Monday, 8 September 2008
LINKAGE ASSURANCE 2007 RESULTS
Linkage Assurance Plc today released its audited results for the year ended 31st December, 2007. Turnover jumped by 258.49% to N1.026 billion, from N286.2 million, PBT also increased by 298.95% to N304.8 million, from N76.4 million, PAT also increased by 283.08% to N273.9 million, from N71.5 million, in the corresponding period of 2007.
LENDING RATES STILL RISING
Average normal lending rates officially rose to 17.68 percent at the close of August, in spite of decision by the Monetary Policy Committee (MPC) to retain both the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) at 10.5 and four percent respectively.The MPR is the rate at which CBN lends money to banks. At the end of the day, if the apex bank increases its lending rate, banks will in turn lend money to their customers at higher rates.The implication is that retaining the rate means that the lending rates were supposed to be stabilized.As for the CRR, it is the amount of money banks keep with the CBN. In effect, since the apex bank retained the former rate, banks would have more money to play with or lend to their customers.But according to the Money Market Association of Nigeria (MMAN), the rise in lending rates connotes high cost of fund, and the apex bank’s drive to achieve a single digit inflation rate.Nonetheless, recent figures released for the month of July indicate that inflation rate rose from a double digit 12 percent in June to 14 percent the following month.On the other hand, savings rate dropped marginally during the month to an average of 3.4635 percent, while prime lending rate shed 0.11 basis points to end on an average of 17.4048 percent.
Source: Businessday Newspaper
Source: Businessday Newspaper
MARKET REPORTS FOR 05/09/08
The Nigerian equities market witnessed yet another lull period as all major market indicators stride southwards and end in bear’s camp. On a day which saw the ratio of advancers to decliners to be 1:2.57, the ASI lost 171.58 points to close at 49,615.55 whilst the market capitalization declined by US$0.31billion to close at US$89.12billion. However, values of transactions experienced a surge as the indicator increased by 50.29%.
NSE today added a total of 723,161,725 ordinary shares to the shares outstanding in favour of AIICO Plc, following the successful completion of their last public offer. This new listing now brings the total shares outstanding of AIICO to 3.402 billion units. Furthermore, a total of 4,081,925,292 ordinary shares were added to the shares outstanding of Skye Bank Plc. This comprises of 1,500,608,958 units as rights issue and 2, 231,599,145 units as offer for subscription and 349,717,180 as supplementary. The total shares outstanding of the bank now stand at 11.584 billion units.
Linkage Assurance Plc today released its audited results for the year ended 31st December, 2007. Turnover jumped by 258.49% to N1.026 billion, from N286.2 million, PBT also increased by 298.95% to N304.8 million, from N76.4 million, PAT also increased by 283.08% to N273.9 million, from N71.5 million, in the corresponding period of 2007. Flourmill Plc also released its un-audited results for first quarter ended 30th June, 2008. Turnover grew by 59.06% to N36.979 billion, while PAT increased by 33.20% to N1.950 billion and PAT increased by 33.17% to N1.365 billion. In spite of the good earnings reported by the two companies, their share price closed flat. This might be due to the current mood in the market for Linkage Assurance and low traded for Flourmill.
The downturn in the market activities may be connected to the wearing out of the euphoria generated by the recent policy measures introduced by stakeholders which stimulated a short rally which lasted barely a week. The present situation suggests that investors’ confidence have not been fully regained. In our opinion, the market seems to be waiting for the implementation of the other strategies recently announced. Furthermore, the rising cost of fund, tight liquidity condition and scarcity of investible funds are also obstructing the recovery of the market in view of the uncertainties of the policy initiatives.
Index was down by 34 basis pts on 11,890 trades. Average size of trade was US$5,793 with total value of US$68.88m. Market cap closed at US$89.12billion.
Overall, there were 21 gainers and 54 losers and 62 unchanged.
The Banking sector led the volume chart followed by the Insurance sector and both accounted for 80.61% of total volume traded.
