MarketWatch

[Babs_O]

Originally Posted by hispy99

Panicked? After a 3% YTD loss? So what do you think will happen once the 1week freeze expires and prices continue to drop? Another freeze? I hope you will come to their defense the day they prevent the price of stocks from going up, but they allow prices to go down, because it seems anything can happen

Perhaps they need the freeze for summer offloading season. If so it should last at least a month. After which it may fall further or margin loans will be up to send it up. For now we may have a goat run (goat get horn like bull now)

[XXCASH]

First of all, we should understand that Nigeria is growing in all sectors and people are bound to make mistake (no excuse for madam NSE)
Secondly, foreign investors are going no where. Why haven't they left Niger Delta after all the troubles. Bottom line is Nigeria is a wonderful place to do business in terms of return on investment.
Finally SEC is very much aware of the dangers in this Share repurchase scheme and would definetly put in systems to check this.
We need to give these guys a break, every single Nigerian has come to realise that he/she is a stakeholder and should do their bit to see this things move forward. Sometimes we are faced with the competence of the people on top of these things.
Before now people sit on your money and return them back without any interest that is the POs. Now it comes with interest and the next would be .....


Benefits of share repurchase, by SEC
Posted Tuesday, June 10, 2008

Director-General of the Securities and Exchange Commission (SEC), Musa Al-Faki has declared that share repurchase was capable of enhancing wealth creation while also broadening the scope of the nation's capital market.

Al-Faki stated this during an international conference organised by the Independent Shareholders' Association of Nigeria (ISAN), held recently in Abuja.

Speaking in his keynote address on the theme of the conference, "Share buy-back: How desirable"? Al-Faki said that although, the concept of share buy-back as practice or strategy would require the necessary statutory framework to prevent its possible abuses.

Specially, he said that share-buy-back otherwise known as share repurchase had generally been rebuked for being a tool by which management could illegally manipulate their companies share price through mopping, thereby creating artificial scarcity in the market and subsequent price increase.

Besides, he explained that the availability of excess cash could make company decide to repurchase its shares in order to return the 'excess' capital to shareholders.

He, however, maintained that this reason had been undermined by the argument that companies could achieve many of the same objectives through the payment of special dividends.

"A special dividend is one paid to all shareholders besides the normal interim and final dividend. Companies may pay special dividend to reduce their excess cash and not adopting the share buy-back strategy," he said.

The director general argued that even the capital market reaction to share buy-back could not be underrated, because the stock market reacted positively to the announcement of share repurchase.

According to him, investors were often relieved to see companies using the cash for a buy-back rather than spending it on value destroying projects.

"A research by Comment and Jarrel (1991), indicates that the announcement or a share buy-back leads to a two per cent increase in the company's share price," Al-Faki stressed.

On how the trend started, the SEC boss said that in the recent years, more and more companies had been repurchasing their own shares. And it was first started in the United States of America (U.S.A), and later spread to the United Kingdom, while it is now becoming more prevalent in Europe.

The UK example according to him included Reuters Plc that repurchased £350m of its shares in 1993, representing nearly six per cent of its total ordinary share capital.

Others, he said, included British Petroleum (BP) Amoco with two buybacks in 2000 and more recently, Vodafone Plc's aggressive buy back strategy in 2003.

Under a buy-back, a company purchases its own shares from its shareholders, and shares bought are cancelled, thereby reducing the number of shares on issue.

Also speaking, the national Co-ordinator of ISAN, Mr. Sunny Nwosu said that the entry of more than 10 million new shareholders during the consolidation period, informed the decision of ISAN to be proactive by injecting life into the provisions of the companies and Allied Matters Act (AMA) of 1990 and the new investment and Securities Act of 2007.

Besides, he said that share buy-back was not organised by ISAN, adding that the subsisting CAMA Act, specifically section 161 has always housed share buy-back, as an investment option.

Although, he added that the dormancy of the provisions once tested about 12 years ago by one of the nation's commercial banks, noting that the inept bureaucracy and poor articulation strategies of the workings of the investment window by the regulators made it impossible for ISAN to reap from it.- Guardian
ally, SEC has a

[hispy99]

Another explanation for the "no down movement"

http://punchontheweb.com/Articl.aspx...20080611246314

Why there are no price losers –NSE
By Yemi Kolapo, Obinna Chima and Udeme Ekwere
Published: Wednesday, 11 Jun 2008
The Nigerian Stock Exchange on Tuesday, explained the unusual disappeaance of the bears from the stock market, saying that it was only implementing a policy to ensure that a stock must trade a minimum of 100,000 units before its price could move up or down.

