MarketWatch

[zainabusman]

Originally Posted by hispy99

Thanks for the snapshot, nothing has changed. How many consecutive days has the index declined now?

We have 19 consecutive negative trading days (from Sep 4 to date). Value of transaction has been drying up with September as the worst in trading value for the year so far.

Cummulative trading for Oct 2 & 3 has been less than N4 billion. No buyers in sight.

The Index is now down 21.2% for the year and down 31.1% from its peak in March. It is gloomy all round with no buyers in sight.

Unless something happens to stop the decline we would be back to the low of the year achieved on August 26th within the next 10 trading days.

It appears our regulators have run out of ideas. There was no positive movement after the announcement of the last measures by CBN.

At some point the market will find its level. In the meantime we wait. The strong at heart can look for bargains. Afterall once the stocks reach 99k they cant fall again under the 1% rule.

[Babs_O]

Originally Posted by zainabusman

We have 19 consecutive negative trading days (from Sep 4 to date). Value of transaction has been drying up with September as the worst in trading value for the year so far.

Unless something happens to stop the decline we would be back to the low of the year achieved on August 26th within the next 10 trading days.

Let us be back to the new low of the year by 17th October. Hope by then ACCESS would have returned my witheld money for unalloted shares so that I can buy access on the floor at about N 10.38 or any other better stocks at PE < 10 and P/B of about 1.

[zainabusman]

Originally Posted by Michael

If you wait for things to change before buying the stocks you want. I wish you good luck. The same way stockbroking firms sell their own stocks before they sell yours is the way they buy for their in-house accounts before they buy yours. I can just hear them tell you "Its on Bid" while you see millions of shares crossing every day untill just before the fall they offload it to you! Zainab's Idea is a Warren Buffet special, Buy when everyone is fearful and sell when everyone is confident.
Remember also stocks can fall 1% everyday, but can rise 5% a day. This alone should scare you from waiting too long.
@Zainab, since you find the 8% Div attractive, what do you think of the 12% Convertible crusader offer?

I wont buy the debenture. U can get 13%+ in money market. Furthermore the conversion price of N7.35 when the rights are at N4.5 is not attractive.

The reason why an 8% dividend yield is attractive is that the market average is less than 4%. To my knowlege less than 5 stocks have 7%+ forward dividend yield in the entire market for now. In addition, the fwd PE ratio of Access is less than 9, another plus.

I bought a few today. My next entry is when it gets close to N10 or lower depending on market dynamics at that time.

[zainabusman]

Originally Posted by Babs_O

Let us be back to the new low of the year by 17th October. Hope by then ACCESS would have returned my witheld money for unalloted shares so that I can buy access on the floor at about N 10.38 or any other better stocks at PE < 10 and P/B of about 1.

Amen. While N 10.38 for access will be good for buyers it will signal a major problem 4 the market.

[knightofdelta]

Originally Posted by zainabusman

I wont buy the debenture. U can get 13%+ in money market. Furthermore the conversion price of N7.35 when the rights are at N4.5 is not attractive.

The reason why an 8% dividend yield is attractive is that the market average is less than 4%. To my knowlege less than 5 stocks have 7%+ forward dividend yield in the entire market for now. In addition, the fwd PE ratio of Access is less than 9, another plus.

I bought a few today. My next entry is when it gets close to N10 or lower depending on market dynamics at that time.

I don't quite agree. 12% for a convertible debenture is far better than that found in the money market of 13% (which I assume are not convertible, putable, exchangeable or callable). I agree that it may be risky because it is not a secured bond with chances of default. The issue is that the 12% value is the zero volatility value that was arrived at after the deduction of the option value. The Option call value of the debenture is not likely to be less than 5%, considering the volatility of the market, meaning that the real value (option adjusted value) of the debenture is not less than 17%+.

I still believe that the debenture is a good buy and cannot be compared with that of the rights issue noting the way the stock market is at the moment. We all know that the value of Crusader could have dropped below N4.50 long ago if not for the technical suspension.

[Michael]

Gents & Ladies, Do you realize that there is a lot of money in Mutual funds, Private equity, Insurance Premiums, Investment clubs etc stuck on the sidelines, waiting to take a plunge, some of them have promised their subscribers mouth watering returns.
Eventually these funds will have to get into the market. When this happens the stocks that appear difficult to sell now, will be equally difficult to buy. The Only question now is when?