Afribank Plc traded 212.301 million shares to top the overall volume chart. Other stocks that closed in the top echelon were Spring Bank, Goldlink Insurance, Japaul Oil and Investment and Allied Insurance.
Net bid: Universal Insurance, Sterling Bank, Continental Reinsurance and Cornerstone Insurance Plc.
Net Offer: Investment and Allied Insurance, Oceanic bank, Bank PHB, Access Bank and GTB.
Top Gainers: PZ, Presco, Nahco, Sterling Bank and Academy Press.
Top Losers: Julius Berger, NBC, GTB, Chevron and Dangote Sugar.
NSE today added a total of 723,161,725 ordinary shares to the shares outstanding in favour of AIICO Plc, following the successful completion of their last public offer. This new listing now brings the total shares outstanding of AIICO to 3.402 billion units. Furthermore, a total of 4,081,925,292 ordinary shares were added to the shares outstanding of Skye Bank Plc. This comprises of 1,500,608,958 units as rights issue and 2, 231,599,145 units as offer for subscription and 349,717,180 as supplementary. The total shares outstanding of the bank now stand at 11.584 billion units.
Linkage Assurance Plc today released its audited results for the year ended 31st December, 2007. Turnover jumped by 258.49% to N1.026 billion, from N286.2 million, PBT also increased by 298.95% to N304.8 million, from N76.4 million, PAT also increased by 283.08% to N273.9 million, from N71.5 million, in the corresponding period of 2007. Flourmill Plc also released its un-audited results for first quarter ended 30th June, 2008. Turnover grew by 59.06% to N36.979 billion, while PAT increased by 33.20% to N1.950 billion and PAT increased by 33.17% to N1.365 billion. In spite of the good earnings reported by the two companies, their share price closed flat. This might be due to the current mood in the market for Linkage Assurance and low traded for Flourmill.
The downturn in the market activities may be connected to the wearing out of the euphoria generated by the recent policy measures introduced by stakeholders which stimulated a short rally which lasted barely a week. The present situation suggests that investors’ confidence have not been fully regained. In our opinion, the market seems to be waiting for the implementation of the other strategies recently announced. Furthermore, the rising cost of fund, tight liquidity condition and scarcity of investible funds are also obstructing the recovery of the market in view of the uncertainties of the policy initiatives.
Index was down by 34 basis pts on 11,890 trades. Average size of trade was US$5,793 with total value of US$68.88m. Market cap closed at US$89.12billion.
Overall, there were 21 gainers and 54 losers and 62 unchanged.
The Banking sector led the volume chart followed by the Insurance sector and both accounted for 80.61% of total volume traded.
Afribank Plc traded 212.301 million shares to top the overall volume chart. Other stocks that closed in the top echelon were Spring Bank, Goldlink Insurance, Japaul Oil and Investment and Allied Insurance.
Net bid: Universal Insurance, Sterling Bank, Continental Reinsurance and Cornerstone Insurance Plc.
Net Offer: Investment and Allied Insurance, Oceanic bank, Bank PHB, Access Bank and GTB.
Top Gainers: PZ, Presco, Nahco, Sterling Bank and Academy Press.
Top Losers: Julius Berger, NBC, GTB, Chevron and Dangote Sugar.
LATEST REPORTS ABOUT WEMA BANK
There is a lot that has been said and written about Wema Bank Plc saga and the persons who have held the position of GMD/CEO till date. Amidst the fact, myth and realities making the rounds, the Adebisi Omoyeni episode has had a more profound effect on the bank, industry and public at large.
The accusations, counter accusations, court suits, and media communications and petitions have exposed the underbelly of the corporate governance regime in a bank that was set up to define the best of values the western states making up the leadership had to offer.
The level of corporate politics and the limitations of our compliance/enforcement functions has been the defining fall-out, much less the personalities involved.
Far more important however has been the limited role minority investors have in such issues and the role of AGM’s.
Whilst, Wema Bank Plc had some very unique challenges, it must be said that this was the case with others in the sector who were equally involved in the pre and post consolidation issues that defined the banks that existed today.