The rather unusual scenario of 31 stocks gaining in price at the stock market on Monday and none losing had stirred up speculations that the NSE had imposed a freeze on the downward movement of stock prices to get round the consistent bearish trend in the market.

The Principal Manager, Corporate Affairs, NSE, Mr. Sola Oni, in an interview with our correspondents in Lagos on Tuesday, said before the implementation of the policy, a stock usually had 5,000 units traded before its price could move. This, he said, later increased to 15,000 units.

He explained that the new policy, which was announced two weeks ago, was to guide against frivolous pricing of shares and to promote market liquidity.

“In this regard, companies must sell 100,000 units of shares and above. This is essentially what is having effect on the share prices, which is why the market did not record any losses on Monday,” he said.

On Tuesday, 43 price gainers were recorded as against 31 on Monday, but again, there were no losers.

Investors had been apprehensive of the persistent significant price losses in the capital market in recent times.

This had been linked to the alleged Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.

But the CBN Governor on Monday refuted the allegation, saying that the apex bank gave no such directive.

He said that the banks’ lending to customers to acquire shares had not reached the level that would warrant intervention by the CBN.

The Chief Operating Officer, Arain Capital Limied, Mr. Akin Akerodolu-Ale, who described the current situation as a delicate one, confirmed that there was no freeze on the prices of stocks.

He, however, urged investors to seize this opportunity to stake more of their funds in shares.

Akeredolu-Ale said, “This is one of the best weeks to buy shares. Some people will be made millionaires under the current situation. The stock market is healthy and all its fundamentals are on the positive side.

“Most of the results posted to the Exchange have been positive, so there is no need for any anxiety. For us to see some stocks depreciate in price is normal and the situation will soon be reversed.”

A former President, Nigerian Institute of Management and Director, Research International, Chief Lugard Aimiuwu, said regulators must be careful to carry investors along when making decisions that affected their investments.

Speaking in an interview with our correspondents on Tuesday, Aimiuwu warned that the turbulence going on across the global stock markets could be avoided if good corporate governance structures were in place to make all market operators conform to ethical and best practices.

He said that the Nigerian stock market was still developing, adding that it was not yet matured to be fully judged on the scale of perfection

[hispy99]

Originally Posted by hispy99

Another explanation for the "no down movement"

The Punch: Why there are no price losers –NSE

Why there are no price losers –NSE
By Yemi Kolapo, Obinna Chima and Udeme Ekwere
Published: Wednesday, 11 Jun 2008
The Nigerian Stock Exchange on Tuesday, explained the unusual disappeaance of the bears from the stock market, saying that it was only implementing a policy to ensure that a stock must trade a minimum of 100,000 units before its price could move up or down.

The rather unusual scenario of 31 stocks gaining in price at the stock market on Monday and none losing had stirred up speculations that the NSE had imposed a freeze on the downward movement of stock prices to get round the consistent bearish trend in the market.

The Principal Manager, Corporate Affairs, NSE, Mr. Sola Oni, in an interview with our correspondents in Lagos on Tuesday, said before the implementation of the policy, a stock usually had 5,000 units traded before its price could move. This, he said, later increased to 15,000 units.

He explained that the new policy, which was announced two weeks ago, was to guide against frivolous pricing of shares and to promote market liquidity.

“In this regard, companies must sell 100,000 units of shares and above. This is essentially what is having effect on the share prices, which is why the market did not record any losses on Monday,” he said.

This statement (if it is true) in my opinion is shameless. Disinformation will not help anybody.

[billions]

Originally Posted by hispy99

Another explanation for the "no down movement"

The Punch: Why there are no price losers –NSE

Why there are no price losers –NSE
By Yemi Kolapo, Obinna Chima and Udeme Ekwere
Published: Wednesday, 11 Jun 2008
The Nigerian Stock Exchange on Tuesday, explained the unusual disappeaance of the bears from the stock market, saying that it was only implementing a policy to ensure that a stock must trade a minimum of 100,000 units before its price could move up or down.

The rather unusual scenario of 31 stocks gaining in price at the stock market on Monday and none losing had stirred up speculations that the NSE had imposed a freeze on the downward movement of stock prices to get round the consistent bearish trend in the market.

The Principal Manager, Corporate Affairs, NSE, Mr. Sola Oni, in an interview with our correspondents in Lagos on Tuesday, said before the implementation of the policy, a stock usually had 5,000 units traded before its price could move. This, he said, later increased to 15,000 units.

