First Aluminium

[timothywill]

please i just have to ask before i jump, oga apache, riskreturn and other genius in the house, please i saw the rallying of this company first aluminium and i want to ask if its a good buy for me now at the current price as i want to buy some quantity tomorrow if its not too late. abeg i need ur quick intervention oooooooo, na bank money oooooooo

[riskreturn]

Originally Posted by timothywill

please i just have to ask before i jump, oga apache, riskreturn and other genius in the house, please i saw the rallying of this company first aluminium and i want to ask if its a good buy for me now at the current price as i want to buy some quantity tomorrow if its not too late. abeg i need ur quick intervention oooooooo, na bank money oooooooo

I do not have any grapevine or other unpublished information about the stock and neither could I lay my hands on any of its recent quarterly or even audited results. The only thing I know about it is that, like most other penny (or non-blue chip) stocks, it currently trades at an all-time peak price of above 8 Naira, compared to the lowest price of 2.28 Naira it attained earlier this year 2008 - translating to about 250% rate of appreciation in less than 3 months.

Buying shares when prices are rising is called "chasing" and this strategy works occasionally. However, it is prone to substantial risks because such prices are more prone to collapsing, unless supported by fundamental. In the present Nigerian context, such is not advisable (except in some very rare cases) for non-blue chip stocks. Prices of most penny stocks have risen 3 or 4 folds in the past few months without any change whatsoever in the information available to investors about future prospects of the companies. The probability of downside is therefore more than that of upside as, sooner or later, investors' sentiments would change and their eyes would now open to the futility of just buying papers (or titles to very little) at high prices. For smart and fortunate investors, they would get away with gains by selling such stocks before the imminent collapse - as we have been having in the past few months where many have made fortunes through this. But, mathematically, it is not possible for all investors to be so fortunate for some investors' gains must be exactly equal to the losses incurred by other investors (a zero-sum gate type of thing) in the process of staking money on majorly worthless things they call penny stocks characterised with weak fundamentals.

My own scripture I would refer you to states that: The fear of non-blue chip stocks (in Nigerian stock market today) is the beginning of (financial) wisdom ... The love of penny stock (in NSE today) is the root of all (investors') evil. ... Seek yee (today) blue chip stocks first and its strong fundamentals, and all else (financially) shall be given unto you.

So, I would rather advise that you use just enough bank money that you can use in subscribing for penny stock POs/IPOs like 99,000 units of DAAR communications offer for subscription and 9,000 units of offer for sale shares, 200,000 units of Standard Alliance Insurance's PO shares (both closing on 31 March) and some other PO's like those of Crusader Insurance (50,000 units) and Custodian & Allied Insurance of about 20,000 units (both of which are expected not later than April). With these indicative units, which you are not likely to be fully allotted, you should be able to cover the interest costs of the loans with the returns you make (some 5 months after subscribing for the offers) from the sale of what you are allotted and still have some gains left. But risking bank money on penny stocks traded in the secondary market can be very dangerous.

[onlyonezee]

Well, I bought first aluminum last year and have been following it closely. Its last result showed very little profit but it was an improvement from a previous year's bad result however it was not enough to pay dividends. After a price drop to about N2, the price began rising steadily to its present price and it is still climbing. Now even though this rise pleases me, I am wise enough to know that there is no safety net ( the rise is not backed by fundamantals). I already plan to jump off this ship within a week or two and thank God for my 100%+ returns.

