₦airaland Forum

shigidi:
@ easimoni,
i recall you and wanajo have has some conversations on BETA GLASS. i never really took notice but from my calcs., it looks pretty solid , its half year PAT was 321million and its half year eps is 0.7. its full yeareps projected to be 1.4 or there abouts and should be 20 naira to say the least. am i correct in these calculations and what do u think about this stock ?

easimoni:
You are spot on and I did buy some upon wanaj0's recommendation. Sold it after it went on a run and it has since stabilized. The forward EPS is 1.4 but I don't know what PE the market will place on a BETA glass but 20 may be optimistic. The only downside is they made a lot less in the 2nd half of last year than in the 1st, what if that trend continues? Maybe 1.4 becomes 1.2

I think the slow down in profit in the secodn half of the year was because of there having to shutdown some of the furnaces in the plants.

For me, 20.00 is a fair value for BETA GLASS. Concerns basically has to do with the level of liquidity of the shares. Also there is the risk of the long term viability of the company especially if NAFDAC goes with the ban of bottling soft drinks in glass bottles!

Apart from that, BETA GLASS like Nigerian German are the gem for me. So far they've delivered.

Next on the block is Diamond Bank with the injection of Actis money.

pumping777:
Disastrous Results

LIVESTOCK FEEDS PLC

AUDITED ACCOUNTS FOR YEAR ENDED MARCH 31, 2007.

PERIOD 2007 2006 ABSOLUTE CHANGE %CHANGE
TURNOVER (N'm) 581.76 560.02 21.74 3.9%
PBT (N'm) 8.84 728.17 -719.33 -98.8%
TAXATION (N'm) 0.52 20.25 5.95 29.4%
PAT (N'm) 8.32 748.42 -740.10 -98.9%
EXCEP ITEMS (N'm) 28.66 709.00 -680.34 -96.0%

* Means Decrease & * Means Increase
Net Profit Margin 1.43% 133.64% -132.2%


NOTE
The auditors expressed some opinoin and stated some post balance sheet facts on the
"going concern" status of livestock feeds plc.

-----------------------
Decrease of 98.9% PAT Year on Year.

What exceptional items is this company making adjustments for? The adjustment of 709 Million from the previous fiscal year when the PAT was 748.42 is almost as high as the PAT. The company's PAT in 2006 was higher than the turnover!!! It will be interesting to see the corresponding balance sheet of this company.

Nothing special or out of place about the result of Livestock feeds. Problem is people don't look at the facts behind the figures.

Look at the 2006 result, profit was more than turnover. That shows that the profit dis not come from the normal business of the company. Most likely they sold a major asset. CAPL just did that. UACN being doing that. What people saw was increased in profitability hence Livestock out of the woods!!!!!!! It is the profit from such sales that it treated as an exceptional item. While there is nothing bad in doing that, I get worried when you are only making profit by asset stripping. How will you now make money when there is no more asset to use to generate the profit?

For 2007, trend continued. Another exceptional item. So they basically made a loss! but the N28m exceptional item (maybe profit from disposal of another asset) turned that to a profit.

Hope that clears the air!

RoughCut:
27M shares of WEMA were traded yesterday opening at N8.90 and closing on N9.34 net bid. The soap opera continues!

No go get heart attack with this your Wema OOO. Too me, it is quite a risky venture.

Tending to shift towards Diamond Bank now. It appears Actis will be injecting the funds now. That should affect their bottomline.

Time to cash out on IBTC. Grossly over valued stocks. Enough returns if you are not greedy.

WAPCO and Flour Mills looking good. May start with WAPCo and shift to Flour Mills in February next year.

Rumours of Zenith acquiring Equitorial Trust Bank. Not sure how true this is.

kg:
They were not in coma when they bought a comatose NITEL(yet it was not as comatose as people thought, the problem was bad decisions by bad mgt put in place by an ignorant govt. Yet in that state it still remains the only telecomms co. in naija that renders very important tel. services to the remaining telecomms companies, PTOs and GSM companies), if they knew they weren't competent they should have allowed other bidders who had experience in the telecoms sector to buy. With their zero experience in telecoms they still chose to "buy" or they thought it's hilton hotel where you boil water make garri and biz don start.

