Margin facility

[threecrown]

Originally Posted by emmanuel ewumi

l doubt if l know what you dont know.Try to do your reseach on your selected stocks,arrived at a fair value for the stocks,find out if the stock is selling at a discount relative to the fair value.Watch out for what institutional investors are doing,it wont be a bad idea if you have a stock broking account with a house where these institutional investors trade.lf you are close to your broker,you can always get first hand information from some of these houses.
The margin facility you take,should be the type that operates like an over draft.This will enable you to make easy entry and exit out of stocks.Do not buy more than 4 stocks on margin,l always go for one or two.while buying on margin,you need to consider the financial year end of the selected stocks before making your investment decision.The margin should run for a year,with the option to roll over.You should also be calm,in the presence of market uncertainty provided you have done your home work.lf you can not afford to be calm then margin trading will be bad for you.You need cash reserve,and more than 2 sources of income.This will prevent you from selling at a loss,rather you buy more stocks or use the other streams income to pay down your loan or interest

Omo i like your style o, you are a good risk taker. But this will make you constantly active keeping you on your toes, not everyone has that time anyway. On a positive note, even in this bearish market one can still make 10-25% profit ones you know your game plan.

[dannynoko]

Originally Posted by emmanuel ewumi

l doubt if l know what you dont know.Try to do your reseach on your selected stocks,arrived at a fair value for the stocks,find out if the stock is selling at a discount relative to the fair value.Watch out for what institutional investors are doing,it wont be a bad idea if you have a stock broking account with a house where these institutional investors trade.lf you are close to your broker,you can always get first hand information from some of these houses.
The margin facility you take,should be the type that operates like an over draft.This will enable you to make easy entry and exit out of stocks.Do not buy more than 4 stocks on margin,l always go for one or two.while buying on margin,you need to consider the financial year end of the selected stocks before making your investment decision.The margin should run for a year,with the option to roll over.You should also be calm,in the presence of market uncertainty provided you have done your home work.lf you can not afford to be calm then margin trading will be bad for you.You need cash reserve,and more than 2 sources of income.This will prevent you from selling at a loss,rather you buy more stocks or use the other streams income to pay down your loan or interest

emmanuel-
Well in as much as it sounds good for you on the margin business, I will caution folks to take it easy (I would keep watching the mkt) except you have other source of making your loan payments as they come due. Emmanuel, I really hope that you are a player with the margin facility like you sound. How do you weather this kind of market where it is easy to go in and riskier to come out? A situation where the brokers cannot execute a sell instruction like before or even able to buy swiftly b'cos not a lot of people want to sell at a loss. Is mind buggling how you and your brokers do it. Having said that, well good for you if you are still finding your feet in this abysmal market. However remember us as you make your millions!

[ntom]

Originally Posted by dannynoko

emmanuel-
Well in as much as it sounds good for you on the margin business, I will caution folks to take it easy (I would keep watching the mkt) except you have other source of making your loan payments as they come due. Emmanuel, I really hope that you are a player with the margin facility like you sound. How do you weather this kind of market where it is easy to go in and riskier to come out? A situation where the brokers cannot execute a sell instruction like before or even able to buy swiftly b'cos not a lot of people want to sell at a loss. Is mind buggling how you and your brokers do it. Having said that, well good for you if you are still finding your feet in this abysmal market. However remember us as you make your millions!

it is hard for any one to be making it now this days stock hardly gain 15% but i still beleive we must be strong and run the risk (pls can somebody tell yadu.s no body will invest in unsure market )

[emmanuel ewumi]

Originally Posted by threecrown

Omo i like your style o, you are a good risk taker. But this will make you constantly active keeping you on your toes, not everyone has that time anyway. On a positive note, even in this bearish market one can still make 10-25% profit ones you know your game plan.

