Nigeria stock market: as dry bones gradually grow flesh

It is hoped that the majority of traders—those who buy stocks with little or no regard for fundamentals and sell on regular basis and therefore, prefer to keep faith with actively traded stocks— and investors—their who buy for the long term benefits, including off course, the depositors who see the place as another savings account— who left the market, particularly those who left only after sustaining heavy losses, would make a cautious return having learnt through personal experiences that it does not pay handsomely to rely on crash program advice by whatever name called or their stock brokers, to play in the market but rather, on adequate understanding of market trends.

Now, many would no longer go to heavily overvalued seminars to simply note the “stocks to watch” or listen to stories of those who bought theirs at 50kobo and sold at #50; but to listen, for ways and means of determining the true worth of shares as against the showroom prices on display, by some of them. In all, it is my bet that this second coming would not be that of emergency “resources persons” most of whom are now “forexing”, since the bust; this is because, the returnees must by now have understood that what took a first degree business graduate, four years, and in some cases, extra year(s) cannot be comprehensively learnt in less than three hours and five page handout filled with definitions and addresses of favoured brokers. This is currently the era of investigative learning and investing.

Coming to shares, it is my considered opinion that persons who bailed out of those over rated or heavily priced stocks and berthed with the pennies of the market, before the crash are better off in terms of their expectations. This is because, they are more likely to witness the current gradual recovery catch up with their purchase price and even allow some capital appreciation, unlike those who were left to carry the can of the over weight shares. For the latter, their recovery is not foreseen in the immediate future or short term, if ever. Caution is now the watch word and therefore, there would be no follow the crowd mentality of the past.

It is my bet that those who had a raw deal during the bust would return, acutely risk averse and therefore, would go to the sector that affords them much for less—the insurance sector—in the event of another bust, for them. They would prefer what they can conveniently lick and not engage in the point and kill of the past.


Aside the above, another new influencing factor that is to be considered is the Prof. Soludo inspired agenda for the financial sector known as the Financial System Strategy 20:20(FSS20:20) with over four hundred items. This is most likely going to see the insurance sector playing a much bigger role in the economy. This means increased revenue and therefore, distributable profit or dividend, which is the sole determinant of pay back period as at the purchase date. To interest holders, a very important factor in attracting and keeping investors and by extension, price. So, whichever way it is looked at, for the traders and the investors, the insurance stock still has a lot, to offer.

For the banks, even though they have had their hands rather than fingers burnt from their hand in glove involvement with trading activities on their shares, their shares, it must be admitted, remains attractive, not just for their sound fundamentals, but also, for their “see me, see you” presence across the federation and for some, beyond. Such presence gives confidence, particularly, to the average player with difficulty determining whether a business is going to continue as a going concern into the future

For the shares of the manufacturing sector, a strict determination of the intrinsic values of their shares is strongly advised. This is because the challenges against their operations is hydra-headed and enormous, ranging from power, energy, dumping, inferior quality to weak social structures and even, believe it if you can, government musical chair policy.

In all, the market is about to recover and it would not be wise for those who lost out during this gradually easing economic crisis to allow their actions to be determined by the fact of their recent experience and therefore, refused to have anything to do with the market again. It is still a place to make money even during the severest period of the crisis and even more so, now that it is beginning to crawl back to the top. Opinions are welcomed.

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Hul

The great campaign.

When, well-meaning Nigerians including this writer, advised our very own globally respected Professor Dora Akunyili, formerly of NAFDAC and current Minister Of Information And Communication, against embarking on artificial re-branding of the country, it was because, we were too confident that the elite—politicians— who, in the main, were and are still responsible for the battered image of the country, and its perception, as home for the criminally minded, was going to make her effort, worthless.

The summary of the argument then and even now, was that our image problem could not be corrected by government sponsored propaganda, on influential television channels like CNN, but through decisive actions, aimed at eliminating the root cause of the image problem—corruption—in our body polity; but those working with her, thought otherwise; arguing that there was something unique, in concept and design, about theirs.

To this, we disagreed. Nonetheless, they had their way. But, events in the country since the former launch of the campaign on 17th March have proved it critics right even though, I am sure that they would have loved to be proved wrong. Apart from the then, almost daily visitation from government and non-governmental institutions, heads to the minister, to pledge their support to the “re-branding project”— as if their pledge is a personal favour to her, to clean up her mess— it has been business as usual.