Come to think of it how is it possible that I piggy back other telecoms company successfully yet I'm so sick myself? It is only in naija that things like that happen.

Rather than transcorp to come in and work they are busy making so much noise in the papers claiming world class while the company loses billions (in the last one year of their NITEL takeover) that could have been avoided. Not only that they've not been able to pay salaries, owing staff several months of unpaid salaries while they make money from SAT3 and clean mouth!

If I start this transcorp discussion it won't end, I was never against privatization but I have a problem with selling to a zero telecomms experience company while the door was slammed against other buyers who were more competent. I knew transcorp was the company to takeover NITEL long before it was sold.

Your statement in bold does not reflect the events that led to the sale of NITEL to Transcorp.

Was it Transcorp that prevented IIL from paying up when they bidded for NITEL?

Was it Transcorp that prevented Pentascope from turning NITEL arround?

Was it Transcorp that prevented Orascom from submitting a bid above the reserved price?

You mean all the time that IIL won the bid for NITEL you already saw through the crystal ball that NITEL would be sold to Transcorp

Let's get real here. Transcorp was DESIROUS of NITEL that in my own estimate, they over paid.

Transcorp went for an IPO at the wrong time. They however had to do that to edge the political risk in view of the change in government.

Anyone expecting NITEL to be turned around in a year is elaving in dream land. Even the Transcorp prospectus showed that there will be no profit till 2009! That itself is ambitious.

Transcorp will still come good. However, they have the work cut out for them. They are already lagging behind in terms of expansion etc. But hope is not lost. They need to get the right people in place now that they ahve overcome the political risk.

tonyjon:
TO ALL GURUS IN THE HOUSE,

A friend of mine bought some shares (PO) some years back before he travelled out of the country. Since everybody is now talking about capital market, he now remembered that he has some certificates in his Bank safe deposit in Niger.

The problem with the certificates are so many that he is about losing hope as per scaling through with verification anytime he goes back to Niger.

These are the issues:

1. His surname has changed
2. His postal address has changed
3. He has new next of kin
4. His signature has changed although he can still sign his old signature
5. He has no broker and not willing to hire one

He intend to travel to Nigeria next month and go straight to the offices of all the registrars of the companies where he bought the shares to explain to them and to do his verification without a broker.

GURUS in the house, is this possible?. If the answer is yes, what are things he will need in terms of documents before going to see the registrars?.

Two things that he has to do

1) Get a sworn affidavit as per the change of name with the newspaper advert.
2) Get bank confirmation for his signatures
3) Get a broker FAST.
4) Submit change of address forms with the registrars (preferably through a broker)

X-2-X:
@ all

Kindly enlighten me about the difference between EPS (basic) and
EPS (adjusted) as seen on profit and loss accounts of some
companies.

Which is the correct to use for fundamentals analysis? Adjusted?

EPS (basic) is the EPS for that year based on the outstanding shares for that particular year

EPS (adjusted) is the EPS adjusted for increased in outstanding shares over the years. This is just to show that even though the EPS bsic of a company may have decreased year on year, when you look at the adjusted EPS (if the company has declared a bonus or make an offer) it may actually have increased year on year.

Allcorrect:
Hi easimoni, frankiriri,wanaj0 et al

Excellent an tremendous jobs u all are doing, infact this is the richest thread on stock issues, Everyone here is really doing greatly. Bin following the thread since SEUN repented.

Thinking of changing brokers now. My former acc officer has moved to Marina sec an he is asking me to ctransfer my acct, but the problem he forsees is that his former Md might not sign the transfer forms. The guy is simply good, does my trades and excutes orders real fast. Simple question is how long does it take to effect a transfer of stocks, Got like 800k in my cscs acct. What does the house think>.