That is very true,l got a margin facility about 6 weeks ago,l just got out with a profit of 15% after paying interest,commission and loan.Am currently out of debt,even though the facility runs for 12 months ,but l hope to go back soon.Just trying to see how low some of the target stocks can fall.
With the expected public offer of UBN,year end of UBA,Oceanic and some other companies.l think the market should still be down in september.
But it is always better to have your loan approved,so that you wont start applying when things are moving up.ln most cases by the time the loan is granted,the party is usually over.

[riskreturn]

Below, courtesy of Daily Independent of today.

Banks, Customers Meet Over Losses In Stock Market
By Emele Onu, Finance Editor

Meetings are currently going on between banks and their customers, in a bid to cushion losses suffered by both parties since the lull in equities trading began about five months ago.

A competent source said the meetings were informed by the need to avoid "undue casualties of the market slump"

The source who pleaded anonymity told Daily Independent that the meetings were inspired and arranged by a number of major stock broking firms in the country after a thorough evaluation of the critical credit and debt situation of most banks and their customers, resulting from the inability of many customers to service or liquidate their equity finance facilities in the face of the current market downturn.

"We are moving from one bank to the other with these customers to re-negotiate the credit and payment terms. What we tell these banks is that the customers cannot offload now or pay back their loans even when they are due, pending when the indicators improve"

"But you know", he continued, "the re-negotiation of the terms is important so that the banks will not continue charging exorbitant interest on these facilities. The message we are passing across to them and which they are beginning to reason with us is that these investors have to live to pay whatever loans. Whoever dies of heart attack cannot pay from the grave," said the source.

Investigations revealed that many bank customers that took the share purchase loans have rolled over the assets, hoping that the market fundamentals will improve in the future and permit them to pay interests and liquidate the principal at a profit.

The Nigerian stock market had started the year on a bullish note, with the All-Share Index appreciating by 22% to attain its year peak at 66,371.20 points in March.

The bullish trend however reversed, for reasons including liquidity crunch. The All share index ended in July at 53,110.91 points, declining by about 25 percent.

Sectoral analysis of returns in the market during the period shows that the banking sector, hitherto known as volume driver, suffered a loss of over 15 percent.

The source said some regulations such as the increase in capitalisation of stock broking firms, which precipitated massive sell down of their holdings, and the proposed uniform year end for banks, which triggered aggressive deposit mobilisation and diversion of funds from the capital market, triggered the market lull.

With the policies reversed, "we hope the market will soon rebound and are pleading for understanding with the banks," he added.

[zubychyle]

i'm really considering collecting a margin facility with the hope that the worst is over. i want to believe it's a good move, at least to average down my losses and cash in on any bull run in the near future since most stocks are really selling at a give away presumably.

Fellow SMN folks, what do y'all think? any suggestions are welcome.

[panej]

Originally Posted by zubychyle

i'm really considering collecting a margin facility with the hope that the worst is over. i want to believe it's a good move, at least to average down my losses and cash in on any bull run in the near future since most stocks are really selling at a give away presumably.

Fellow SMN folks, what do y'all think? any suggestions are welcome.

"Never try to catch a falling knife" If you have any stocks your watching closely (technical analysis I hope), you'll know when they have bottomed. Try to get in on the 2nd or 3rd consecutive upswing. Bull across the board will probably not happen again soon and after this bear dust settles, you'll start seeing some listed companies in distress; hopefully none in your portfolio will be affected.
Typically; companies with sound financials will use this type of opportunity to buy back some of their shares held by the public, but I have combed the financial news and not one mention of stock buyback is out there.

[zubychyle]

Originally Posted by panej

"Never try to catch a falling knife" If you have any stocks your watching closely (technical analysis I hope), you'll know when they have bottomed. Try to get in on the 2nd or 3rd consecutive upswing. Bull across the board will probably not happen again soon and after this bear dust settles, you'll start seeing some listed companies in distress; hopefully none in your portfolio will be affected.
Typically; companies with sound financials will use this type of opportunity to buy back some of their shares held by the public, but I have combed the financial news and not one mention of stock buyback is out there.

i don't think the exchange discloses director's and preferential shareholders dealings which should be the case in a transparent system.i beleive a resistance must be reached on these stocks at a point, the problem now lies on picking the right ones putting the margin facility time frame into consideration.
Thanks mate for your response.

