own be that. Must always lock in profit nad rebalance my portfolio.

pumping777:
Aluminiun Extrusion? I was chasing it since it's las interim result becasue of the good potentials but it is too scarce. It has not even sold done up to 200K units this year!!

na small small, 10k today, 5k tomorrow. Note that most of the shareholders cannot even locate their certificates. Some rats don chop am. So it is not easy. If you enter eraly and stay long enough, na X 10 be those kind of stocks.

windywendy:
You don come again o   . Aluminium Extrusion, forget! No volume! NCR, I tried getting about 2 or 3 months ago when I heard about the deal with UBA and some other big banks for the deployment of ATMs. No show. Not even 1 unit could my dear broker obtain. Thomas Wyatt? yeah right! Tried that also when I learned that they were restructuring and doing a rights issue. No show there either. Don't bother with Greif (vanleer), been there, no show   .

Anything on the insurance or bank side?

big time brokers no dey get those kind of shares to BUY. na hustlers dey buy am. So if you dey use the psychadelic brokers, no show. Get someone wey go dey hustle for floor ringing bell for the stock. Some PP's were done like that. Guinea insurance was one. universe Re was another. Even the issuing houses no go get name.

RoughCut:
I'm sure FO2 don clear NCR commot for ground i remember him mentioning it a while ago! As for Thomas Wyatt anybody wey  get please give us a shout.

Deap capital i chase am so tey no show so wetin person go do now?

You msut look forsuch stocks when everybody dey avoid am!!!! That's why it is for long term. Once you however get in, na enjoyment you dey.

pumping777:
@wanajo

Ha. You just touched on my point. I am not "complaining" that the banking stocks are losing value. I am just looking at it that it may not be the right time to dive deeper into the sector pending when the sentiments change. So if the price of the banking stocks will be this way until the next batch of results I want to put my money to work elsewhere.

My trading portfolio has very limited banking stocks. Despite the volumes and capitalization, I have realized that I don't get significant gains from banking stocks short term.

In my little experiece so far, my non-banking stocks have consistently outperformed banking stocks in the short term. Yes, my long term portfolio has about 40% banking stocks but that is a different kettle of fish.

that's the problem with timing the market. You cannot!!!

Now when you talk of short term, it also depend on your starting point. That's what people miss when they do analysis. They all don't have the same cycle (that will change with uniform end year and it will make the market dull because peaks and troughs will occur at the same time and no more CICO).

Apart from banking stocks, many few sectors have the amount of units to amke you a 'billionaire'. That's why people get stuck with the banking stocks. If you are trading with small funds, you can be doing the otehr sectors but for the big tickets, na banking. just stay in and cool temper. you go enjoy later.

RoughCut:
That would be fine if they are not going to be issuing  bonuses left right and center. Look at Nestle it has a high nominal price but i can't remember the last time they issued a bonus and it is a good quality stock any day steady growth with no unnecessary stock dilution which adds value to the stock and shareholding.

The penchant for issuing  'bonus' with a view to artificially inflating  the share price is the problem i have with all these coys

Nestle issued bonus for year end Dec 2002 and Dec 2006. 1 for 4 in both instances.

They normally do it partly to correct the price. Due to sentiments and emotions, it is easier for a 1.00 stock to gain 5% than for a N200.00 stock. You know peoples perception is that a N200.00 stock is more expensive than a N10.00stock especially when we are in the same sector. Imagine First Bank @ N40.00 and Unity Bank @ N100.00 due to share reconstruction. What do you think will happen to Unity bank shares. That's why I love Soludo's plan to knock of some zeros from the naira. That way, things 'look' cheap all over again.

windywendy:
Ah, you come yab me finish and you still no give me any recommendation abi? Anyway, God dey.

Not looked at the market closely so was not focussing on those little little stocks. You can however check Aluminium Extrusion. But if everyone on Nairaland placed an order, too bad!!! Today na only two deals of 4,750 units were done.

NCR don commot for ground so I no dey track that one again. I look for small companies whose products are in high demand or being turned around.