To use these challenges as an excuse for a failure of leadership is simply turning logic on its head. To even go far as saying that CBN made exceptions is to challenge the very notion that there exists a level playing field.
We must get to a stage in the process and lofty objective of turning Nigeria into a financial hub of excellence where we say, enough is enough.
There has to be some basic and commonly understood tenets and practice guiding conduct and administration of rules. The Adebisi Omoyeni episode up till this evening thus raises some questions deserving of consideration:
When CBN asked him to resume on September 1, 2008 – what did that say of the investigations conducted by its supervision unit or that of NDIC?
Given that a model was once deployed to mitigate board squabbles in another bank dealing with post-consolidation challenges, why was a decision not made early on to address first, the board composition who would then be in a position to deal with the MD/CEO challenge in consonance with the shareholders and the regulator?
The ‘novel’ agreement through an MoU represents a new layer of conflict resolution not defined in the BOFID, so what does this mean? Does it represent another mechanism for the regulator?
What happened to the issues related to ‘kiting’; a subject of supervisory report for two consecutive years prior to the issues blowing open?
Has the subject of an eroded shareholders fund as identified in the NDIC report been resolved? If yes, what is the current shareholders fund of Wema Bank Plc?
When will the firm present results to the market assuming it has continued to meet its obligations of presenting monthly and quarterly returns to the CBN?
When should the market expect the suspension of its stock to be lifted and if that will happen, how will it prevent a massive dump of the shares to the detriment of the bank?
The Wema Bank Plc saga should require an independent review to help stakeholders understand the very challenge of investing in a bank or business of such ‘complex ownership’ structure.
The bank, we believe is blessed with hard working and committed employees, responsible investors and a deep base of loyal customers which sadly have not featured in the thinking of the principal actors in the impasse. They have chosen not to subjugate their self interest to the vision and larger goals of the enterprise.
From our standpoint and the information available to us, we respectfully conclude that with a more value-based inclination, the issues could and should have been better handled by those concerned, especially the regulators, SRO and Government.
Take the issue of the purported involvement of the Deputy Director of Banking Supervision at CBN, Mr. (Reverend) Tunde Lemo. After his ‘leave of absence’ at the height of the public exchange of sensitive internal issues; he resumed without much clarification on his role which has attracted genuine concern as to the veracity of the allegations made by Adebisi Omoyeni. If CBN thus allowed Mr. Omoyeni to come back, was it saying that his complaints against Tunde Lemo had a modicum of truth and merit? If not, why was he re-instated? To do so would have ridiculed the office of the function designed to determine compliance in the banking sector.
If on the other hand, Mr. Omoyeni was correct; to retain Rev. Tunde Lemo without clarifying what became of investigations into his role in the matter which, extended to its logical conclusions, bothers on abuse of process and position, is a bad precedence.
Quite Frankly, we have held a vigil on developments in the bank since the matter broke, painstakingly gathering data and information on developments; and had hoped that with CBN having much more data to guide its decision making, the developments of the last four (4) days should never have occurred.
The ‘drama’ of the last four days has been disheartening to say the least. Much more was expected from the regulators who had the leverage to take decisive steps that would have sent all the right signals to the investing and consuming public (recall that the issues dates back to the consolidation period and the decision by CBN to allow Wema Bank not to publish its financial statements based on an application the bank made as regards certain developments). To allow it to degenerate into a ‘street fight’ with parties bringing different detachments of the Nigerian Police to gain entrance or force an ejection; is less than responsible.
The ‘village square’ show might appear laughable but it is painfully serious enough an indictment of a failed policy of enforcement and protection of the Investor’s rights and market safety; which ironically appears to be their ultimate objective.
The means of achieving a ‘politically sound settlement’ can be rough, we acknowledge; but can CBN claim ignorance of the fact that under its watch, Wema Bank Plc largely operated for a long period with a Group Managing Director and a single Executive Director?