[dannynoko]

Originally Posted by zubychyle

i'm really considering collecting a margin facility with the hope that the worst is over. i want to believe it's a good move, at least to average down my losses and cash in on any bull run in the near future since most stocks are really selling at a give away presumably.

Fellow SMN folks, what do y'all think? any suggestions are welcome.

If I were you, I would probably get in place approval for facility and wait, watch the market a little bit and see if there is an up swing in activity for couple of days in a row b4 you jump in. Ask those that jumped in earlier wanting to average their losses the out come. I guess they will still need another averaging to do. Haven said that, if you have other sources to meet your margin calls when needed, then you should not be afraid to take the risk.

[chokit]

Originally Posted by dannynoko

If I were you, I would probably get in place approval for facility and wait, watch the market a little bit and see if there is an up swing in activity for couple of days in a row b4 you jump in. Ask those that jumped in earlier wanting to average their losses the out come. I guess they will still need another averaging to do. Haven said that, if you have other sources to meet your margin calls when needed, then you should not be afraid to take the risk.

This is well said.To take any loan for the purpose of buying stock is a risky business now.I am in a fix with my margin loan i couldnt sell because of heavy losses,i know its because of my initial contribution to the loan is the reason while they are still waiting they would have call it back.Hence,Cavetemptor.

[emmanuel ewumi]

Originally Posted by zubychyle

i'm really considering collecting a margin facility with the hope that the worst is over. i want to believe it's a good move, at least to average down my losses and cash in on any bull run in the near future since most stocks are really selling at a give away presumably.

Fellow SMN folks, what do y'all think? any suggestions are welcome.

Have you ever gotten one before.lf you have you still need to be careful.
Because l still have the feeling that this market will further go down in september.lf you arew to make any purchase now,make sure you buy gradually.
lf your margin is gotten,from the old generation institutions it will be better.lt appears their terms and conditions are a bit better and flexible.

[dannynoko]

Originally Posted by emmanuel ewumi

Have you ever gotten one before.lf you have you still need to be careful.
Because l still have the feeling that this market will further go down in september.lf you arew to make any purchase now,make sure you buy gradually.
lf your margin is gotten,from the old generation institutions it will be better.lt appears their terms and conditions are a bit better and flexible.

Hey Emma- I thought you were an advocate of facility before now, how come you are soft pedalling?

[dimeji_777]

Originally Posted by emmanuel ewumi

Have you ever gotten one before.lf you have you still need to be careful.
Because l still have the feeling that this market will further go down in september.lf you arew to make any purchase now,make sure you buy gradually.
lf your margin is gotten,from the old generation institutions it will be better.lt appears their terms and conditions are a bit better and flexible.

With the S.O.S intervention in the market which resulted in market capitalisation gaining an increase of N200 billion in just one trading day,I think the market had already experienced its worst price basement for the year. If according to your feeling, market will go down in September, I dont think ASI would ever go down as low as 43K, the year's lowest.

[muranay@yahoo.com]

Originally Posted by dimeji_777

With the S.O.S intervention in the market which resulted in market capitalisation gaining an increase of N200 billion in just one trading day,I think the market had already experienced its worst price basement for the year. If according to your feeling, market will go down in September, I dont think ASI would ever go down as low as 43K, the year's lowest.

You sound right, but anything can happen.

[emmanuel ewumi]

Originally Posted by dannynoko

Hey Emma- I thought you were an advocate of facility before now, how come you are soft pedalling?

Am an advocate of leveraging,provided you have done your home work and you have more than 2 sources of income.The type,terms and condition of the facility is also important.lf l got a facility of N10 million and l have only drawn down N1 million the interest will only be paid on the drawn amount.Unlike what some financial institutions will do,by charging you on the N10 million.
l still have a facility that runs till June 2009,but am actually out of debt.Am only watching to see how low some of this stocks can fall.l hope to test the waters through gradual purchase in september.