MarketWatch

[ttoladele]

Originally Posted by kenebobo

Some stocks in my portfolio are begining to turn positive at last. I wonder why people dey complain about NSE recent action. To me its for our own good

On the contrary, this action flies in the face of competition since the freeze was not in both directions, I think it is dubious and makes mockery of the essence of the whole market itself. It undermines the natural law of demand and supply, the market will eventually pay the price, when i do not know. Allowing the stocks to find their fair price would have eventually attracted the Bulls, hence a more manageable recovery. Will this action be seen in good light by local and foreign Investors looking to invest in the market at the right time? It is another panic response by the NSE, i hope lessons will be learnt by NSE, SEC and CBN,from all this shenanegans .

[riskreturn]

Originally Posted by ttoladele

On the contrary, this action flies in the face of competition since the freeze was not in both directions, I think it is dubious and makes mockery of the essence of the whole market itself. It undermines the natural law of demand and supply, the market will eventually pay the price, when i do not know. Allowing the stocks to find their fair price would have eventually attracted the Bulls, hence a more manageable recovery. Will this action be seen in good light by local and foreign Investors looking to invest in the market at the right time? It is another panic response by the NSE, i hope lessons will be learnt by NSE, SEC and CBN,from all this shenanegans .

What is the concern of CBN in this wahala? Is it responsible for capital market regulation or what? It is not even responsible for the rumour concerning stoppage of margin trading.

[threecrown]

Anything that forced to go up may also come down with a greater force.
the panic selling may stop, but because of the little appreciation, others will want to make profit so the selling continues. the later may be worse than the former. the stock market is a free trading zone so buying and selling should have been left to find a common ground as usual.

[saidone technology limit]

al Rossa,

Wetin u think 4 this thing self ? abi na only look look we go do ?

e bi like this people are playing with our hard earn currency.

[XXCASH]

Great Invetors,

What's your take on this shrare buy back scheme. I think it's a fantatic idea if implemented properly with all the necessary checks and balances.

There is light at the end of the tunnel for sure. Just wait and see what happens in the next one month.

[kenebobo]

Does anyone know how long the intervention will last?

[XXCASH]

National Assembly, SEC, NSE to facilitate share buy-back
Posted Tuesday, June 10, 2008

The National Assembly, Securities and Exchange Commission and the Nigerian Stock Exchange have agreed to work together towards the introduction of share buy—back in the capital market.

Ganiyu Solomon, Senate Committee chairman on capital market, speaking at the 2008 international conference of the Independent Shareholders Association of Nigeria held in Abuja on June 7, 2008, said that "the Nigerian National Assembly will try and work with the Nigerian Capital Market and the Securities and Exchange Commission, including other relevant agencies to ensure that that the provision of the companies and allied matter on the share buy-back is amended to enable companies repurchase their share from the shareholders".

On a similar note, Musa Alfaki, the director-general of the Securities and Exchange Commission (SEC) said that "in recent years, many companies have been repurchasing their own shares as a way of strengthening its capacity and operational efficiency".

He was of the opinion that share buy-back would enhance wealth creation and in effect, broaden the nation’s capital market as the introduction of a share repurchase strategy has traditionally been undertaken as an efficient way of increasing the company’s equity ratio. The concept of share buy—back is a situation in which a company repurchases its share into its fold. Some of the investors who spoke with Business Day expressed optimism that the scheme, if approved by the National Assembly, would create an opportunity for the advancement of the nation’s capital market.They said that the scheme is operational in some African countries like Ghana and Cote d’ivore, which had led to the rapid development being witnessed in those economies.

Erastus Akingbola, group managing director of intercontinental Bank, who represented the director general of the Nigerian Stock Exchange, speaking at the occasion, expressed confidence in the inherent benefits accruable to the Nigerian investors if the share buy-back scheme is introduced in the country.

He therefore called on the members of the National Assembly to facilitate the amendment of the Companies and Allied Matters of (1990) to facilitate the introduction of this scheme in the country.

Sunny Nwosu, national coordinator of Independent shareholders association of Nigeria, told participants at the event that "the financial sector threw up a lot of challenges in the management of consolidated shares as well as sustained returns to investors as the entry of more than ten million new shareholders during the consolidation period has led ISAN to accept the challenge of injecting life through mobilization of experts to discuss extensively and proffer solution to the various challenges facing the Nigerian investors". - BusinessDay


Hmmm, Erastus represented the NSE Boss. Can this be the reason for the poor dividend payout so that they make funds available for this scheme.
If you had noticed intercontinental Bank traded large quantites just before they announced their result. Who was actually buying this. Please ooh, no conclusions yet.

Personally I like Alfaki. I believe that he is one chap that places investors interest first.

Like i said earlier, let's wait and see.

[Michael]

Originally Posted by XXCASH

Great Invetors,

What's your take on this shrare buy back scheme. I think it's a fantatic idea if implemented properly with all the necessary checks and balances.

There is light at the end of the tunnel for sure. Just wait and see what happens in the next one month.