Don't transfer your account. If you can, open another account with the new company!!!!!

pumping777:
I won't call it stupid so quickly. The plan is to cater for oversubscription if they go for 100B. In this case the maximum that can be raised is 125B. With the new plans even if they only get 150B this is more than they would have been able to raise. In this case, it will be undersubscribed but they are able to raise more.

I don't see a problem with the offer being underwritten up to 160B.

Platinum is already on TS and I don't see the guarantee the price will rise immediately after lifting the TS. In recent times, stocks are just not responding to this. Maybe maybe not. It's up to you, but I don't think an additional 100B added to the offer makes a difference right now. If the offer is undersubscribed it might affect investor sentiments but this won't be known till next year.

An offer that is 80% underwritten is not likely to have a problem. The underwritters are expected to cough out 80% of the offer if the 'public' refuse not to subscribe to it. That way, the underwritters will ahve to do a lot of marketting or else they will be left with 'bad shares'. Just ask IBTC. They are 'forced' to own Presco and First Aluminium shares just because of this.

Crusader acquired 4 companies. Shareholders of those companies will invariably be issued with Crusader shares thus increasing the oustanding shares of Crusader PLC. Right now, no one seems to have the merger document.

As per the Life and General Insurance companies, they are FULLY owned subsidiary of Crusader. They decided to split the parent company into two to comply with the insurance consolidation plans. In principle, it has no effect. Prior to this, most insurance companies present their accounts to reflect the Life and General insurance part of their business.

Like I have said many times, not knowing the issued shares of most insurance companies makes analysis difficult. There may just come up some major surprises that will change the fundamentals. So, thread with caution.

pumping777:
Yes, the warrant will expire but what I mean is that you will still be entitled to the dividend. Your right to the dividend does not expire with the expiration of the warrant.

Your right expires after a certain number of years. Not sure if it is 12 years again.

shigidi:
Online

Re: Stock Market Tips For Nigerians
« #3395 on: Yesterday at 10:56:11 PM »

--------------------------------------------------------------------------------
@ wanajo,
you said flour mills has the best fundamentals but what about costain? forecast epsof 2.9 for a 20 naira stock gives a forwardpe of 7(yes 7), thats almost too good to be true, i know they arew coming out with a po and rights that will dilute the earnings but what do you think about costain ?

2) also, you pointed out earlier that you feel longman has more value than university press, but why do you think so? longmans half year result shows growth of 27% while UPL shows 95%, the only sentiment i put to longman is that it has fewer shres and has not declared bonus for quite some time to my knowledge.
please holla.

Flour Mills is well diversified hence they can weather rough and tough times better than Costain. There are certain 'facts behind figures' that you need to look at. Put in another way, while I can speculate with Costain, it will not be my LONGT TERM holding.

On Longman, the seasonal nature of the business means that they will earn more profit in the last quarter of the financial year while it is the opposite for UPL because of their end year. Now UPL can grow profit by 95% but by how much have they grown the outstanding shares?

freshmoney:
Your certificates will soon be in your Post Office Box. I too bought almost 150,000 units of FBN shares and I am expecting the certificates. I overheard the certificates have been released from the Registrar's office early last month, so be expectant of it.

WRONG!!! Allotment yet to be done/cleared!!!! So you will still have to wait!!!

Does anyone has the oustanding shares of Crusader? Does this take into consideration the five companies acquired by Crusader? Anyone seeing the scheme of merger document? How many shares were issued to the insurance companies? Most figures seems to only consider the PO shares alone. The five companies acquired by crusader are
1. Refuge Insurance Company Limited
2. Golden Insurance Company Limited
3. Royal Trust Assurance Limited
4. Admiral Insurance Limited
5. Trust & Guarantee Insurance company Limited

esco399:
Incorrect statement, and could be very costly. No gains have been made until sold (not counting dividends etc, which may still not be a gain), A position to sell does not guarantee gains. To sell, someone must be willing to buy. If noone is willing to buy at that price, then that sale position you are proud of means nothing, and you could even see the position erode to a point of loss. A lot of people think this way, but luckily they are trading in the NSE where there is a little protection, If that way of thinking is tried in other developed markets, the consequences could be very dire. I believe Ericsson recently lost 25% in a day just a few days ago, Enron lost over 90% in a day when that issue happened, (a lot of people's "perceived gians" wiped away in one trading session)