He explained that the new policy, which was announced two weeks ago, was to guide against frivolous pricing of shares and to promote market liquidity.

“In this regard, companies must sell 100,000 units of shares and above. This is essentially what is having effect on the share prices, which is why the market did not record any losses on Monday,” he said.On Tuesday, 43 price gainers were recorded as against 31 on Monday, but again, there were no losers.

Investors had been apprehensive of the persistent significant price losses in the capital market in recent times.

This had been linked to the alleged Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.

But the CBN Governor on Monday refuted the allegation, saying that the apex bank gave no such directive.

He said that the banks’ lending to customers to acquire shares had not reached the level that would warrant intervention by the CBN.

The Chief Operating Officer, Arain Capital Limied, Mr. Akin Akerodolu-Ale, who described the current situation as a delicate one, confirmed that there was no freeze on the prices of stocks.

He, however, urged investors to seize this opportunity to stake more of their funds in shares.

Akeredolu-Ale said, “This is one of the best weeks to buy shares. Some people will be made millionaires under the current situation. The stock market is healthy and all its fundamentals are on the positive side.

“Most of the results posted to the Exchange have been positive, so there is no need for any anxiety. For us to see some stocks depreciate in price is normal and the situation will soon be reversed.”

A former President, Nigerian Institute of Management and Director, Research International, Chief Lugard Aimiuwu, said regulators must be careful to carry investors along when making decisions that affected their investments.

Speaking in an interview with our correspondents on Tuesday, Aimiuwu warned that the turbulence going on across the global stock markets could be avoided if good corporate governance structures were in place to make all market operators conform to ethical and best practices.

He said that the Nigerian stock market was still developing, adding that it was not yet matured to be fully judged on the scale of perfection

I dont know who these people are trying to decieve...they are just making d situation worse!

[Avocado]

Originally Posted by tobenna

Don't get me wrong, I'm seriously losing money - roughly 13% now. But it seems as if some top-shot somewhere has lost more money than they can handle and has called Ndi-Okereke or whoever to freeze downward movement. To me, thats what this is.

I have lost all confidence.

You haven't lost money until you have sold at a loss; And, as a few other efforts have failed (the flawed 100,000 units rule did not work 100%), it's clear all prices aren't frozen. Engineering the stock market in this manner is a poor and inferior choice.
.

[zainabusman]

This will have a huge impact on the marketing of PP's. From page 73 of todays guardian. A public announcement by NSE.

“hereby informs companies seeking listing on the exchange by way of introduction that henceforth such shares shall be listed at the private placement price and will also meet the listing requirements, rules and regulations governing IPO in the best interest of the investing public."

So members buying PP's at a premium are taking a huge risk.

[XXCASH]

Originally Posted by hispy99

Another explanation for the "no down movement"

The Punch: Why there are no price losers –NSE

Why there are no price losers –NSE
By Yemi Kolapo, Obinna Chima and Udeme Ekwere
Published: Wednesday, 11 Jun 2008
The Nigerian Stock Exchange on Tuesday, explained the unusual disappeaance of the bears from the stock market, saying that it was only implementing a policy to ensure that a stock must trade a minimum of 100,000 units before its price could move up or down.

The rather unusual scenario of 31 stocks gaining in price at the stock market on Monday and none losing had stirred up speculations that the NSE had imposed a freeze on the downward movement of stock prices to get round the consistent bearish trend in the market.

The Principal Manager, Corporate Affairs, NSE, Mr. Sola Oni, in an interview with our correspondents in Lagos on Tuesday, said before the implementation of the policy, a stock usually had 5,000 units traded before its price could move. This, he said, later increased to 15,000 units.

He explained that the new policy, which was announced two weeks ago, was to guide against frivolous pricing of shares and to promote market liquidity.

“In this regard, companies must sell 100,000 units of shares and above. This is essentially what is having effect on the share prices, which is why the market did not record any losses on Monday,” he said.

On Tuesday, 43 price gainers were recorded as against 31 on Monday, but again, there were no losers.

Investors had been apprehensive of the persistent significant price losses in the capital market in recent times.

This had been linked to the alleged Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.

But the CBN Governor on Monday refuted the allegation, saying that the apex bank gave no such directive.

He said that the banks’ lending to customers to acquire shares had not reached the level that would warrant intervention by the CBN.

The Chief Operating Officer, Arain Capital Limied, Mr. Akin Akerodolu-Ale, who described the current situation as a delicate one, confirmed that there was no freeze on the prices of stocks.

He, however, urged investors to seize this opportunity to stake more of their funds in shares.