Share buy back is a good thing If Implemented properly and a bad thing If abused. the Only time share buy back is good for the Investors is when the Investment in the companies own shares is better than Investing in the companies core business. This will only occur when The companies shares are cheap in valuation compared to the intrinsic value of the company in the eyes of its management.

With current prices of stocks some companies should be buying their own stocks back, even if for only investment purposes. This also has its own benefit to management, in that it deters corporate raiders who would want to engage in a leveraged buyout of cheap companies. We have not seen much of this in Nigeria, but It will come!

I hope this answers your question

[balaliyu]

The market intervention is definitely very worng, and indicates that the forces of demand and supply which are to objectively determine the realistic prices of stocks (at any given day) are manipulated.

Think about this, does the temporary freeze in free-fall actually increase the average investor's confidence in the market, or does it lead to reappraisal of portolio for a quick exit....? My point is this kind of action only causes more panic, because it cofirms that even the regulators have panicked....and if the regulators have panicked...oh..boy...the investors will have to run fi cover.

Bad move!!!

Cheers...B

[Michael]

Originally Posted by XXCASH

National Assembly, SEC, NSE to facilitate share buy-back
Posted Tuesday, June 10, 2008

The National Assembly, Securities and Exchange Commission and the Nigerian Stock Exchange have agreed to work together towards the introduction of share buy—back in the capital market.

Ganiyu Solomon, Senate Committee chairman on capital market, speaking at the 2008 international conference of the Independent Shareholders Association of Nigeria held in Abuja on June 7, 2008, said that "the Nigerian National Assembly will try and work with the Nigerian Capital Market and the Securities and Exchange Commission, including other relevant agencies to ensure that that the provision of the companies and allied matter on the share buy-back is amended to enable companies repurchase their share from the shareholders".

On a similar note, Musa Alfaki, the director-general of the Securities and Exchange Commission (SEC) said that "in recent years, many companies have been repurchasing their own shares as a way of strengthening its capacity and operational efficiency".

He was of the opinion that share buy-back would enhance wealth creation and in effect, broaden the nation’s capital market as the introduction of a share repurchase strategy has traditionally been undertaken as an efficient way of increasing the company’s equity ratio. The concept of share buy—back is a situation in which a company repurchases its share into its fold. Some of the investors who spoke with Business Day expressed optimism that the scheme, if approved by the National Assembly, would create an opportunity for the advancement of the nation’s capital market.They said that the scheme is operational in some African countries like Ghana and Cote d’ivore, which had led to the rapid development being witnessed in those economies.

Erastus Akingbola, group managing director of intercontinental Bank, who represented the director general of the Nigerian Stock Exchange, speaking at the occasion, expressed confidence in the inherent benefits accruable to the Nigerian investors if the share buy-back scheme is introduced in the country.

He therefore called on the members of the National Assembly to facilitate the amendment of the Companies and Allied Matters of (1990) to facilitate the introduction of this scheme in the country.

Sunny Nwosu, national coordinator of Independent shareholders association of Nigeria, told participants at the event that "the financial sector threw up a lot of challenges in the management of consolidated shares as well as sustained returns to investors as the entry of more than ten million new shareholders during the consolidation period has led ISAN to accept the challenge of injecting life through mobilization of experts to discuss extensively and proffer solution to the various challenges facing the Nigerian investors". - BusinessDay


Hmmm, Erastus represented the NSE Boss. Can this be the reason for the poor dividend payout so that they make funds available for this scheme.
If you had noticed intercontinental Bank traded large quantites just before they announced their result. Who was actually buying this. Please ooh, no conclusions yet.

Personally I like Alfaki. I believe that he is one chap that places investors interest first.

Like i said earlier, let's wait and see.

XXCASH,
If what Intercontinental is doing is a share buyback, then its shareholders are either in bigger trouble than they know. Or The management knows more than he is telling us. They should rather use that Money to buy GTB shares instead of propping up the Intercontinental price which has to come down sooner or later.

[Michael]

Originally Posted by balaliyu

The market intervention is definitely very worng, and indicates that the forces of demand and supply which are to objectively determine the realistic prices of stocks (at any given day) are manipulated.

Think about this, does the temporary freeze in free-fall actually increase the average investor's confidence in the market, or does it lead to reappraisal of portolio for a quick exit....? My point is this kind of action only causes more panic, because it cofirms that even the regulators have panicked....and if the regulators have panicked...oh..boy...the investors will have to run fi cover.

Bad move!!!

Cheers...B

If you read about Investment History you will discover that it is not new for regulators to Intervene in the stock market. I even read a story about how JP Morgan intervened on behalf of Wall street to stop a bear market in the U.S. Would you rather they let the market collapse to the point where companies go broke and start sacking their employees due to the ecessive exposure to Nigerian Investments? Or should we sell our Investments in our country and invest abroad instead? Pick your choice? The Margin Pronouncement was their mistake, to correct it becomes their problem. Meanwhile for those of my friends who have never experienced a bear market before. Big Ups to your education

[knightofdelta]

Originally Posted by Michael

XXCASH,
If what Intercontinental is doing is a share buyback, then its shareholders are either in bigger trouble than they know. Or The management knows more than he is telling us. They should rather use that Money to buy GTB shares instead of propping up the Intercontinental price which has to come down sooner or later.