It remains your choice whether to invest in First alum or not but if I were you, I'd not risk it with borrowed funds. It is always better when you invest before the rallying begins, your time to recoup may be longer but your risk will be less and believe me the last person you wanna owe is a bank! All the best

[onlyonezee]

See old post on First Aluminium below

First Aluminium blames performance on poor economy
Source - Finanacial Standard Newspapers Posted to the web on Jun 19, 2007


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Alhaji Sulaiman Baffa, chairman, First Aluminium Nigeria Plc has said the low financial performance of the group reflected the difficult environment in which the company operates.
He said the difficulty in the operating environment was evidenced by external factors such as high aluminium and oil prices in international markets and delays at the ports and an intermittent and unreliable power supply in Nigeria.
Baffa said inspite of all the difficulties, the demand for the company's products remain strong and whilst the group grew turnover by seven per cent to N8.7 billion.
He however lamented that growth would have been better if it were not for the port problems that caused raw material shortages in the first half of 2006.
He said the external factors mentioned earlier were a major contributor to a 19 per cent reduction in profit before interest and tax to N494 million.
Baffa said: "2006 started with disruption to key imports caused by the change in the import inspection mechanism from origin to destination inspection. There was no doubt that the destination inspection regime was beneficial to the nation's economy, delays to the import of essential raw materials caused by initial uncertainties in its implementation lead to loss of production and sales in all three divisions."
He noted that production has since recovered but import lead cycle remains longer now than in 2005 and this has added to pressure on working capital requirements to fund raw material import.
According to him, the price of aluminium on the world price market had increased considerably, last year at one point, peaking at almost US $3,000 per tonne and throughout the year, prices remained at levels considerably higher than in 2005.
He said a degree of price resistance in the local market for aluminium products put pressure on operating margins throughout the group.
He pointed out that the higher aluminium price further impacted upon on working capital requirements but noted that Central Bank of Nigeria's policy of protecting the value of naira has helped bring stability to import planning.
He stated that the spiraling cost of energy which was driven by high oil prices had an adverse effect on the rolling mill's profitability and disruption to the gas and electricity supply impacted upon the mill's output.
He added that despite the problems, the rolling mill was able to sell at its output in 2006 and posted a turnover of N6.7 billion which was an increase of nine per cent over 2005. Baffa said the combination of lower volumes and higher costs however led to a 17 per cent reduction in trading profit at the rolling mill.
"The packaging division experienced a growth in sales volume and we believed the growth would have been greater were it not for problems encountered by a customer in a product relaunch during 2006 which led to a reduction in demand," Baffa explained.
He said that the results of the company were also affected by anomaly in the import duty tariff structure that attributes a higher duty rate to the division's principal raw material than was attributed to imported finished products.
The First Aluminium chairman said the combination of a larger import lead time, significantly higher world aluminium prices and an increase in MRR to 14 per cent which led to higher borrowing costs in 2006 downed the overall performance of the group.
He meanwhile assured shareholders that steps are being taken to address the many challenges with a view to enhancing shareholder value in the future.
He said the gas supply has now stabilised and steps have been taken to improve the continuity of electricity supply so the company could be more confident that its energy needs would be met.

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[onlyonezee]

Despite the past history of this firm, it continues to be on bid thus raising the price by the maximum points each day. Alot of people are smiling to the bank. ALUMACO is also rising steadily, does anyone have any info on this company?

The aluminium companies are doing well I think because of an aluminium smelting plant that has been or will soon be commisioned. It means this companies will be able to get thier main raw materials at much lower prices and turnaround time.

[timothywill]

Originally Posted by onlyonezee

Despite the past history of this firm, it continues to be on bid thus raising the price by the maximum points each day. Alot of people are smiling to the bank. ALUMACO is also rising steadily, does anyone have any info on this company?

The aluminium companies are doing well I think because of an aluminium smelting plant that has been or will soon be commisioned. It means this companies will be able to get thier main raw materials at much lower prices and turnaround time.

but will they be able to turn around the cost of source of energy such as diesel and almighty PHCN. hey, raw materials is never a problem to this companies but energy supply. well i hope they continue like this

[polosco]

I just want to know if any one in the house thinks that the rise of 1st Aluminium will continue for this week and wat price is it likely to start going down? 'Longer' throat wants to kill me oh!
THANKS ALL................

