"Cross trades"

[jazmil]

I recently read an article which mentioned cross trades, refering to trades made by a broker between customers of the same brokerage firm. I'm wondering if these cross trades are bound by the same 5% price limit as seen on the floor of the exchange. I'm asking because I heard rumours that investors bought transcorp shares from the secondary market during the last public offer at a price well below the public offer price of N7.50. Could anyone shed some light on this?

[Avocado]

I don't know of the laws pertaining to cross-trades on the NSE, but the assumption will be that they wouldn't be allowed under conditions that aren't regulated. Good regulation will mean that such trades are reported to the NSE as cross-trades, and that both parties get a fair price. Cross-trading, as you hinted, is quite well open to abuse. First, they happen for the same stock, and will almost always (though not necessarily) involve the same broker; such 'trades' are not reported and uncompetititve. Because the trades are not reported through the exhange, it's very possible that someone isn't getting the 'best' price.

Do you have a link to the article?

.

[jazmil]

It was on an investment site I stumbled accross. I'll post the link as soon as possible.

[jazmil]

Here's the link:

http://www.proshareng.com/myproshare...les.php?id=891

The site requires free registration before you can read the article though. Its entitled " The Need for Market Makers in the NSE"

[alanbow]

I have read the article and I agree with the intent of the writer.

However from my discussions with my brokers in the past, I was told that although there is a lot of "cross trade" if I may put it like that but it is actually registered in the exchange. The house that has a seller and a buyer will first satisfy people within its house before allowing any other buyer access. I think this should be stopped as advocated in the article, market makers should be introduced to the NSE activity

A typical example was when Dangote Sugar was first listed, I wanted to buy some more but my two brokers kept telling me it was not available yet there was a lot of volume being traded on the excahnge everyday. I was made to understand that it was just being done between the issuing houses until the price got to a particular level before it is made available.

The same happened iniatlly with NAHCO after the annoucement of 3 for 2 bonus, a lot of trade was within the various houses but they get recorded on the exchange however they are not made available to other houses to buy into.

[c kenneths]

What Jazmil calls 'cross trades' seems to be what we call 'cross deals'
This involves the arranged sale of a person's stock or even share certificate to another person mainly throgh the same broking house.

I have done it before and in that case I got a man who wanted cash urgently, so I collected his share certificate and we all went to my broker and he signed some stock transfer form and then I paid him cash for the shares to be transfered to my cscs account.

Note that I paid the stockbroker his charges for both ways ( sell and buy)
then the deal will be made after the certificate has been verified and his stock will then enter my cscs.

Note also that there is no price restrictions by any regulatory body,I pay him what both of us agreed for the stock(this could be higher or lower than current market price) depending on what stock it is and how available it is in the market.

This excercise can take up to 3 months before you get to see it in your cscs. And sometimes it wont work, the guy keeps collecting dividends and bonuses on the stock.

[yemo]

Originally Posted by c kenneths

What Jazmil calls 'cross trades' seems to be what we call 'cross deals'
This involves the arranged sale of a person's stock or even share certificate to another person mainly throgh the same broking house.

I have done it before and in that case I got a man who wanted cash urgently, so I collected his share certificate and we all went to my broker and he signed some stock transfer form and then I paid him cash for the shares to be transfered to my cscs account.

Note that I paid the stockbroker his charges for both ways ( sell and buy)
then the deal will be made after the certificate has been verified and his stock will then enter my cscs.

Note also that there is no price restrictions by any regulatory body,I pay him what both of us agreed for the stock(this could be higher or lower than current market price) depending on what stock it is and how available it is in the market.

This excercise can take up to 3 months before you get to see it in your cscs. And sometimes it wont work, the guy keeps collecting dividends and bonuses on the stock.

Nice idea

[aysok1]

Result Announcement
NORTHERN NIGERIA FLOURMILLS PLC
27 January 2011
Unaudited Q3 (September) 2010
Profit and Loss Information
Turnover 10 N8.274b 09 N7.920b Profit Before Tax 10 N512.209m 09 N522.713m Taxation 10 (N51.639m) 09 (N134.406m) Profit After Taxation 10 N460.570m 09 N388.307m
Balance Sheet Information
Fixed Assets 31-12-10 N1.780b 31-03-10 N1.268b Stock 10 N1.630b 10 N1.097b Trade Debtors 10 N69.750m 10 N58.812m Cash And Bank Balances 10 N1.400b 10 N351.996m Other Debit Balances 10 N870.357m 10 N658.919m Trade Creditors 10 N1.320b 10 N31.086m Other Credit Balances 10 N1.092b 10 N677.794m Working Capital 10 N1.207b 10 N1.511b Net Assets 10 N1.557b 10 N1.458b

[solo66]

NORTHERN NIGERIA FLOUR MILLS PLC
October 17, 2011
Unaudited Q2 (Sept. 2011)

Profit and Loss Information
Turnover 30/09/2011 N6.749b 30/09/2010 N5.300b Cost of Sales 11 (N6.323b) 10 (N4.735b) Profit Before Tax 11 N195.806m 10 N405.741m Taxation 11 (N16.143m) 10 (N32.929m) Profit After Tax 11 N179.663m 10 N372.812m

Balance Sheet Information
Fixed Assets 30/09/2011 N765.612m 31/03/2010 N851.378m Stocks 11 N1.793b 10 N1.854b Trade Debtors 11 N18.775m 10 N24.335m Cash and Bank Balances 11 N638.927m 10 N970.308m Other Debit Balances 11 N32.243m 10 N2.551m Trade Creditors 11 N456.599m 10 N919.028m Other Credit Balances 11 N1.204b 10 N1.425b Working Capital 11 N1.306b 10 N1.053b Net Assets 11 N1.588b 10 N1.358b

[BigJay01]

Originally Posted by solo66

NORTHERN NIGERIA FLOUR MILLS PLC
October 17, 2011
Unaudited Q2 (Sept. 2011)

Profit and Loss Information
Turnover 30/09/2011 N6.749b 30/09/2010 N5.300b Cost of Sales 11 (N6.323b) 10 (N4.735b) Profit Before Tax 11 N195.806m 10 N405.741m Taxation 11 (N16.143m) 10 (N32.929m) Profit After Tax 11 N179.663m 10 N372.812m

Balance Sheet Information
Fixed Assets 30/09/2011 N765.612m 31/03/2010 N851.378m Stocks 11 N1.793b 10 N1.854b Trade Debtors 11 N18.775m 10 N24.335m Cash and Bank Balances 11 N638.927m 10 N970.308m Other Debit Balances 11 N32.243m 10 N2.551m Trade Creditors 11 N456.599m 10 N919.028m Other Credit Balances 11 N1.204b 10 N1.425b Working Capital 11 N1.306b 10 N1.053b Net Assets 11 N1.588b 10 N1.358b

The effects of soaring input costs. Over 50% drop in bottom line! bloody

[nosa2]

Originally Posted by BigJay01

The effects of soaring input costs. Over 50% drop in bottom line! bloody

My guess is that the cost of energy and wheat are the culprits. Plus I think we import wheat so a higher dollar should put more downward pressure on the bottom line, so I dont expect things to get any better soon

[BigJay01]

Originally Posted by nosa2

My guess is that the cost of energy and wheat are the culprits. Plus I think we import wheat so a higher dollar should put more downward pressure on the bottom line, so I dont expect things to get any better soon

exactly!

Expect a not so good result from Dangflour

for this same reason (rising price of raw sugar) Dangsugar is having a very rough time.