If you can get Thomas Wyatt also, na money be that!!!

pumping777:
Insurance is neutral. Ups and downs evenly spread. There are even 5% gains.

These bank stocks are slowly but steadily losing value. The interest in the sector is just not holding despite all the "good" results we have seen so far.

Losing value ke? The year is still young. Capital market investing na long term. No be everyday be Christmas. So wait. na like that the market be. No be everyday we go dey see 5% jump. Sometimes the bleeding may last all through the first quarter.

Alaredy even using forward PE's, most of the bank shares are fairly or over valued. So a correction must of neccessity take place pending when they bring more result. For most, the forthcoming result is already factored into the price. So, the so called jumbo returns people are expecting from teh banking sector may take some time.

RoughCut:
For most peeps on the NSE banking stocks will be about[b] ~30-40%[/b] of their portfolio so i suppose this is inevitable

More like 50% to 60%. If you are an ethical investor, it may even be higher. The banking sector is the most liquid and most capitalised hence the skew towards that sector. That's where portfolio balancing and diversification comes in. Sometimes I am 'forced' to sell some stocks to maintain the balance. it takes discipline but it is necessary.

windywendy:
Really?? Na for one newspaper I read this one o. They say a rights of 1:1 was approved in December during an AGM or something like that. So they were issuing additional shares of about 133m (effectively doubling the outstanding shares to about 266m) to existing holders. They may not have done it, but it sure looks like the shareholders have approved it.

By the way, when can we expect the next results? _{abi, we suppose benefit from your insider status na}  

The rights was in the news since May last year. I begged My Peace to evn give me One unit then I will qualify for the rights and apply for more than my entitlement she no gree. She just want to chop alone.

They've not done the rights. My concern is the date of qualification for the right. Well, me don fashie My Peace and her company. God dey!!!

windywendy:
@Wanaj0, you know say you be my brother abi? So take what I'm going to say in good humor.  

Your stock recommendations don dey vex me no be small. How you go dey constantly recommend stocks wey no get volume? Chellarams, Nigerian German, TRANEX, and nowBOC gases (which I tried in vain to get. Even 100k units, my broker no fit .  . .). Me no dey benefit from all these ones na. You get any other recommendations so? _{Abi you no wan make me too benefit from your vast knowledge?}  

Well, my strategy is so simple. I dedicate a percentage of my portfolio to such stocks and hold on till they peak.

Bought Chellarams @ N1.98 (only got about 70,000 units). Got a bonus of 1 for 1, Being getting 0.15 dividend. Now price is >14.00. Now for a 140k investment now worth over N1.5m in less than 3 years is good enough for me.

Same thing i do with BOC, started accumulating @ 2.50 last year. Waited for it to reach 14.00 and now want to tell them Thank you.

If you get the small volumes when they are small, and you hold it long enough there should be no wahala.

That's why I love good PP's. taht's the opportunity to get good shares at at cheap price and acquire large volumes.

Now, as I no be money BAG like you, the small volume is still good enough for me. I am not interseted in buying the whole company

RoughCut:
Oceanic is a prime candidate for a share reconstruction(reverse split) so i guess the rumour is filtering through and peeps are taking profit Intercontinental: news making the rounds that they may also be a candidate for share reconstruction that does not seem to impact the share price adversely but i can't confirm if this is true r not

Inter was the first to hint of share reconstruction. Not sure how that will help the share price going forward!!!

RoughCut:
Oceanic is a prime candidate for a share reconstruction(reverse split) so i guess the rumour is filtering through and peeps are taking profit Intercontinental: news making the rounds that they may also be a candidate for share reconstruction that does not seem to impact the share price adversely but i can't confirm if this is true r not

Inter was the first to hint of share reconstruction. Not sure how that will help the share price going forward!!!

pumping777:
For stocks that have not seen any recent prolonged bull run, I don't expect 5% drops. However, for stocks that appear fairly or even under-priced, drops of 2%-3% appear significant.

We can understand the situation with Oceanic but other stocks defy any logic as far as I can see. Only Unity, Intercontinental and IBTC made any gains today and only Intercontinental's gain was not marginal.