If nothing, on this point; the regulatory body must reflect on a lost opportunity to define leadership standards required and deemed necessary for a post-consolidation bank. Historically, it is able to conclude that such problems don’t just occur in a single day r based on a single event. It would have been brewing up and it was left to its own supervision unit to highlight and provide the early warning signal needed to take action to protect customers and investors alike.
In this case and based on the records and information available, the responsible units (CBN and NDIC) did their job. So who should have acted? The Board of Directors of Wema Bank Plc?
Here again, we must ask the same question – Given that it was a well known fact that the board could not be said to have been independent within the limited confines or restricted definition of uncompromised corporate governance. Examples of directors receiving facilities, the issue of the appointment of directors and the developments leading up to and during the last AGM flies in the face of the counter argument raised by a party in the case.
This however is no time to settle for blames.
We must go away today with the resolution that actions needed to ensure that Wema Bank Plc comes back to the market as a serious player cannot be a matter for political compromise. It must be based on sound principles as applicable to other banks as well and must reflect the best interpretation of the BOFID and regulatory/enforcement rules of the apex body.
We categorically state that we still have an implicit confidence in the ability of the Governor and Governing Board of the Central Bank of Nigeria to do the right thing.
Our primary desire and wish is simply for the current ‘musical chairs’ game to stop.
The song is well worn and it is time to take actions that should reverse the lapses of the past and set a precedent that would strengthen the financial market and restore market confidence in the whole process; especially at this time when morale in the capital market is still weak.
We call on the CBN to take all steps as deemed necessary to encourage the Board of Directors, as appointed by the shareholders and vetted by it; to take steps to put in place a leadership structure that is accountable to the board and responsive to the yearnings of the stakeholders – investors, employees and customers.
Enough of the gamesmanship!
The accusations, counter accusations, court suits, and media communications and petitions have exposed the underbelly of the corporate governance regime in a bank that was set up to define the best of values the western states making up the leadership had to offer.
The level of corporate politics and the limitations of our compliance/enforcement functions has been the defining fall-out, much less the personalities involved.
Far more important however has been the limited role minority investors have in such issues and the role of AGM’s.
Whilst, Wema Bank Plc had some very unique challenges, it must be said that this was the case with others in the sector who were equally involved in the pre and post consolidation issues that defined the banks that existed today.
To use these challenges as an excuse for a failure of leadership is simply turning logic on its head. To even go far as saying that CBN made exceptions is to challenge the very notion that there exists a level playing field.
We must get to a stage in the process and lofty objective of turning Nigeria into a financial hub of excellence where we say, enough is enough.
There has to be some basic and commonly understood tenets and practice guiding conduct and administration of rules. The Adebisi Omoyeni episode up till this evening thus raises some questions deserving of consideration:
When CBN asked him to resume on September 1, 2008 – what did that say of the investigations conducted by its supervision unit or that of NDIC?
Given that a model was once deployed to mitigate board squabbles in another bank dealing with post-consolidation challenges, why was a decision not made early on to address first, the board composition who would then be in a position to deal with the MD/CEO challenge in consonance with the shareholders and the regulator?
The ‘novel’ agreement through an MoU represents a new layer of conflict resolution not defined in the BOFID, so what does this mean? Does it represent another mechanism for the regulator?
What happened to the issues related to ‘kiting’; a subject of supervisory report for two consecutive years prior to the issues blowing open?
Has the subject of an eroded shareholders fund as identified in the NDIC report been resolved? If yes, what is the current shareholders fund of Wema Bank Plc?
When will the firm present results to the market assuming it has continued to meet its obligations of presenting monthly and quarterly returns to the CBN?
When should the market expect the suspension of its stock to be lifted and if that will happen, how will it prevent a massive dump of the shares to the detriment of the bank?
The Wema Bank Plc saga should require an independent review to help stakeholders understand the very challenge of investing in a bank or business of such ‘complex ownership’ structure.
The bank, we believe is blessed with hard working and committed employees, responsible investors and a deep base of loyal customers which sadly have not featured in the thinking of the principal actors in the impasse. They have chosen not to subjugate their self interest to the vision and larger goals of the enterprise.