While I get your point, in Nigeria maximum you can lose in a day is 5%. Also, stocks that are not liquid are always difficult to sell. That's why one should be careful on those illiquid stocks!!!!!

crazyT:
Same with me I place and order about 6months ago for 500k units was able to get only 140k @0.33, guess it's time to bail out or N :POT?

Why the hurry Stay put and enjoy the LOOT

RoughCut:
@wanajo
Couldn't agree more but i'm still of the opinion that Alhaji Dangote is a formidable competitor and he has the means and resources to rustle a few feathers but going forward short-term Flour Mills is the real McCoy long-term don't count Dangote out. Flour Mills is solid anyday but Alhaji Dangote may gatecrash the party!

Not counting Dangote out. My post was just to show how much I underrated the Flour Mills guys. They looked so clueless at the AGM. After that I swore NEVER to attend any AGM again. I looked at their rights issue with disdain. Have a friend who took his rights and even bought much more. Now the guy is smilling. No doubt about it, they have their business model right. Imagine a 70k share giving 90k dividend and the stock price still held steady!!!!! That to me shows resilience and strong fundamentals.

esco399:
@ Wanajo - I think I would have to agree. I'm speculating the same thing also (haven't come across any news of it yet, maybe someone has). I was studying it as well, but couldn't put a finger on it. There is still something very odd about it all though. It's been gaining about 5% daily for the past week, but notice the # of deals, the volume & the value, It's been averaging about only 2 deals per day, and about 15,000 shares valued at about N15,000 daily, This is way too small, It could very well be insider trading, trying to prop up the price prior to coming out for an offer, by then the books could be very well cooked to justify the possibly overvalued stock. All is speculation though , someone may very well know something I don't

It is not a liquid stock. How many shareholders do they have? That's why you have limited deals and few units being traded. Placed an order over 5 months ago but yet to get a single unit to BUY.

RoughCut:
I'm with you  bro on Flour Mills. They are also into shipping they own Star shipping company and Northern Nigeria Flour Mills is also a subsidiary. I think their strategy is to achieve market dominance in the industries in which they are involved. If you look closely at their competitor Dangote Flour Mills they are also in to Pasta, Sacks,Bagging and Cement production. So the players in this sector basically operate in the same market space but their is a crucial difference between the business models of these two giants of the industry. There is a lot of  intra business transactions between the companies in Dangote group and they have tended to enjoy government patronage in the past so there is a very high degree of coupling in the Dangote group which means they probably can't grow the businesses significantly outside of the group and if something adverse should happen to one of  the Dangote companies for instance it will have a domino effect on other companies in the group that tend to rely on one another so not a good business strategy for me.

Dont forget Dangote has deep pockets so his group might actually be a major threat to Flour Mills in terms of grabbing market share and margins will even be squeezed further.
Watch the space!

I attended Flour Mills AGM a couple of years ago. Then I saw Dangote a a threat. Was so angry that they did not see it like that. The chairman of the board was pathetic. So arrogant (Greek American). I was ready to cashout right then. Then they have a huge financing cost. So they were prodded to go for a rights issue. Out of anger, I only took my righst instead of buying more. The rights was at 12.00 or thereabout. See the same flour mills now. Those guys know what they are doing. Yes Dangote is a competitor but Flour Mills is the market leader. Flour Mills has mills all over the federation. Yes they are not as big as Dangote in cement but that is all. In all the other areas, they are the market leader. In terms of fundamentals, that is the BEST stock out there. Well positioned for growth. Well diversified. The change over to gas is a good advantage for them. More comfortable with them than Dangote Flour. It will be interesting how they both battle it out. Flour Mills is tried and tested!!!!