My sentiments exactly.

Nigerians are too sharp. You leave just a little loophole and they will capitalize on it to the max. Let us paint a little secnario to demonstrate what this buy back thing can cause if it is not properly regulated and just left open for these sharp guys to tinker with.

Bank X has 30 billion units shares in issue. This bank has a lot of money to invest since it was able to raise money to increase the number of shares from 10 billion to 30 billion. This bank waits for people to verify the shares and to start offloading. The price starts coming down and then they buy little by little, using the money they raised, of course. It will get up to a point that there will be some kind of scarcity and then the price will start appreciating. Then they start offloading little by little and ignorant investors starts buying from them. Suddenly... WHAM! they dump plenty of stocks into the market and the price comes crashing. Nobody will be interested in buying and then they start the whole process of buying little by little again. At this point they release their results, which is fantastic (simply because they made money by buying their own shares low and selling high). Then investors start looking for their shares but they are scarce because Bank X has bought plenty of them and is keeping. The price starts to rise again and then before you know it they start selling.

The regulatory bodies should just make sure they plug all the loopholes like restricting them to like 5 - 15% of the shares available, before approving that idea.

Maybe I should do a PP and start my own bank too.

[hispy99]

Originally Posted by Michael

If you read about Investment History you will discover that it is not new for regulators to Intervene in the stock market. I even read a story about how JP Morgan intervened on behalf of Wall street to stop a bear market in the U.S. Would you rather they let the market collapse to the point where companies go broke and start sacking their employees due to the ecessive exposure to Nigerian Investments? Or should we sell our Investments in our country and invest abroad instead? Pick your choice? The Margin Pronouncement was their mistake, to correct it becomes their problem. Meanwhile for those of my friends who have never experienced a bear market before. Big Ups to your education

I don't understand this point about companies sacking workers, could you please explain? How did JP Morgan intervene to stop the bear market? By "fixing" prices? If you are referring to the "panic" of 1907, then this link will shed some light: Panic of 1907 - Wikipedia, the free encyclopedia. I do not see anywhere it says stock prices were not allowed to go down by decree or fiat.

[zainabusman]

Originally Posted by Michael

If you read about Investment History you will discover that it is not new for regulators to Intervene in the stock market. I even read a story about how JP Morgan intervened on behalf of Wall street to stop a bear market in the U.S. Would you rather they let the market collapse to the point where companies go broke and start sacking their employees due to the ecessive exposure to Nigerian Investments? Or should we sell our Investments in our country and invest abroad instead? Pick your choice? The Margin Pronouncement was their mistake, to correct it becomes their problem. Meanwhile for those of my friends who have never experienced a bear market before. Big Ups to your education

Regulators can intervene but not in this manner.

There is absolutely no justification for stopping stocks from falling when u allow them to rise. If the are so scared, they should have stopped both a rise and fall until they sort out the problem.

I cant believe also all this noise about margin trading causing this sell off. The fact of the matter is liquidity dried up. Which is what typically happens at the top of the market. Most people are already fully invested with or without margin. There were therefore few new entrants to push up the price. Furthermore a lot of stocks were selling at valuations that could not be justifiied.

In the next few days until this embargo on a fall in price is lifted if u have Investment and Allied Ins, Intercontinental etc u are probably stuck. This stocks have closed on full bid yesterday and today. There are no buyers. So although the price wont fall u cant off load and move on. Unfortunately they cant force people to buy.

What i want to see SEC and NSE doing is enforcing the rules and also making rules that make sense. Not this panic intervention.

For example why dont they sanction companies that refuse to release their accounts for several qtrs? Look at Transcorp. They have never issued any result since the listing.

What of the issue of PO's and return money. Several billions are stuck with Zenith, PHB, Skye etc. This in my view also affected liquidity of investors. They should sanction companies who sit on investors money. PHB is sitting on our money and nobody is doing anything about it.

They coulld also require disclosure when insiders (directors) buy and sell. Directors of companies in Nigeria are having a field day. Buying and selling with insider information. Insider trading is a criminal offence in some countries.

On Margin, they can come up with guidelines such as the minimum contribution by the investor etc.

In the future also, they should nip rumours in the bud. This margin thing has been in the news for months. It is only now that CBN is saying it is a rumour. This should have been cleared up since.

There are so many things they can do to make our life easier.

I would like to add that the market was down only 3% for the year on Friday, yet the NSE panicked. Are we saying the market should never be in the red?

The lesson i have learnt from this is to make sure my risk management is spot on. My retirement is riding on this market, but with this attitude from NSE i better invest more in real estate. One day NSE might decide the market is to high and halt a rise. I wonder what we will all be writing should this happen.