The losses also are marginal. same thing in teh other sectors like insurance. So no big deal. The market will stay flat or a little drop until the results starts to come to the market. BOC is the next online I think.

yodiyokun:
My people don't be in a hurry to attribute the blood letting to Tribune's article.

Remember, Fatheof2's theory about month end interest payments - Anyway those loading up UBA - this is a defiinitely good time to load up on it.

Can't see the bleeding. Apart from Platinum, no bank lost up to 3%.

UBA and Ocenaic are tantalizing right now.

Anyone on the UNTL flight?

BOC still dey sweet my belle but I dey disembark

pumping777:
@WASKY-WAJA

I read about your friend's situation and this is my own take. Let me just touch this on the surface because I am really pressed for time and I've got to run.

- The risk is very high because of the 6 months window. If the window is 1 year, I will be less critical.
- There is a debate as to wether N40M is a lot of money or not. I suspect that for this chap it is. For one thing, having to borrow it and also that this is considered a big opportunity for him.
- Paying the interest in advance suggests that your friend does not have a steady source of income external to the portfolio that can be used to meet up with the interest payments. Further buttresses the point that N40M is probably a lot of money to this chap.

All above is BTW. Let us look at the operations. You will have the money for 6 months, but you won't be able to trade for the entire 6 months. There will always be lead times and so maybe you can trade for about 5 months before you need to pay up the loan.

CICO will be very risky because it is not unusual for CICO to take as much as 3 months to hit your set target. This means some of your funds may not be able to complete 2 cycles before payback is due.

CICO with money that is not yours may not give you High BP but it may prevent you from staying in long enough to take your profit.

I will recommend you split the funds. Maybe about 25% CICO and medium term for the rest. The floor is bleeding right now. I think the opportunity is there to pick up some under-valued stocks and still beat the interest and brokerage fees.

What's the definition of medium term bearing in mind the 6months tenor?

RoughCut:
Chei! u too dey follow them carry rumour if na play stop am o!

I don't think the president or whoever will be that stupid though if in the unlikeliest event that it happens Nigeria's credit rating will nose-dive like a rocket out of control and what will happen to the stock market i don't even want to contemplate!

Useless report from Tribune. How do you deconsolidate? Even if they allow government to own shares in bank who will do business with government owned banks?

Secondly, era of Government being the main spender is gone. So the leverage is reduced.

Nothing stop any region from buying into any bank.

By the way, how do you decondolidate? By reducing the minimum capitalisation or what?

shigidi:
@ wanajo,
are you buying DSR now to exit at 50 naira, or are you buying it in anticipation of fy 08,
do you think its next full year esult will be fantastic.
also, y do u love first banks so much

One of the RULEs of investing is never to fall in LOVE with any stock.

as per DSR at 39.00, it is a kill. It did not trade that low today though. The fundamentals is good. If there is better gas supply next year, I expect them to operate above 75% capacity. There is also export potential even to Europe. Just read about the BUA sugar factory that is about being commissioned.

On First Bank, the potential is huge. They are undertaking serious branch expansion. In terms of SME's, they are one of the best. When they start to exit (like they did with V-Mobile) expect huge returns. Yes, they have huge outstanding shares. But with the N250bn raised, even if all they do is but Treasury bills or government bonds at 10% that is like N25bn profit every year. Add that to the N20bn 2007 profit that's like N45bn straight away. They will not achieve this in 2008 but going forward, they will.

I also see them exiting Celtel fully. They own shares in the subsidiary of CHAMS via First Funds. They are a well diversified banking institution. they have the best registrar. They also have good and visionary managament. What else do you wnat in a bank.

lawtycoon:
@Wanajo,
Tell me about Ecobank and Unity Bank,is it adviceable to buy both,
i don't know about P.E or else,i just like Naija bank.

I know dey move near those two banks. Yes you can speculate with them but me wheh I ant to chop toad, na the one with EGGS.

MyPeace:
Wanaj0 l know say u must pick me up

Why you dey call my name? Wetin I do?

weezy12:
Hello, i place a purchase order through my broker to buy Oceanic Bank for me and a day after, i received a text message from Trade Alert confirming to me that a buying activities take place on my CSCS account and stating other information.