[princessarmstrong]

longer throat is normal as long as we are talking about stocks... first aluminium might rise, but i guess one shouldnt take chances...but its a positive one.

[c kenneths]

With what happened yesterday as a basis for caution, I am of the opinion that all these fundamentalless comanies making rapid rise without solid results to back up such rise will soon recieve the HAMMER from SEC.

I read the news of Afroil and Capital oil and what I felt was, WHO NEXT?

[stan]

i dont see anything attractive about first aluminium for now that will push up the price to the present level. i am aware of the big loss they had in 2006 yr end. can any body tell me what thier 2007 quarterly looked like? pls lets be wise

[Apache]

Originally Posted by timothywill

please i just have to ask before i jump, oga apache, riskreturn and other genius in the house, please i saw the rallying of this company first aluminium and i want to ask if its a good buy for me now at the current price as i want to buy some quantity tomorrow if its not too late. abeg i need ur quick intervention oooooooo, na bank money oooooooo

@Timothywill
we meet again
I use God beg you, no speculate with bank money o! don't have much info on this company so might not ba able to contribute.

[timothywill]

FIRST ALUMINIUM NIG PLC
3RD QUARTER RESULT ENDED 30TH SEPTEMBER 2007
2007 2006 %CHANGE
TURNOVER N2.556b N2.004b 27.52
PROFIT BEFORE TAXATION (N67.304m) (N88.696m) 24.12
TAXATION N21.537m N28.383m -24.12
PROFIT AFTER TAXATION (N45.764m) (N60.313m) 24.12

well apac, i took the risk, make N1 gain per share and bow out, even though the price has continued on the increase after then but its you elders that do say prevention is better than cure i.e if there is cure for it at all.
that is all i could lay my hands on about their latest result from NSE site.

[Apache]

Originally Posted by timothywill

FIRST ALUMINIUM NIG PLC
3RD QUARTER RESULT ENDED 30TH SEPTEMBER 2007
2007 2006 %CHANGE
TURNOVER N2.556b N2.004b 27.52
PROFIT BEFORE TAXATION (N67.304m) (N88.696m) 24.12
TAXATION N21.537m N28.383m -24.12
PROFIT AFTER TAXATION (N45.764m) (N60.313m) 24.12

well apac, i took the risk, make N1 gain per share and bow out, even though the price has continued on the increase after then but its you elders that do say prevention is better than cure i.e if there is cure for it at all.
that is all i could lay my hands on about their latest result from NSE site.

Correct guy. Oya send 10% of your gain to my bank account as tithes

[tkb417]

@Timo
please, i'll say you shouldnt join that train now. . i bought that stock when it was 4.73 and im still giving thanks to my broker for being able to get it then. A lot of people joined when it was 7naira and i think they can strike anytime. Check the signals in the last trading day, it will be a miracle if by close of biz today the Bulls emerge victorious in der fight with the Bears.

I'll say you press the CHILL button and see out this Bearish movements pervading the whole market.But na NSE o, the thing can start another Bullish runs o, but thread with caution!

Caveat emptor o!

happy investing!

[kelly5]

Guys, any info about Firstal? whether they are still being investigated or let off the hook. My broker informed me last week that he bought some units for me. I sent a mandate to them 2 weeks earlier but I wonder why he bought firstal 3 days after afroil was placed on suspension

[samu43]

Originally Posted by kelly5

Guys, any info about Firstal? whether they are still being investigated or let off the hook. My broker informed me last week that he bought some units for me. I sent a mandate to them 2 weeks earlier but I wonder why he bought firstal 3 days after afroil was placed on suspension

Same here -- broker got me this about a week ago (though i requested it much earlier) and it seems to be heading down south at the speed of sound!

Should i pack up, sell and move on Or do i wait -- Wait for what? i ask myself... True i got this without doing my homework on the fundamentals (a lesson for me) but that's in hindsight.... Any views appreciated...