After the exhaustive use of highfalutin grammar to sensationalize and grab headlines and attention for months, it did turn out that the House of Representative; probe committee on power was only on a tour of the federation on, public funding. This is about the only way to explain the fact that a contractor who, even at this moment, is still bellyaching over an unsuccessful bid to execute some of the jobs under probe was engaged as a consultant to the committee, not just to advice but also, to write the report! And guess what, it returned a verdict of almost $16b, capturing even proposals as actual expenditures. Meanwhile, another investigation on the same issue has submitted that a far lesser amount—a little above $3b was appropriated and less than $2b, spent.

And then, you have the executive that seems to do the right thing at the wrong time. Consider this: the senate after passionate appeals from affected Nigerians did decide to look in to the issue of demolition and allocation of lands in the FCT. And it did establish that the former minister had allotted some of the lands in choice areas of the territory to himself, family members and few friends in and out of government mainly through fronts. When he was called to account, he decided to do so from a save distance. So he quickly gained admission overseas and relocated. The noise appropriate his conduct then was made and matters were allowed to rest under “investigation”

Been the pocket dynamite he was once called, he exploded from distant lands on the government of Yaradua and with all alacrity, an extradition process was put in motion. Former vice president Atiku got his security details “extradited” back to the police force, after he made similar statement against the government. and only got them back following public outcry. The question to ask is if, the actions of the government had been on their agenda or was just a reaction.

And look at how we have handled the Halliburton scam, our biggest opportunity to make a definite statement about a re-branded Nigeria, to the international audience, for next to nothing. Tanker drivers whose lawlessness was tolerated during the military regimes under the guise of clamour for the return democracy today, picks and chooses what law or regulations affecting their operations, to obey.

Talk about a cancerous power and you remember the Ekiti re-run election. An election that was conducted for less than a million people generated so much confusion that for over a week, victory was swinging—in the papers—between the two candidates; necessitating the resignation of the resident electoral commissioner, for the state. And may be, to arrest the confusion and possible violence that was bound to follow such madness, the announcement of results for a local government—oye—was delayed, to give the government time to mobilize more troops.

And to remember that one of the contestants had had almost a two years of “awoof” time to re-brand the opinions of the voting public in his favour coupled with the support and goodwill of the presidency, his immediate “poorforming” fellow governors and his party, makes the whole thing, an embarrassing verdict on the combined performances of them all. Imagine a re-run in Lagos or Enugu.

Finally, remember this: that what Ghana and South Africa did on a countrywide basis is what we could not do for some 63 wards of just ten local council areas of a single a state. Re-branding my foot!


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Soludo must go!

Past: What is Yaradua waiting for to fire this Soludo man? This is one thing that I like about the former president. He would never have tolerated this kind of gross incompetence, for this long.

Ahead: what do you mean by that? Didn’t he retain the services of a minister under whose watch, series of air crash happened? Besides, if his, was a government of competence, why didn’t he solve the energy problem?

Pass: do not waste good grammar, let him just tell us why he thinks he deserves to be fired.

Past: he is not qualified. He has never worked in the financial sector. So he can’t do anything and he is not doing anything. All he knows is theory.

Loser: that is not all. He is implementing the Biafra agenda under the guise of consolidation and reforms.

Ignor: you mean he wants to break the country, Eh. Well, if they want to go, the rest of us should oblige them, after all, they contribute almost nothing to our common purse. They are nothing but a burden. In-fact, they should go. Yes. They should.

Loser: Igno, I have told you this before. Always re-echo me if you must talk. Never maintain an opinion!

Ignor: why?

Loser: u always take the same position with our opponents without knowing it.

Ignor: are you serious with that statement, Loser?

Loser: off course, I am as serious as an acid on a body!

Ignor: I am sorry. I thought that was in order. You know I always want to be on your side.

Ahead: Loser, I must confess my ignorance. Can you elaborate on this your Biafra agenda supposition?

Loser…that is not hard to understand. We were doing very well and satisfied with ourselves until he came with his consolation campaign which forced the banks to con us through the “kalokalo” they called shares.