The question i want to asked is this:

Now that i have received such text message, what document or receipt or certificate will i request from my brokers because i have heard before that after a buying order must have placed, one should contact his or her brokers for a particular document.

If you have the answer to my question, please help me out.

I wish everyone a Happy day ahead.

Obtain a contract document from your broker. Also obtain a monthly CSCS statement.

MyPeace:
@Windywindy

They have not done the Rights of 1:1, but about to. where u get info say them don do am?

Important thing is the qualification date for the rights and the price. If you buy now and you don't qualify for the rights what happen especially if they sell teh rights at ridiculously low price

aktopgun:
@wanajo

been loading uba from last week , hence my analysis that i posted a few days ago. nice one bros!

oceanic is another candidate as well from the looks of it.

Hope I go still get small to buy OOO

GBGHOSTBOY:
Thanks Wanjo for your responses. I’m a big fan of your post and I love your principles. I do long term. Can u advice me on any stock I can invest in? let say with 1million naira,I will love to split it into 5stocks. Is ikejahotel good to buy at that price?

Regarding the stock my broker recommended, I’m not buying that because I don’t know much about that company and I accept your advice.

Don't discontenance the advice of your broker. Just ask for his reasons. If he sounds convincing you should go and buy. For all you know, he might have inside information.

I have DSR and UBA on my radar for now. I am actually buying those 2 this week. I also some of the aluminium companies in view. However, volume is low and they are not liquid hence difficult to buy.

Just looking at the International Breweries allottment.

Only about 50,229 people applied.

Now, 8 people were alloted 1.2bn shares out of the 1.6bn with the core investor applying and getting allotted 50% of the shares on offer (805m shares). So while 8 people got 75% of the shares on offer, the remaining 50,221 with total application for 4.6bn shares were asked to share 400m shares which is less than 10%!!!!!

They intended crediting account straight into CSCS by February 12. I doubt whether UBA registrars can pull this off. Refund money will be paid back with interest.

Well, if you can't get in as a preferential investor, be careful of shelling big money OOOO!!!

Favour08:
Do you have approx. date for the listing? Thanks for your prompt reply.

No I don't!!!!

GBGHOSTBOY:
Good day Wanjo and other Gurus in the house ,thanks for the great work you guys are doing . Kindly help a brother.Which stock do u think will be good to buy now for a long term investment 7 to 12months and please what do you think about EQUITYASUR ,my broker advised me to buy it after I instructed him to buy AIICO for me and he said its hard to get .

Please help

Ask your broker what is the Unique Selling Point for Equity assuarnce. Why should you buy it?

Personally, I have enjoyed the insurance stocks now is the tiem to say THANK YOU. They all will be doing PO's followed by share reconstruction! These are companies whose profit is not up to N1bn

Favour08:
@wanaj0,

I'm disturbed about the upcoming listing of PO shares for Access. I have a lot and i'm aware a lot of people of loaded at around 25. The Q3 didn't move the price as expected and we all know what happened to Oceanic. How would you handle the situation.
How was service this morning. Hope you preached a very powerful sermon.

Thanks

If I am you, I will jump out now. At 22.00, those that bought the PO would have made over 50% hence nothing will stop them from exiting!!!! They have absorbed too many shares as far as I am concerned.

Wonders shall never end!!!!

Being looking out for Goldlink PP. Saw the allottment result today! 814m shares of N1.00 each (they will soon do a stock split before listing) @ N1.50 per shares were placed on offer and fully susbcribed.

The funny bit was that only 8 (yes applications were received (don't know how), and the eight applicants applied for only the 814m so the placement witnessed 100% subscription!!!!

Watch as the share get listed @ N1.50 (after stock split thus guranteeing 100%) and the price jerked up to N5.00 before an IPO!!! Na this kind of PP me I like. No be the jamboree type!

Soon, brokers will be recommending Goldlink! Where were they when the PP was taking place.

