MarketWatch

[dimeji_777]

Originally Posted by hispy99

do you have a market update you can share with us?

A total of N1.2 trillion is expected to hit the banking system this week from the Federal Accounts Allocation Committee (FAAC), excess crude oil account and statutory budgetary allocation.

The amount is made up of N547.58 billion allocation from FAAC, excess crude oil and treasury bills as well as N664.54 billion from third quarter capital vote.

The breakdown shows that N437.17 billion is from FAAC allocation for the month of August, N78.71 billion from excess crude oil and N31.7 billion from Treasury Bills maturity. This amount expected to hit the banking system this week is the largest single injection of funds since the confusion generated by the extension of uniform year end for banks.

The injection of the funds is expected to make the system to be awash with funds. The ease in liquidity that will follow may push inter bank rates down and help ease the pressure on banks for deposits. However, the Central Bank of Nigeria (CBN) will be concerned with the implications of such injection with growth in inflation, especially in the light of the recent release of a report on 14 percent inflation rate.

Following declines in oil production in the country, the figure of N78.71 release as excess crude is the smallest since March this year. Oil production had fallen to an average of 1.86 million barrels per day (mbd) from the January peak of 2.2 mbd. At the same time, the price of crude has fallen by an average of $20 last month alone.

A combination of the fall in crude oil price and production may signal a threat to government revenue budgetary estimates. Between December 2007 and July 2008, oil production has declined by an average of 300,000 barrels of oil per day. High oil prices have continued to compensate for falling production figures and budgetary estimates are still being met. However, last month, prices of crude have started to fall from the peak of over $140 dollars per barrel.

This is responsible for the shortfall in excess crude fund, which is the fund where excess revenue above the budgetary benchmark set at $59, accrues. If the twin ugly trend of falling oil price and declining oil production continues into the next quarter, budgetary estimates made by the three tiers of government may begin to be affected.

On the likely implications of the injection into the economy, Wale Abe, executive secretary and chief executive of the Money Market Association of Nigeria (MMAN) told Business Day that the amount could put inflationary pressure on prices.

He however expressed optimism that CBN will mop up excess liquidity through the Open Market Operation (OMO). He added that that much money entering the system is capable of reducing interest rates next week.

Birsmack Rewane, managing director of Financial Derivatives, told Business Day that so much money entering the system could only spell good, depending on whether it is actually spent on capital projects and if it is managed prudently. Perhaps this explains the thinking behind the release of the third quarter capital expenditure.

The budget office of the federation said that energy gets the highest share of N48.71 billion followed by transportation at N39.29 billion and agriculture and water resources at N27.73 billion.

The budget office also said that all the ministries, departments and agencies (MDAs), federal executive bodies, legislature and capital supplementation received N101.31 billion in the first quarter, N330.49 billion in the second quarter, and N232.75 billion in the third.

The National Assembly office got N325 million out of the N975 million, Senate got N1.25 billion out of N3.75 billion, while National Assembly Service Commission got N142.7 million out of N428.1 million.

For the capital supplementation, N500 million was released for adjustments to capital costs out of N1.5 billion, counterpart funding got N1.5 billion out of N4.5 billion, MDGs Social Safety Nets got N2 billion out of N6 billion, among others.

[nazzyon]

I have got a question for those who were investors as far back as 6 years ago.

How bad can it possibly be if this bearish trend continues like this?



In the meantime, I am going back to school and will be back when the market is at equilibrium.

[tonyawo]

Source: Business Day

Banks' action responsible for sustained fall in stock market
Godfrey Obioma

Months after the suspension on margin trading was lifted, effects of the earlier suspension are still having corrosive impact on the stock market as banks sell the shares of investors who used margin credits to buy shares but were caught up in the general market slide.

A BusinessDay investigation shows that many banks were hugely exposed to the margin facility with the underlying shares as collateral. An analyst said this was happening at the peak of the bull runs when stock investments were returning three digit percent growths. The returns were to be used to offset the loan.

At the height of the market boom, many banks had ventured into granting margin credit as they seemed to relax the conditions on facilities, a situation that was fuelled by the thinking that market growth would be sustained.

Our findings indicate that a first generation bank gave out as much as N5 billion margin facilities. When the announcement for the suspension of margin trading was made, banks began to call back the loans, leading to liquidity squeeze and price slump. As at August 19, 2008, the market had lost about 20 percent.

"In desperation to recover their money, these financial institutions are selling shares on the floor of the exchange," a financial analyst who did not wish to be named said. "The result is that any time stocks record appreciation in price due to supporting fundamentals; they offload the stocks into the market," he stated, adding that this largely explains the sustained bearish trend in the market even some companies have turning in impressive results."