diva4eva:
@ WANAJO,
PLS WHAT'S THE PROBLEM THAT GLOBE RE IS EXPERIENCING. I BOUGHT LOADS OF IT DURING THE PRIVATE PLACEMENT AND I'M BEGINNING TO GET WORRIED. I HOPE I HVNT BURNT MY FINGERS AND TOES. please i need this info badly. please reply

Globe Re did not meet the initial consolidation deadline. Hence they entered into a merger agreement with Nigerian Re that was bought by Jimoh Ibrahim. However, with the review of the merger agreement, Globe Re opened again their private placement. Having raised money now (after the initial deadline) Globe Re wants to pull out of the unfavourable merger arrangement. Unfortunately for them, according to Jimoh Ibrahim, Globe RE died Feb 28, 2007 when they 'merged' with Nigerian Re. so it is possible that we have another All States situation here where people bought shares of a dead company! In teh acse of All States, people can run to SEC. For Globe Re, the placement is not regulated by SEC.

crazyT:
Wanaj0, I really don't know what is pushing Capital Oil lately, it has started gaining for the past one week non stop.
Do you have any tangible reason for this?

I think they are planning an offer. Capital Oil control the distribution of petroleum products in the South East

shigidi:
@ easimoni, whats your take on flour mills it has good fundamentals but its Q1`result only showed 27% growth. that should take it to 90 naira at best. yet every reputed brokerage firm recommends flour mills like you could double your money or something. do u think it can perform better than this in a sector where the margins are pretty thin in comparision with the banks

Flour Mills did not grow profit for Q1 due to the gas supply distruption around April/May that affected the operating cost. That said, Flour Mills is as solid as you can imagine. Margin in Flour is thin but the margin in Fertiliser and BAGCO is huge. Don't forget they also have a terminal at the port now. Add that to the cement importation and the new cement plant and you will see a well diversified company. They've increased their holdings in some of their associates/subsidiaries. Flour Mills should actually be a conglomerate.

harrisoft:
@wanaj0

thank you very much sir.

One more question please help out.

I have this free N500,000.00 to invest on stocks do you advise that i buy Cursader with it.

I can afford to wait for the next One year (still September 2008) before get my money back, what is your personal opinion about it. and like what will i be expecting to get as returns.

I can not pay for this consultancy only God will pay you back.

well, I tend to buy stocks that I am willing to hold for LIFE.

If I know the expected gains for ALL stocks then I must be GOD!!!! My brother we can all only speculate and pontificate but there are so many things outside our control. Many things can turn ALL the analysis into trash. Imagine a coup in Nigeria for example? What of escalation of the Niger Delta crisis?

That said, I see Crusader as a GOOD stock to have in the insurance sector. Same thing with UNIC.

Diamond is also a stock that you can look at. FCMB offer also is not bad.

Temmie10:
FCMB's offer is good but its not all that.
Still trading at a trailing pe close to 30.
And if you look at forecast eps for 2008 and prices that stocks shld trade on rationally, then there is not too much between fcmb and fidelity.
Its obvious all the firms are going for forecasts that will double the share price in 1 yr since that is what appeals to the Nigerian investor.
So all their foreward PEs are very similar, all within the same range, all of them.
BUt having said that, the banks have a way of meeting their forecasts more often than not.

If what we considered the forecasts alone, Access would stand miles ahead of all these other offers but we know better .

One good thing about the FCMB offer is the strategy. For once, a bank is not spending money opening unprofitable branches! That's my problem with Zenith especially!!!!! Why open loss making branches? Why not leverage on e-banking? Why not role out ATMS all over? Of what advantage is having branches located less than five minutes walking distance to each other.