Please, anyone know anything about the offer for sale for Nigerdock? Lead Capital is probably handling this.

esco399:
Wanajo, in the post right above yours, i put this comment "I do have to add that there have been objective responses in some of the comments though, etc". My man, I was referring to your comments/responses, and I agree with most of it, some of which are arguble depending on the guys finances, but still doesn't discredit what you've pointed out. May exactly fit for him or any other silent reader, hence your responses are objective. Quoting recipe for disaster wasn't aimed at discrediting anything you said. Some of the other responses didn't do any of that. Keep up the good work man.

Nothing personal just trying to put things in perspective.

N40m sound big but like I posted, that is just 1m shares of First Bank out of over 19bn shares in issue.

For me, the key issues like I have higlighted is the tenor of the loan and the need to pay the interest upfront. I am also concerned as per the percentage of his portfolio that he might have pledged.

That said, i guess most people actually want him to succeed which was why they are offering him suggestions.

One thing that you should also know, when you collect a loan, your emotions take a greater part in your decisions. Similar to Forex trading, demo trading is so different from real life trading!

esco399:
@ Wasky-Waja's 40m loan issue,

Most people don't even know the guys "pocket" and are already proclaiming it a recipe for disaster, high blood pressure, psychiatric medication etc. Why should it be? If some are comfortable borrowing 1m, and the guy is capable of borrowing 40m (the equivalent risk of other peoples 1m to him) then I'm show he's not a joker and knows what he's doing, It's not anyone that the banks give 40m to , If you add up several peoples portfolios on this site (borrowed money portion), it will surpass 40m wouldn't it? , so all of them added together make a recipe for disaster? Plus the guy would probably diversify (I hope) making it seem like a few peoples folios being brought together. After all the only thing that counts is the percentage gain regardless of the size of the portfolio , Big money, Small money, all make the same % gain on the same stocks now. Wish responses would focus on that as opposed to the size of the portfolio. If na Dangote pikin come announce this dilema, the conversation for no take this angle

I guess you should read the whole discourse once again so that you can have a better understanding of the issue at stake.

The value of the loan is not the issue but the structure. A six month loan for the capital market (long term investment) is what is called a mismatch. This is what I termed a 'recipe for disaster' It has nothing to do with the value of the loan. And if the person that started the discourse is to be believed, the loan is now structured for 12 months. Not the best but far better than the 6month loan.

Secondly, you don't collect a loan and pay the interest upfront!!!!! that basically reduces the amount of 'loan' collected. that also has nothing to do with the amount. It is just a no no.

When you pledge 40% for the loan (N16m in this case), one need to know what percentage of the guys total portfolio is being pledged. If you notice I asked this question. That will indicate the amount of risk that the person is taking. If that 40% is like 90% of his total portfolio, then that is a risk too much to take. His whole portfolio can be wiped off so the question will be whether the risk is worth it.

FYI, I collected a loan to buy a 'useless' stock but it was structured in such a way that I pay only 5% deposit, interest and capital to be paid after 12 or 18months which ever I want. Interest rate was 18%. So compare that with a 6months loan. (don't ask how I arrange the loan OOO)

gonziiii:
@ all, My broker is pestering me to buy IBTC, i suspect maybe he is trying to off load some stocks, what do u guys think, plz let me know before I buy tomorrow, other suggestions are also welcome, i am thinking 3-6 months with at least 70% returns

Ask your broker why you should buy IBTC at current price? If he can get it for you at 20% discount then no problem.

For your information, IBTC asset management did not place a BUY on the share. It is actually a HOLD which to me is close to a SELL. Yes IBTC is a good bank but right now, not really facing the competition. Will definitely not BUY at current price.


