Dialectic Africa Analyst

Dear Africa interested professionals: It is banks' earnings season and the prominent Nigerian banks have already released their earnings: Zenith Bank, GT Bank, etcetera.  Despite the double digit dividend yields, only approximately  300 basis points lower than the coupon rate on Nigeria's thirty-year bond ( 13.2%) , investors do not appear excited enough to maintain a consistent surge in demand in excess of supply leading to capital appreciation.  This is not the first time investor apathy towards Nigerian banking results and corporate actions has reigned supreme.  The journey to find out why started in earnest and here is a summary of my thoughts.   1. Naira devaluation (especially during persistent downturns in oil prices) makes items more expensive in the local economy and makes banks lose their sense of value from an investor perception perspective.  " How good can these banks be when their prices are persistently low on an absolute basis?"  The highest priced

 Dear Africa interested individuals: Everyone (including Nigerians home and abroad) wants a piece of Nigeria while no one wants the WHOLE country and everything that comes with it: perennial problems outweigh wholesome potential .  This continues to persist with no end in sight and no sincere interest for an end.  Why? People just want a piece of Nigeria and not the whole.  In simpler terms, people are drawn to make enormous wealth from Nigeria and Nigerians without one iota of concern about what tomorrow holds for the country as a whole and its burgeoning people.   How do I succeed within the midst of chaos and rancor without addressing/ignoring the perpetual chaos and ranchor that pervades the society at large around me? Twitter was interested in hiring a Nigerian in 2019 that created a way to search for tweets related to a specific topic/discussion by collating threads.  An example of taking a piece of Nigeria.  The same Twitter a year later decided to choose Ghana as its African He

Dear Africa interested professionals: A throwback to a thematic analysis I did looking at Diageo's subsidiaries in Kenya and Nigeria in 2015 can be found below the dotted lines.  Five years later, nothing has significantly changed for the better.  Guinness Nigeria has sold its conscience to the Nigerian environment (opaqueness and self-serving decisions take center stage) while East African Breweries still tries to hold on to transparency and proper business management and this has reflected in its performance over the years.   Guinness Nigeria's better days are behind it and current actions do not bode well for the future.  When transparency goes out the door, there is nothing left behind worth admiring.  I will pick on two simple things to reflect on. 1 . Both companies made earnings expectation announcements to their respective stock exchanges for the fiscal year ended June 30, 2020 of a significantly negative performance relative to a year earlier.   East African Breweries

Dear Africa Interested Individuals: This article is not scheduled.  My current output is approximately one every quarter as this is a hobby done pro bono.  This was achieved for Q1 2020 with my article sent out on Monday.  I was reviewing WAPCO formally and the more I uncovered, the more I felt it was necessary to put together a quick note.  When I am done, you may never have a quizzical look on your face again as to why a good number of Nigerian companies have price - to - earnings ratios below five (5) and investors barely flinch.     1.  WAPCO has approximately  tripled its outstanding shares in less than two (2) years: 5 .5 billion to 16.1 billion outstanding shares.   2. WAPCO sought and was approved for 2 rights issues in less than two years.  Both rights issues were concluded within fourteen (14) months of each other raising a total of N 220 Billion ($610m).   3.  One board member remains on the board (the only one left) after more than fourteen (14) years as a

Dear Africa Interested Individuals, I looked at the price level of eleven (11) 'visible' stocks on the Nairobi and Nigerian Stock Exchanges on December 31, 2009 and March 20, 2020.  Are the point-to-point prices largely  a reflection of the Corona pandemic, Carefree economic and political leadership, Culpable management of companies or Confused portfolio investors?  I chose the last trading day of 2009 as a starting point, because this was the first full year concluded after the start of the global market collapse in 2008.  I see this as a bottom reference point.   Both markets are doing poorly year-to-date as at March 20, 2020: Kenyan Stock Market index is down 20.1% while the Nigerian Stock Market Index is down 17.3% .  How does the current price level compare to the 'bottom' price reference point of December 31, 2009 for the companies selected across multiple industries?  Before I delve into the selected companies, I will like to state that stock markets t

Dear Readers:                       Rights issues have become more popular in Nigeria after the 2008 - 2009 equities market crash in Nigeria.  As companies became more wary of public offers and the extra scrutiny that now came with it, rights issues became the lesser evil.  The drastic decline in stock prices across the market also made public offers less appealing to investors regardless of company clout.  Companies resorted to rights issues as the best way to still raise equity without being overly scrutinized and increase chances of a successful capital raise from within (existing shareholders.)   How hard should it be to convince existing shareholders to buy more shares of a company they already own at a discount to the current market price ? Rights issues are supposed to serve as an interim reward to shareholders; while, giving them a chance to maintain their ownership stake in the company.  The company they own also has a formal path to raise needed equity capital.  Th