I am just fascinated with FCMB. With all the mergers and acquisitions that are to come, expect them to be a major player there. If they can get their mortgage financing plans on track, that will also be a good revenue stream for them. The board also looked experienced (apart from the MD). All in all, it is looking attractive.

MyPeace:
wanajo

have u read my email?

Yes I ahve. But we need to talk more.

We fit beg the guy small. Do not need that many units! Haba?

harrisoft:
@wanjo


Ref:
Crusader < 4.50
Niger <2.5
MBenefit < 2.0
AIICO < 2.50
NEM < 1.0
That's my personal opinion based on available info.



Thank you very much for your quick reply sir.

Sir, do you expect this price to get that low b/w now and March 2008.

or it will continue to go up till March 2008.

(I am complieing you personal Opinion and every thing you post on this site, it mean so much to me sir.)

waiting for your reply, sir.

Well NEM is on a free fall. Not sure the prices will fall that low. Question should be how high can some of the prices go from where they are now.

For me, Crusader is the jewel in the crown. That's one to go for.

damoche07:
Hi guys, learnt Red Star Express is coming out for an IPO.whats your take on them preprospectus.anyone out there with what their price might be and their prospects.will it be worth saving some cash for.

http://www.punchng.com/Articl.aspx?theartic=Art20071017059053

They did a SECRET private placement this year at 4.00. I expect a serious stock split and bonus to have taken place so as to still do the IPO at the 4.00 - 5.00 range.

That's why I need TransExpress fast.

Anyone watching Capital Oil??

RoughCut:
A lot of the projects they have earmarked the offer proceeds for are already on-going so not 'greenfield projects' per se and a handsome proportion of what they raise will be used in acquiring 100% equity in one of their subsidiaries and also shoring up the capital base of other subsidiaries. Good business strategy for organic growth.

I am actually impressed by the strategy instead of all this branch expansion nonsense that others are going into.

I see them getting involved in mortgage financing. I think I will take a look at them

Mr. Risky:
I have some 500,000 units of UNTL shares to offload. Any buyer? Just kidding Anyways AP don reach 101 today ooo. What is going on there?

Wanajo,
Your price take on your choice insurance stocks is a great one. Serves as a guide for many, whether trading or investing. Thanks. But for those who have lumped so many units at a higher price, take heart. It is the turn of the Insurance sector to surprise us this time, not the other way round. You saw what LAW UNION has done? Many great things are in the offing.

Risky, my price is based on my personality so it is not cast in stone. Some are more adventurous. Some are more bullish.

On UNTL, it provided me with some learnings. Many years ago, placed an order for my broker to buy UNTL. Then the price was about 2.00. Many months after, I got a contract note that it was bought at 4.75. I was furious. Since that day, I learnt that you MUST always set a price limit for any order. Secondly, all my orders must expire after a certain period!!!!!

Well, you are better off dashing your UNTL shares to charity! They will surely pray for you. That company is DEAD!!!!

FCMB looks better than Fidelity for sure!!!!! Also, most of the funds to be raised will be contributing to profit within one year. Looking attractive to me.

harrisoft:
@wanaj0

ref: "How the current price ok" and "Water will always find its level"


stock Current price water will find level price

Wapic 7.00 ??

Cursader 4.38 ??

Niger 4.00 ??

M Benefit 3.00

Allco 3.73

NEM 2.33


Oga wanaj0, please can you help me with likely price that i can take a position with.

And thank you for that Bonus lesson of yesterday.

waiting 4 my oga reply.

No Oga for here OOOOO.

If the information I got as per the oustanding shares are right, a good entry price for me based on my PERSON (risk profile, investment objective and philosophy) will be:


Crusader  < 4.50
Niger  <2.5
MBenefit  < 2.0
AIICO    < 2.50
NEM < 1.0

That's my personal opinion based on available info.