From our standpoint and the information available to us, we respectfully conclude that with a more value-based inclination, the issues could and should have been better handled by those concerned, especially the regulators, SRO and Government.
Take the issue of the purported involvement of the Deputy Director of Banking Supervision at CBN, Mr. (Reverend) Tunde Lemo. After his ‘leave of absence’ at the height of the public exchange of sensitive internal issues; he resumed without much clarification on his role which has attracted genuine concern as to the veracity of the allegations made by Adebisi Omoyeni. If CBN thus allowed Mr. Omoyeni to come back, was it saying that his complaints against Tunde Lemo had a modicum of truth and merit? If not, why was he re-instated? To do so would have ridiculed the office of the function designed to determine compliance in the banking sector.
If on the other hand, Mr. Omoyeni was correct; to retain Rev. Tunde Lemo without clarifying what became of investigations into his role in the matter which, extended to its logical conclusions, bothers on abuse of process and position, is a bad precedence.
Quite Frankly, we have held a vigil on developments in the bank since the matter broke, painstakingly gathering data and information on developments; and had hoped that with CBN having much more data to guide its decision making, the developments of the last four (4) days should never have occurred.
The ‘drama’ of the last four days has been disheartening to say the least. Much more was expected from the regulators who had the leverage to take decisive steps that would have sent all the right signals to the investing and consuming public (recall that the issues dates back to the consolidation period and the decision by CBN to allow Wema Bank not to publish its financial statements based on an application the bank made as regards certain developments). To allow it to degenerate into a ‘street fight’ with parties bringing different detachments of the Nigerian Police to gain entrance or force an ejection; is less than responsible.
The ‘village square’ show might appear laughable but it is painfully serious enough an indictment of a failed policy of enforcement and protection of the Investor’s rights and market safety; which ironically appears to be their ultimate objective.
The means of achieving a ‘politically sound settlement’ can be rough, we acknowledge; but can CBN claim ignorance of the fact that under its watch, Wema Bank Plc largely operated for a long period with a Group Managing Director and a single Executive Director?
If nothing, on this point; the regulatory body must reflect on a lost opportunity to define leadership standards required and deemed necessary for a post-consolidation bank. Historically, it is able to conclude that such problems don’t just occur in a single day r based on a single event. It would have been brewing up and it was left to its own supervision unit to highlight and provide the early warning signal needed to take action to protect customers and investors alike.
In this case and based on the records and information available, the responsible units (CBN and NDIC) did their job. So who should have acted? The Board of Directors of Wema Bank Plc?
Here again, we must ask the same question – Given that it was a well known fact that the board could not be said to have been independent within the limited confines or restricted definition of uncompromised corporate governance. Examples of directors receiving facilities, the issue of the appointment of directors and the developments leading up to and during the last AGM flies in the face of the counter argument raised by a party in the case.
This however is no time to settle for blames.
We must go away today with the resolution that actions needed to ensure that Wema Bank Plc comes back to the market as a serious player cannot be a matter for political compromise. It must be based on sound principles as applicable to other banks as well and must reflect the best interpretation of the BOFID and regulatory/enforcement rules of the apex body.
We categorically state that we still have an implicit confidence in the ability of the Governor and Governing Board of the Central Bank of Nigeria to do the right thing.
Our primary desire and wish is simply for the current ‘musical chairs’ game to stop.
The song is well worn and it is time to take actions that should reverse the lapses of the past and set a precedent that would strengthen the financial market and restore market confidence in the whole process; especially at this time when morale in the capital market is still weak.
We call on the CBN to take all steps as deemed necessary to encourage the Board of Directors, as appointed by the shareholders and vetted by it; to take steps to put in place a leadership structure that is accountable to the board and responsive to the yearnings of the stakeholders – investors, employees and customers.
Enough of the gamesmanship!
Sunday, 7 September 2008
STOCK TRADING PLANNING
If you decide to trade stocks, it is important to know how you will get into a trade and know how to get out of the trade. Many investors make the mistake of only focusing in the former of there two recommendations. Not only should have a specific method for selecting and entering trades, but its good to also have a plan for selling the stocks you bought. Exit a trade whenever any of the following condition are met.