Pass: No doubt, you mean Consolidation

Ignor: the correction is not important. Con sorry or solid, all we know is that it was through the consol thing that all our money was transferred to his people.

Past: miserably wretch! I thought you knew our grievances. Rather than talk about the loss of the more important license and it leverage, you are complaining about your chicken feed shares.

Loser: eh, look here past. I have headache not migraine. After-all, if you had done the needful and allowed your conscience to guide you, there would not have being any need to share anything besides, you brought this home to me when you started that your talk of millions in no distance time through sharing my money with your osusu bank.

Ahead: you people should keep your personal troubles out of the way, please. We are talking national issues.

Ignor: nothing is more national than this melt down I feel in my pockets and shops oh. Nothing! As a matter of fact, I am thinking of approaching any of these banks for a bailout.

Past: It just that you refused to learn the basics, I was only trying to teach you the tricks of making money without sweating,

Loser: and in the process tricked me. Igno, you just said something about borrowing from the banks.

Ignor: yes, Past. It is just the interest rate that is in the way.

Pass: and what is wrong with the interest?

Loser: I hope to God that you are not about to defend the in indefensible.

Pass: certainly not. But the “indefensible” according to your interpretation might not have a universal definition; particularly where our economy is concerned.

Ahead: exactly. And your, complain about interest rate just fits into one of those without a global acceptance.

Igno: what do you mean: in the United States and even Britain and most of the developed world, it is almost zero while ours is nearing a whooping 30%.

Pass: finally, you have advertised your ignorance. And it would be a disservice to the nation if we allow you to go, uneducated about the issues so far. For one, the interest rate of any economy is a function of certain factors peculiar to that economy. Such factors includes, the rate of inflation and opportunity cost and before you ask me about the meaning, I will quickly add, that it is what influences you to hand your cash over to someone instead of investing it in shares or landed property. And in most cases, it is the better returns that you project or envisage, would come from such act.

ahead: and as for inflation,, I would ask you this simple question: can a hundred thousand,, today,, buy you the same quantity and quality of any item it used to buy for you in the earlier 80s.

Ignor: for where! I did not have up to that amount then when I built my house and bought a brand new car. Today, I don’t know if that amount can afford the four tyres of the same car.

Loser: igno! Igno!! Ignor!!!

Ignor: I am sorry, loser, but it is difficult to lie against an obvious truth.

Loser: keep quiet!

Ignor: I will try.

Ahead: Past, you said earlier that all Soludo knows is theory and that he has done nothing; what about the consolidation that saved the nations banking and financial system and by extension, the economy, from disappearance during this economic crisis period?

Past: that consolation thing is not his idea. It is Obasanjo’s

Ahead: but he diligently supervised its implementation to the letter.

Pass: how did you know it was Obasanjo’s ideas; Past and whose idea is the FSS20-20; Yaradua? I still can’t understand why, for the larger national interest, you can’t seem to forget those loses you incurred due to his policies. The man has done much to change the financial landscape of the country. He has taken the former moribund community banks and turned them into self sustaining banks with some of them declaring profits in the billion brackets.

Ahead: and even polishing the image of the country in international channels like CNN through their massive presence in program sponsorship, at the last count, we had inter, uba, zenith and bank phb. The impact is more than the re-branding project would ever do. Furthermore, for the first time in recent history, we had our banks listed among the two thousand largest companies in the world.

Pass: in addition to masterminding the setting up of AFC from where, characters like you have pressured the president into withdrawing the country’s participation.

Ignor: you mean all this has been achieved under him?

Pass: and even more. He is currently teaching experts from other nations how to survive the melt down right in the CBN building besides helping the entire world solve the crisis under the UN auspices. His removal will amount to another palm seed and Malaysia story.

Ignor: tofiakwa. Holy Ghost fire! He should stay and finish his good work including that decimal point. That would have made me and my landlord equals.

Pass: you mean the re-domination.
Past: you can brain wash ignor after all, there is really nothing inside of him but know this, Soludo must go! I am out of here.

Ignor: and out of the country as well!

Ahead: so, should Soludo go?

Ignor: the nays have it, all the time.

Loser. Ignor: l will see you later.