[quote author=invisible! link=topic=31554.msg1892539#msg1892539 date=1201423041]Since, wanajo has not replied this one, let us presume he has gone to church, or to pray. His assistants can try to step into his biiig shoes! and answer for him.
Intercontinental is a consistent performer, a very ambitious bank with very good management. Buying it for the 6-9 months will make sense if you can confirm that they will be allowed to pay dividens and or bonus this February (as opposed to new banks closing date of December)

We better confirm what the true impact of banks uniform closure date will be in the short run or all of us will watch as our bank stocks lose serious value, it may bounce back in the Q3, in preparation for Q4 2008.[/quote]Will not BUY Inter at current price. With 19bn outstanding shares that is a good canditate for share reconstruction. If they do, where will the price be? N60.00 When you get to that point, it becomes difficult for the price to move up. That is what is affecting UBA. Most people will ask why UBA should be more expensive than First Bank? That's why the rpice is being pulled down.

If Inter makes the mistake of giving bonus, na wahala be that!!!

ACL:
@ Invisible.
                       hi, have been a silent reader 4 a long time.
what do u think 250k can buy in first quarter.have told my broker ikeja hotel since the money is too small 4 UBA OR GTB.Am changing my broker so its taqkin some time to get new acct opened,but hope its opened before end of the week so i can still get ikeja hotel below 7:00

thanks

If you are in it for the Long term, then go for UBA. If they can start the Angola branch, expect great opportunities from that area. Never liked UBA, but I like the returns that they give.

Surprises:
That is why anyone expecting 100% returns from any bank shares is not following the facts on ground. What drives price in NSE is BONUS not even dividend. See what mere rumour is doing to Japaul Oil. So with all these overbloated outstanding shares of banks, analysing minds already know that majority of them, apart from UBA and perhaps GTB and Diamond Bank, cannot give bonus this year or in the nearest future. So what is going to drive the prices?
As for insurance, there days are numbered with the upcoming POs they are planning to do. How can a can an insurance company that cannot make up to 400m a year be having shares outstanding of 5-10bn? And regarding them, not all is known. By the time the facts are down, you will be surprised that some petty insurance firms have jumbo outstanding shares than even some banks. First half of 2007 may not quite repeat itself, except fundamentals do no longer matter in the choice of shares in the capital market. Oasis? What have they recorded this year so far? NEM, just 333m PAT with outstanding shares that some calculators cannot carry Na look I de look. Una go come oooo. Well in insurance stocks na CICO, sometimes many times within a month. I still thank them for that opportunity sha

The truth is that on many occasions, the market defies logic so never say never.

While share reconstruction may look attractive, very few banks will likely go that route. major problem will be the HIGH share price that will result. if Inter does a reconstruction and the price is now N80.00 and First Bank stays does nothing and the price is N50.00, soon the price of Inter will be dragged down. The question will be why should Inter be more expensive than First Bank? That's the mentality of an average investor in Nigeria.

As per isnurance, people's expectation is so high that I wonder why the optimism. Just look at the EPS, growth rate and the over bloated outstanding shares and you can see that there is going to be Wahala. A single claim can wipe out the whole profit of a company in that sector. Based on that, they are normally conservative with their dividend and even bonus. For me the BEST days are over for them. NEM after merging/acquiring Vigilante without reposrting the new shares is already into another acquisition of Lombard and they will still do a PO. This was a company that offered its rights in 2006 @ N0.55. Before this time, it has not paid any dividend for almost three years!!! Now the price is N4.00 and some brokers are asking people to buy. Where were those brokers when NEM was N0.55

Though margin is small in the Food and Beverages sector, that to me is where the value is right now.

Now as per Guiness, don't know much about it. However, it always take some time for the market to realise the value in some fairly valued or undervalued stocks. However, sooner or later, the market will see that. Check out Nigerian German when it was 4.00!!! Of course it was undervalued. Nothing has changed since then but look at teh price now. It did not take a massive leap. It is a gradual movement till it get to where it is now. Most stocks passes through that phase. I mean a phase when it is being ignored by investors. Same thing is hapepning to UBA and DSR now. Watch when they start there gradual but stable movement.

debenzd:
Hi Wanajo, what do you think is the implication of this on the price of Access?

Many thanks for your insight.

overbloated oustanding shares.

About 9.1bn shares to be added to the oustanding shares of Access Bank. Allottment already cleared by SEC.

