Quote:
Originally Posted by nwoyearoh
I assume the interest you quoted (20%) is for borrowing the N30 million. If you turn over the N30million just once over a one year period (i.e buy + sell) this adds 5% as transaction costs (to the brokers). If one factors 13% inflation rate for one year then we are talking about a total exposure of 38%.
Ensure that whatever stocks you pick (at the correct timming) must return more than 38% for the exrecise to be worth it. 25% return merely ensures you are not owing anyone anything - you just enriched the Lender & your stockbroker(s). Ability to stay above inflation rate is now hypothetically subsidized by personal efforts in other areas.
Having said that it might make sense for you to do more analysis on the following stocks :
Oceanic Bank, Diamond, Skye, Dangote Sugar, Mutual Benefits, Standard Alliance and RT Briscoe. (This assumes that both banks will not be negatively impacted by the December end year rule by the CBN) 
The final choice is yours!
Like I said earlier, goodluck.  |
Oceanic and skye are on my list,l have been increasing my holdinds in both banks.l dont think they will be adversely affected by the Uniform year policy, rather it should favour both banks.