This led to excess supply and price depression. Worsening the market slide was the conflicting statements by regulators on the margin account; the rule that a stock must trade 100,000 minimum before its price can move; the recapitalisation of stock broking firms and banks’ year end harmonisation policy.

To salvage the market, recapitalisation of stockbroking firms was suspended; margin trading was restored while bank year end harmonisation was cancelled. The central bank, the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange came out to assure that the capital market is still strong and stable.

In addition, quoted companies have been turning in impressive earnings. Many had expected that these would have stimulated market rebound. But investment advisers said the strategic sales by banks are responsible for the failure of the various palliatives to reverse the downward trend in the market.

Analysts are not sure how long this would take. But the realisation that banks control over 60 percent to market capitalisation and value is a source of worry to many, as developments in the banking sub sector of the market go a long way to influence market direction.

[knightofdelta]

Originally Posted by olusolakemmy

You mean you want to sell now?
you that encouraged us to stay with ABC till it get to the level that one cant get out?

you that want to become a director in ABC?
remember you can only achieved that by buying it up now that is goind down?

what is the name of that disciple that denied Jesus?

if people like you are talking of getting out, it means things are looking more cloudy and worse than we initialy thought

Meeen... the trend this economy is facing right now is scary. I did not mean to scare anyone though, just laying down the facts. I just hope all those economic advisers and financial drivers of Nigeria will do something quick to resolve these issues soon. The economy can be brought back to a state where it can start moving forward even with high prices of energy and food if the right steps are taken in the right direction to forestall a precipitous crash. My only fear is that nothing seems to be going on. The CBN is sleeping, the Minister of Finance is nowhere to be found. This is not just encouraging.

When I advocated for ABC, the economic indices still made some sense, Dunlop was still trying to manufacture and the market was not this bad. Diesel was already high but inflation was around 8.5% and cyclical unemployment was still close to zero. Soludo was still proactive and developing a master-plan of sort.

@Olusolakemmy I know say na you get the copyright of your fingers you use to type, but watch what you say o... I can mobilize my boys to come and pay you a courtesy visit o. When I said I am pulling out, I was actually joking as can be seen when I added "to go and buy Manchester United shares..." I am storing my money until the market gets to the level where foreign investors come and join the party. No matter how much I lose, Chevron go pay, na people like you I dey tink of...

I still believe in Nigeria and I am going nowhere, no matter how bad things might be right now, we will get to a point where something will be done about it. We cannot continue like this for long because I believe someone will wake up to their duties soon... I just pray the powers that be allow Prof Soludo to do what he knows what to do best because I know he can handle the current situation.

[hispy99]

Originally Posted by panej

Correction, Correction, Correction....market is still correcting. Most of the stocks are still overvalued. Foreign investors are still cutting their losses. It will get to 40000 very very soon, but if it falls through that floor, brace yourself....
The next positive rally is going to be more realistic than the one that just burst. Hope lessons learned will be used....if it seems too good to be true; it is! The last rally was similar to the US dot.com bubble and after the burst, investors became wiser. Every market has been through such....hopefully this is ours.
Three year NSE index chart attached...

bros, this one don pass correction na...a correction is usually a drop of 10% from peak to trough...NSE has fallen by more than 30% from its peak early this year. This is bear territory.

[hispy99]

[quote=BLUEMONEY;28564]

Originally Posted by Askira

Equity Cost Price Total Units Held Current Price Return(%)
ABCTRANS 7.70 25,000 2.12 COLOR="red"]-72.47[/color]
BAGCO 3.90 4,125 3.94 1.03
CILEASING 14.05 30,000 -21.00
DANGFLOUR 15.00 5,020 15.03 0.20
DANGFLOUR 23.20 4,700 15.03 -35.22
DANGSUGAR 51.90 10,000 19.99 -53.78 DANGSUGAR 36.50 5,000 19.99 -45.23
FIRSTALUM 8.65 26,000 5.00 -42.20
FLOURMILL 97.00 5,000 60.00 -38.14 FLOURMILL 92.60 60.00 -35.21
FLOURMILL 91.70 60.00 -34.57
FLOURMILL 93.50 6 60.00 -35.83
FLOURMILL 61.95 4,000 60.00 -3.15
JAPAULOIL 3.95 50,000 4.45 12.66
MAYBAKER 17.75 20,000 8.51 -52.06
MAYBAKER 10.15 10,000 8.51 -16.16
WAPCO 65.01 5,000 36.81 -43.38 WAPCO 67.85 2,500 36.81 -45.75

Total amount spent=4,081,831.20 net now=2,612,049.10 loss=1,469,782.10 return on investment=(-36.01)

I was away for sometime now and when i returned, my portfolio was all wrecked. So next time you feel like shouting, just have alook at my portfolio, may be you will sleep well knowing that a urs is just a child's play.