Mr. Risky:
Thought GTB half year result is due? Should we expect it this month? Is Bank PHB pursuing GTB? What with their first quarter results of N3.5b, N3.5b? Many things are happening

In 2004, GTB released the interim result on 19/10/2004. 2005 it was released on 17/11/2005. 2006 interim result was released by 26/09/2006. So for 2007, I will expect that within the next two to three weeks the result should be out. Not expecting anything fantastic.

Risky, you said it all. Investing philosophy differs depending on individual personalities. That's why there is no RIGHT or WRONG answer. It all depend on WHO you are and what your investment OBJECTIVES are. What is good for one person is not necessarily good for the other. That's why we need to be careful when making general statements because some people will swallow it hook line and sinker.

Thanks for your insights.

frankiriri:
While I agree with easimoni and co that bonuses should not count for much, I think that the signalling effect it has may be one reason why even institutional investors would place a higher value on a coy that issues bonus. Take Zenith for example, they are not known to issue bonuses and for them to have done so this year may have been as a result of management's consideration that they would generate enough profit to support the current dividend level well into the future.
Also the idea of dumping a good coy's stock just because it issued a bonus does not sit well with me. You may find it pretty difficult getting back in at a good price.
My advice- even if you don't believe it, take measures to profit from it

I am not against bonuses. At least it really changes nothing!

My concern is when loss making companies or companies having dwindling profit continue to give bonus to cover their back. AIICo for example was giving bonuses when profit was dwindling. I don't like that. It get more disturbing when you give bonus without a cash dividend.

GTB is generous with bonus and dividend. I love them. The fundamentals can support it. They always tend to grow profit to support the the increase in oustanding shares.

NBL was giving bonus when they were not growing profit. See where it landed them.

Maybe it is because I am not a speculator. I don't just buy a stock just because of bonus or rumours of a bonus. I tend to buy based on the VALUE that such companies hold.

I will not dump a stock just because they declared a bonus for as long as they can grow profit to meet the demand of the new shares.

easimoni:
Hmmm. Maybe Stanbic brings more to the table than we realize. If the addition of Stanbic enables IBTC to double earnings, it's well worth 20 bucks. Only time will tell. Not a chance I'm willing to take.

Merger with Stanbic places IBTC in a good position to profit from BIG ticket transactions like the MTN deal. With so many South African companies coming to Nigeria, that is a big market.

Intercontinental is also set to gain from the Asian investment in Nigeria especially the Chinese.

Expect more strategic deals.

Temmie10:
On paper a company does not need to be very profitable to give bonus.
However, in a nigerian setting, bonus is a huge psychological factor that influences stock price movement.
So both sides have a point. Even in a bearish market, a good bonus will still puch the stock price up like we have seen.

Fundamentally, bonuses are not good for the long term eps except a company can increase profits very well consistently (and some companies can do this). Easimoni has a point because many times the idea of bonus is abused in Nigeria i.e. when a company's profits are redusing and yet more bonuses are being issued.

In a Nigerian setting however, announcements of bonus sparks rallies and where there is no bonus, very little reaction occurs (the price may even take a beating) many times so you're right in saying that bonus carries weight

Bonus without commensurate growth in profit is a recipe for disaster. Go and ask NBL shareholders and they will tell you.

A particular year, UNIC declared a 3 for 1 bonus. They are yet to recover from it!!!!!!

AIICO was not doing well when they were declaring bonus issue.

If you will not declare a bonus, you can declare GOOD dividend. NESTLE, TOTAL hardly give bonus. See where they are.

Performance must back up whatever benefits you give out. You can't deceive people for so long!

easimoni:
@ Wanaj0,
give us the gist on First Aluminium. Saw on the other forum that you might take a position. Are you expecting a turn-around v soon?

Not quite. First Aluminium was trading above 3.00 and the guy recommended a BUY. I told him then that First Aluminium is not making profit that I expect the price to drop to 1.50. The guy called me out that I was saying nonsense. The post was just to remind him of the price of first aluminium now. The initial discussion was had in August.

First Aluminium is a stock with potential but until ALSCON is up and running I will stay clear. While potential is good, one need to be careful!