[knightofdelta]

Originally Posted by Michael

Gents & Ladies, Do you realize that there is a lot of money in Mutual funds Private equity, stuck on the sidelines, waiting to take a plunge, some of them have promised their subscribers mouth watering returns. Eventually they have to get into the market.
When this happens the stocks that appear difficult to sell now, will be equally difficult to buy. The Only question now is when?

Hmm.. food for thought. That must be the reason mutual funds have been proliferating over the past few months... just gathering the money to take the dive. Maybe we should start our own at SMN too.

[Michael]

Originally Posted by knightofdelta

Hmm.. food for thought. That must be the reason mutual funds have been proliferating over the past few months... just gathering the money to take the dive. Maybe we should start our own at SMN too.

SMN Mutual Fund Mission Statement "to beat the Pants off all Professional money managers and mutual funds within the country".

Sounds like something worth doing.

[hispy99]

Originally Posted by zainabusman

We have 19 consecutive negative trading days (from Sep 4 to date). Value of transaction has been drying up with September as the worst in trading value for the year so far.

Cummulative trading for Oct 2 & 3 has been less than N4 billion. No buyers in sight.

The Index is now down 21.2% for the year and down 31.1% from its peak in March. It is gloomy all round with no buyers in sight.

Unless something happens to stop the decline we would be back to the low of the year achieved on August 26th within the next 10 trading days.

It appears our regulators have run out of ideas. There was no positive movement after the announcement of the last measures by CBN.

At some point the market will find its level. In the meantime we wait. The strong at heart can look for bargains. Afterall once the stocks reach 99k they cant fall again under the 1% rule.

Guess people have lost a lot of wealth in the last 6 months.

[citizen]

No financial bailout for ailing Nigerian stock market – Soludo
Written by Luka Binniyat & Shaibu Inalegwu
Saturday, 04 October 2008
The Governor of Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, has said that the Federal Government is not going to commit a kobo as financial bailout for Nigerian ailing stock market, saying government has no business in carrying out such intervention.
He claimed Nigerian banks are still financially sound. He also foreclosed the idea of a Stabilisation Fund for the Nigerian Capital market, as floated by some industry players.

Soludo stated this at the second Townhall Meeting of Thisday held in Abuja yesterday.
Also speaking at the event, the former US Secretary of Treasury, and President, Harvard University, Lawrence Summers, has regretted that though Nigeria was ranked the highest above newly independent third world countries to emerge as a global economy, several decades of mismanagement has let Nigerians to having one of the poorest living standards in the world.

The Managing Director (MD) of the Oceanic Bank, the sponsors of the Town Halll Meeting, Mrs. Cecelia Ibru, in her submission, attributed the crisis in the Nigerian Stock market banks divestment into infrastructural development and mortgage, thus pulling out huge liquid from the market that has led to 30% lost of its value.

But, Soludo had argued that that Nigerian monetary policies have been fine-tuned such that banks can draw huge sums from their deposits at the CBN and shore up the capital market without government giving a financial lifeline like is done in the US.

“Government is not going to do that now, and not in the foreseeable future”, he said.
Speaking further, he explained that the reason for the current crisis in Nigerian stock market is not far fetched. “The reason is simple, giving the credit crunch in the advanced industrial world”, he said, “several of the institutional investors in those advanced markets began to pull out of our own markets about five months ago”.

That is the origin of our own crisis here.. People were just busy not discussing the problem but looking for scapegoat – maybe somebody stopped the margin trading . . . they were just looking for scapegoat and not advancing the problem.

“The origin of the problem is the credit crunch that started globally and the institutional investors were then pulling out from Nigeria in order to service their facilities elsewhere. This led to stock prices going down and, as it went down, most of the investors in the Nigerian market are new and they are there for the short time. Some of them are there mostly for speculative purposes and so they began to sale”, he said.

“That triggered off two quick reactions”, posited the CBN Governor.

“The first reaction was the panic response on the part of all the stakeholders _ the Banks panicked by calling_in the existing facilities; the participants in the market panicked by also selling quickly to repay their loans. And so you found a situation where the Banks stopped new credit line going into the market, they were calling_in existing facilities.

And those who were already panicky wanted to get out of the market and there was only one way the market could go and that is the decline. And I think is very, very important that we understand how we got to where we are in other for us to begin to think about how we make progress”, he said.

On the way out, he suggested that the US that triggered off the crisis should have a disproportionate share of actions in terms of getting the world out of the crisis.

“And that is why the whole world is watching, waiting to see what the US does with regards to getting or at least triggering off a recovery from the global crisis”, he said.

