Watch Out For Their Tricks !

[c kenneths]

Look, I am not trying to remove anything from the modest achievements of our Nigerian banks and other companies listed on the nigerian stock exchange, but my problem it that I am noticing a disturbing trend among these guys especially in the banking sector.
I have been religiously following the price of every company in the NSE and I noticed that prior to UBA's share price was pegged at 37.99 a share, there is this massive purchases of their shares, even after their bonus and dividend announcements the price was still going up. It has now happened again in the price of OCEANIC bank where the price is on the steady increase since ten days ago, with massive quantities being bought by faceless people,
(136million units was bought on monday alone) cummulating in the price ending at 19.53 last friday before they pegged their price.
This price trends suggest strongly that these banks are involved in a share buy back practice for the purpuse of cranking up their share prices by massive buy backs in order to sell their public offers at a higher price.
I think this is manipulation of the investing public and the relevant authorities seem not to notice or even care. Are they also part of the plan?. We may never know.

[Stockbear]

I thought share buy back is allowed? If so, I don't see the authorities raising an eyebrow. Unless their is a formality before a company is allowed to buy back shares?

[ghm]

It's a good sign if a company is buying back their own shares. I will invest in such a company anytime, anyday.

Another point is that though the prices of most company are pushed up just before they were suspended for public offers, most of them still move upwards after the offer. e.g. Zenith moved from 14 to 19 b/4 2006 PO was issued at 16.5 but still moved up after the PO to 34 because it is a fundamentally strong bank. Likewise Intercontinental Bank in the 2006 offer, it still moved up after that and many more examples that I have personally enjoyed.

I will rather look at the fundamentals than being sentimental out of mere suspicions.

@ c kenneths, if you think the shares are overpriced, that will be a different thing. UBA and Oceanic bank has very impressive results in the previous year which is sufficient enough to drive their prices up.

I guess we are in a rare state as emerging markets in the world and I will urge all investing Nigerians to wake up and invest so that foreigners will not be the only ones investing in our fatherland. Remember, 60% of Dangote sugar was desired by a foreign co, IFC bought 14B worth of IBTC chattered and "Active" equity want 17 billions units of Diamond bank already, GTB raised about $ 300m in Euro bond: all by foreign investors.

In other words, these are good companies, forget sentiments and invest away NOW.

Thank you.

[c kenneths]

I am not against share buy backs,what is the essence of their buying back the shares only weeks before a public offer. That is my only concern. UBA may have sold their shares at around 25-30 naira and OCEANIC around 13-14 naira if not for the buy back strategy which will surely make them to realise more money than they should have. Now they will likely sell at 35 naira and 17 naira. At who's expense, YOU AND ME.