Akeredolu-Ale said, “This is one of the best weeks to buy shares. Some people will be made millionaires under the current situation. The stock market is healthy and all its fundamentals are on the positive side.

“Most of the results posted to the Exchange have been positive, so there is no need for any anxiety. For us to see some stocks depreciate in price is normal and the situation will soon be reversed.”

A former President, Nigerian Institute of Management and Director, Research International, Chief Lugard Aimiuwu, said regulators must be careful to carry investors along when making decisions that affected their investments.

Speaking in an interview with our correspondents on Tuesday, Aimiuwu warned that the turbulence going on across the global stock markets could be avoided if good corporate governance structures were in place to make all market operators conform to ethical and best practices.

He said that the Nigerian stock market was still developing, adding that it was not yet matured to be fully judged on the scale of perfection

As for me, highlighted in bold is the biggest problem in Nigeria and not just the stock market. I know i have said this severally on this forum.

As for the claimed rule that prevented prices from going down, hmmmm I would reserve my comments for now. Don't want to stir up an anxiety.

[zainabusman]

This will have a huge impact on the marketing of PP's. From page 73 of todays guardian. A public announcement by NSE.

“hereby informs companies seeking listing on the exchange by way of introduction that henceforth such shares shall be listed at the private placement price and will also meet the listing requirements, rules and regulations governing IPO in the best interest of the investing public."

So members buying PP's at a premium are taking a huge risk.

[kenebobo]

I dont understand what is happening any longer. Initially i thought they put a freeze on all down trend now it is a policy that a stock must trade a minimum of 100,000. Anyway they should be careful.

[olusolakemmy]

zainab, your reaction was just same as mine when i saw the news of market intervention in tuesday puch news.
my question was, what nonsense????????????

then i realised that, some of the so call regulators are also shareholders in most companies that have witness severe price loss, hence they have to do something to mitigate their losses and give us a picture that they are protecting us all, hence i will call this downward freezing or market intervetion price fixing!!!!!!!!!!

no logical explanation to support the action!!!!!!!!!!!!!!

what you are telling me is that i can only buy if i accept to pay above the friday closing prices or same, what is that?
well, i really think, they will see the effect of their action by next week, because the freezing will last for one week.

[olusolakemmy]

i expect some people to be excited about the price fixing in the guise of intervention, the primary question, what determine price movement? demand and supply, isnt it?
now for this week, what determined price movement is demand only!!!!
they have succesfully sent a danger signal and i expect the free fall to resume on monday.

remember that for no reason transcorp shares got frozen to mitigate continous price losses, but what happened? when it is released, the free fall continue, so am waiting, waiting to see proper market reaction by next week.

[riskreturn]

Originally Posted by kenebobo

I dont understand what is happening any longer. Initially i thought they put a freeze on all down trend now it is a policy that a stock must trade a minimum of 100,000. Anyway they should be careful.

I have the opinion that the Punch reporter must have caused the confusion by not getting correct the explanation being made by the regulatory authority. There is no doubt that downward movement must have been decreed against, and not just the 100,000 units rule which has been in existence for some weeks and which is to check both downward and upward price movements alike.

My main reservation about the rule still remains. It is not symmetrical for both upward and downward price movement freeze, as would be the case if a generalised technical suspension on all stock prices is put in place.

Apart from this, what was being witnessed in the market up till last Friday was a sectorally unbalanced market downturn, with the banking sector (the sector currently having the sole strongest fundamentals, with profit growth in 3-digit territory on the average) being the main culprit (and overly under-priced) and and stock prices (with extremely high P/E ratios and near-term very sluggish profit growth potentials) of many other sectors still remaining overly over-priced. So, what may result now, at best, would be an upward movements in all stock prices, leading to a correction of the existing under-valuation of banking stock prices and an aggravation of existing over-valuation of non-bank stock prices.

I myself have no idea of an obvious remedy to the above-noted sectoral imbalance in stock valuation but, at the same time, think that what the regulatory authorities are doing is not the best way out. They should have dilligently examined the reasons for the sectoral imbalance to enable them adopt a sector-based solution, as opposed to a generalised solution.

[zainabusman]

Originally Posted by zainabusman

This will have a huge impact on the marketing of PP's. From page 73 of todays guardian. A public announcement by NSE.

“hereby informs companies seeking listing on the exchange by way of introduction that henceforth such shares shall be listed at the private placement price and will also meet the listing requirements, rules and regulations governing IPO in the best interest of the investing public."

So members buying PP's at a premium are taking a huge risk.

This is a key issue.