But, Ibru in her short submission, told the gathering that Nigerian Banks hold about 60% of the capital market, because at the time of the Consolidation of Banks, activities in the other sectors of the economy where not so virile for investment.

“Today the Banks have about 14 million housing shortfall to fund with State Governments”, she said. “we are heavily investing in oil and gas and there are huge amount of money going into financing projects in Roads, Water, Bridges, Agriculture and many other areas of Public Private Partnership than ever”, she said, “so the banks have to move their resources to these areas”, she said.

“I think what is happening is not so strange. I believe that the market will naturally find an equilibrium very soon”, she said

Alh. Aliko Dangote, Chairman Dangote Group of Companies

[citizen]

So we can all see why they will be no end to this stock market crisis. The foreign investors are out and the banks have gone into oil and gas, real estate.
Sorry guys

[dannynoko]

Originally Posted by zainabusman

We have 19 consecutive negative trading days (from Sep 4 to date). Value of transaction has been drying up with September as the worst in trading value for the year so far.

Cummulative trading for Oct 2 & 3 has been less than N4 billion. No buyers in sight.

The Index is now down 21.2% for the year and down 31.1% from its peak in March. It is gloomy all round with no buyers in sight.

Unless something happens to stop the decline we would be back to the low of the year achieved on August 26th within the next 10 trading days.

It appears our regulators have run out of ideas. There was no positive movement after the announcement of the last measures by CBN.

At some point the market will find its level. In the meantime we wait. The strong at heart can look for bargains. Afterall once the stocks reach 99k they cant fall again under the 1% rule.

Lets hope that the resolution of the US financial impasse will impact the naija market for a turn around. We need some prayerful mind to pick up the tab now

[ayemco]

Originally Posted by waaan5

Agreed. And I doubt if this package would do much again as the politicians have 'sweetened' the thing too much just to make it pass. The alarm for Nigeria in my mind should be in the continued fall in energy prices and the safety of the foreign reserves. Crude prices fell into the $94s just recently.

Does anyone know where the Nigeria's much parrotted 'foreign reserves' are invested? The last I heard was Soludo sharing some of it with hurriedly arranged Nigerian-Western banks forex management partnerships. Where did they invest those? We should all be concerned because we are 'blessed' with such 'high quality' economic managers in the country who are so vast that there can afford to put the economy in auto pilot and still obtain single digit inflation rates and double-digit growth rates.

Waan5, Wise talk again from you. Somewhere I went through a least of Banks which manage the Reserves luckily we are not loooking too bad for now. The worst of the lot I would say is with Mogan Stanley I think and they are now turning into a full fledged bank.

Like you said people are now moving into property for now thats why the thread here is a bit light. The real Estate thread has been active for a while. However, people have so much tied up in the Capital Market and would incur severe losses selling now. Its an individual thing though but where I have made at least 40% per annum on a stock (Capital appreciation and Dividend) over the past 3 -4 years I am selling. No point being optimistic at this Cap Market. It may take a while. Good property bought in choicy estates in Lagos and P/H I believe is the way. Where I have losses I am not selling, luckily they are in stocks with good Fundermentals like GTB, IBTC, Union Bank, etc which will still give bonuses and dividend anyway. Just my thought.

[knightofdelta]

I got this excerpt from Citizen's post in Nigerian Breweries. All I could say after reading this was yikes!!...

Summers, in his emotional argument, said, “I have spent sometime in Nigeria. So, I have very good knowledge about the country. Your country is well placed and is very successful in oil resources. If you look at the history of your country; there have been periods where oils prices have risen and the amount of money, which your country has earned since then from the sale of oil is more than any other country can accomplish and is worth many opportunities of uplifting the sufferings of the people. But it has not been so.

“Most of the oil windfall that has come into your country, when you look at living standard in Nigeria, of the average Nigerian, one does not see the kind of prosperity which one wants to see. When I came to Nigeria in 1991, I remarked at that time on the very different economic trajectories of Nigeria and Indonesia. When I went to school in the United States in the 1960s, we saw Nigeria as a country with far brighter prospects than Indonesia, but that is not the true state now.

“Your next generation of children should live far better than this generation of children. We should think about the future of Africa and the future depends on two countries - South Africa and Nigeria. South Africa has it challenges, you have yours, but you are blessed with tremendous moments of opportunities in terms of what is happening in the world today; and I pray to God that your society uses the tremendous opportunities of high oil prices today to make immense difference in the lives of millions of children alive today and the millions of children who will inherit your country in the nearest future.”