When i asked for pro advice, they said i shld continue buying so as to averaged my losses, my brother, the more i buy the more red it becomes. I will hang, God dey, I've since left everything in his own hands.

ThanK God the premiership has started. My team better do something this season or else yawa go gas.................[/QUOTE]




There is no need to hang. I will advise you stay out of the market until you see signs of recovery before making any move to average your losses.
And i hope your team is among the top four in the premiership, if not Yawa go really gas.

Why top 4 teams? Only one team fit win...so I hope your team is Man Utd ...or else more yawa go gass

[hispy99]

ASI is down by over 25% alone this month and my portfolio is doing a very good job of tracking this fall...6 more days to the end of the month; i doubt if there has been any month that has been this bad before

correction...The drop MTD is ~ 18% and not 25%. I was looking at the wrong cell in my bedsheet

[hispy99]

NSE, other stakeholders meet in Abuja tomorrow
Posted Monday, August 25, 2008

-Set to map out intervention plan on market bearishness

PETER OBIORA

Proshare NI

August 25, 2008 at 16:18 GMT

The Nigerian Stock Exchange (NSE) and other stakeholders which include the Ministry of Finance (MOF), Securities & Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) would tomorrow August 26, 2008 in Abuja Nigeria converge and map out a policy intervention to check the persistent market bearishness.

This information was gathered by Proshare NI at the Floors of the NSE today in Lagos Nigeria as Professor Ndi Okereke-Onyiuke, Director General (DG) of the Exchange called notable dealing members of the Exchange to a brainstorming section to seek ways of moving the dwindling Nigerian Capital Market forward.

In the brainstorming section, she urged dealing members to bring forward useful ideas that would be put in place to ensure that the market stabilise and return to a profitable position where investors would reap good returns on their investments.

Prof. Okereke-Onyiuke also urged Stockbrokers to solicit for patience from members of the investing public; whom they are doing business with. “We are working to make sure that things are normalised in the market” she said.

In the same vein, she urged the banks not to drive too hard the repayment of loans granted to investors for investments purposes.

As at the time of filling this report, Proshare NI could not gather further details on the NSE brainstorming session.

For about five months now, the Nigerian Capital Market had persistently remained bearish; which has seen investors lose huge returns on their investments.

[nazzyon]

Why did they wait till this time before coming out?

They ought to have set a target since they've experienced this in the past.

Since correction is around 10% it would have been good if they can hit the board at 15% just to prevent this huge loss.

All the shares I bought as far back as 2006 are now trading below its buying price.


If it continue like this, the long term investors will take the hit.


Imagine, around January you are summing up millions and now you can't even boast of one third of that amount.


E BE LIKE SAY I GO START TO SELL GARRI FOR MARKET.......Abi e o ni ra.

[tobenna]

Just as Askira did, I finally summoned the courage to look at my portfolio for the first time in about 6 weeks.

Ladies and Gentlemen, in a tried, true and trusted Nigerian method, I believe its time we called an Inter-faith National Prayer Meeting.
Any enemy of progress must "fall down and die!"
Period.

[riskreturn]

What is this idea of intervention fund (please, see 2nd paragraph of the posted link below) about, assuming the government buys the idea and provides the funds? Who would manage it? Who would decide which stocks to buy with the funds and when to exit? Would it need parliamentary approval and, if so, can it take off early enough before the damage is 100%-done?

[riskreturn]

What is this idea of intervention fund (please, see 2nd paragraph of the posted link below) about, assuming the government buys the idea and provides the funds? Who would manage it? Who would decide which stocks to buy with the funds and when to exit? Would it need parliamentary approval and, if so, can it take off early enough before the damage is 100%-done?

Proshare News

[Askira]

Originally Posted by nazzyon

Why did they wait till this time before coming out?

They ought to have set a target since they've experienced this in the past.

Since correction is around 10% it would have been good if they can hit the board at 15% just to prevent this huge loss.

All the shares I bought as far back as 2006 are now trading below its buying price.


If it continue like this, the long term investors will take the hit.


Imagine, around January you are summing up millions and now you can't even boast of one third of that amount.


E BE LIKE SAY I GO START TO SELL GARRI FOR MARKET.......Abi e o ni ra.

My brother, i dont see anything good coming out of it. Anytime govt make pronouncement on something, it becomes worse: cement, roads, electricity just to mention a few. Today we are buying cement @ about 2000, depending on where u are in the country.

The unfortunate thing is that the policies are hijacked and formulated by political thugs, look at your constituency and see who is representing you at the national assembly or even the FEC.

Lets all pray not for our portfolios but also for this country.

[billions]

I hope dis intervention wont be like d past ones.

The temptation to invest some money is high but "NO"...not now.

I wont be surprised if d index moves up today.