(1) you make the profit you targeted to make on the trade.
(2) The extended catalyst says to develop or the stick fails to respond as you thought.
(3) The stock fails to altercate with a predefined length of time.
Whenever any of these happens, just sell the stocks and enter a more promising whenever any of these happens, just sell the stocks and enter a more promising trade, you may make some losses but recoup all the losses and ask profits of your next try.
(1) you make the profit you targeted to make on the trade.
(2) The extended catalyst says to develop or the stick fails to respond as you thought.
(3) The stock fails to altercate with a predefined length of time.
Whenever any of these happens, just sell the stocks and enter a more promising whenever any of these happens, just sell the stocks and enter a more promising trade, you may make some losses but recoup all the losses and ask profits of your next try.
Wednesday, 3 September 2008
5% RISE, 1% FALL, THE IMPLICATIONS
All: I think we have a serious problem on our hands!!!
We need to remember that the bulk of stocks bought recently were by stockbrokers, institutional investors and high net worth clients. I reckon that between them, they have bought practically everything worth buying since the false bottom, false 1% exit door was created.
What this means in essence is that as soon as the fabricated bull run commenced they bought existing sell orders that were yet to be actioned, since there were no buyers, previously!!
This is why the brokers made sure they had the first pickings! Now that that they have mopped up sell orders that were not cancelled, who will supply stocks for the rest of us to buy?
Who wants to sell when they are yet to realise profit? If you are in profit, you must have been lucky to buy just before the imaginary bull run!
Who is willing to give up 100k units to enable the price to rise?
Personally I do not see the market going anywhere under the current situation! It will turn out to be a stalemate! Those that want in can't get in, those that want out can't get out, but hey the prices will remain high for as long as the 1% rule remains!!!
Who gains from all this:
The government is happy that it has a stock market that is supposedly "up" and not down! for this reason the government might be the compelled to leave the 1% rule in place much longer than we could possibly imagine.
The government has forced those in the market to remain long term! You have no choice but to go long term, unless you get out quickly as in now!! rather than later!
We need to remember that the bulk of stocks bought recently were by stockbrokers, institutional investors and high net worth clients. I reckon that between them, they have bought practically everything worth buying since the false bottom, false 1% exit door was created.
What this means in essence is that as soon as the fabricated bull run commenced they bought existing sell orders that were yet to be actioned, since there were no buyers, previously!!
This is why the brokers made sure they had the first pickings! Now that that they have mopped up sell orders that were not cancelled, who will supply stocks for the rest of us to buy?
Who wants to sell when they are yet to realise profit? If you are in profit, you must have been lucky to buy just before the imaginary bull run!
Who is willing to give up 100k units to enable the price to rise?
Personally I do not see the market going anywhere under the current situation! It will turn out to be a stalemate! Those that want in can't get in, those that want out can't get out, but hey the prices will remain high for as long as the 1% rule remains!!!
Who gains from all this:
The government is happy that it has a stock market that is supposedly "up" and not down! for this reason the government might be the compelled to leave the 1% rule in place much longer than we could possibly imagine.
The government has forced those in the market to remain long term! You have no choice but to go long term, unless you get out quickly as in now!! rather than later!
ARE THE BULLS GETTING TIRED.
For holders of Union homes, start thinking of selling from tomorrow, some guys have just picked around 30% PAF in that stock since last week.
Sell if you went in low and you are playing short; hold if you a playing long on this one as the company have some good prospects for the future. I am looking at the increasing volume supplied to the floors today and feel that the 24,023,553 units already sold means that some heavy holders may have initiated dumping procedures……… but it may end up gaining today.
Sell if you went in low and you are playing short; hold if you a playing long on this one as the company have some good prospects for the future. I am looking at the increasing volume supplied to the floors today and feel that the 24,023,553 units already sold means that some heavy holders may have initiated dumping procedures……… but it may end up gaining today.
Subscribe to:
Posts (Atom)