[quote author=WASKY-WAJA link=topic=31554.msg1890778#msg1890778 date=1201359964]some companies in NSE have less than 1b share outstanding. 40m sure will make an impact. Wanaja don't forget if he suceeds and repay this loan, he can go for 100M and believe me, he only need to borrow twice and stops using banks money. first bank alone, and DSR and FCMB and can give 50% to 70 in 6 months. Wanajo i like your way of reasoning, i have learnt a lot from you, thank you,[/quote]If you know this for sure, please send me the next lottery number.

This time last year, WAPCO was to give 1 for 1 bonus that will give 100% return in six months. My friend used his margin facility to buy WAPCO @ 75.00 with the assumption that it is just rising. Don't forget, this same guy made a kill with BCC by buying 1m units of the the rights @ 6.50 (traded rights on the floor), Well, you know the story of WAPCO.

In a BULLISH environment, people tend to assume that prices ALWAYS go up!!! Sorry, it is not always like that.

Anyway, enjoy the loan and the returns.

Companies with small units of shares (like NESTLE) are quite pricey! Others in that category don't even have the units to sell. Use the N40m to buy Chellarams and see whether you will buy anything.

[quote author=WASKY-WAJA link=topic=31554.msg1890716#msg1890716 date=1201358965]as it is after haven taken care of interest upfront , the 40M (cash)is now at his disposal to use as he wants. with this type of money he can create scarsity wich can drive price up! stock business is a game of volume! with good CICO he can make 70% in 6 months[/quote]N40m is nothing on the NSE!!! That will buy you only 1m units of DSR out of the 10bn listed or 3bn available for trading.

N40m will buy you less than 1m of First Bank out of the over 17bn units listed!!!!

So, N40m is not that BIG and you will be surprised at how much some people are use to trade daily.

N40m will not move the market!

[quote author=WASKY-WAJA link=topic=31554.msg1890679#msg1890679 date=1201358359]wanajo thanks again! invisible ,NBA,aktopkun , million thanks to u guys,

first the 21% interest for 180 days (6 months) is N4,142,465 as calculated by the bank and not 8m. He used certificates(representing 40% of the 40m) in securing the loan. his house is not attached. Normally the interest is payable every month. If most pay interest every month, it means he will be under pressure every month! so he decided to take care of the interest upfront, ! not good when u are thinking about interest repayment in this type of loan every month. This is not like mortgage monthly repayment, this is different.

Wanajo i have taken note of your DSR hint but. skye bank will be bought on the floor also Zenith bank and costain immediately the technical suspension is lifted he never intended to buy any PO.[/quote]No wahala.

My calculation was based on the 1 year scenario.

Well, instead of paying the N4m at once, I would rather keep that amount in my broking account and mabe leave N1m at any point in time to handle the interest payment. Most likely, he will always have some idle fund in the trading account anyway!

As per buying after lifting of Technical suspension, not as easy as you think!!! Orders are difficult to execute at this time nad if he does not give a price limit, expect the broker to buy at the PEAK!!!

Now if the 40% is his TOTAL porfolio, then he is taking unnecessary risk!!! He is mortgaging all that he has. If the 40% pledged is liked max 40% of his portfolio then it is manageable.

That said, I have a close pal who has collected margin facility of over N60m. Quite an intesreting experience for him. He is fortunate in that he has a steady source of income (salary), he also has other good performing businesses. That allows him not to be under too much pressure.

aktopgun:
@wanajo

and it has been fairly valued for more than 6months.

the market continues to delay in valuing it at its right price. I am afraid this plan is dangerous and as u've said, a risk not worth taking

Depending on your time frame. I entered DSR at <33.00 around August/September, so you can see that it is inching up gradually. Performance (turnover) not wonderful but I expect the PAT target to be met. Add that to the quarterly dividend. It should be able to do 30% in the next 3 months by which time the guy can move to another stock. Also, the gyrations on other stock is absent so not expecting a 'loss'.

In this type of situation, you cannot afford to diversify. You need to hit and hit big!!!!

abocana:
@wanajo, You keep mentioning DSR,maybe i will go and add more on my holdings there o o

Dangote Sugar appears fairly valued.