Dialectic Africa Analyst

Dear Africa interested professionals:                                                            When I ponder on earnings quality, it goes beyond the financial performance of the companies as provided to us by their directors.  Are the numbers provided to us possess the qualities of transparency, authenticity and longevity?  Are this year's numbers going to be adjusted (restated) next year with the reality of this already known today?  Do restatements suddenly become an annual recurring act for some companies, just the way financial reports are audited annually? Public companies that continually restate their books, change key figures significantly without any clear, detailed explanation are guilty of poor earnings quality as their audited financials are not as reliable as they should be.   I have randomly selected visible companies across different industries in Africa and reviewed their two most recent annual reports (covering three fiscal years) for restatements an

Dear Retail Investors:                                                            As the  buying frenzy continues , be wary of where you are investing your money.   Most  stocks are rising on  momentum and vested interests manipulating the share price upward   and not because of improved financial performances and near-term expectations.   The banking industry takes the brunt of bulls and bears so, I will focus on this industry.  I will mention (briefly) three banks to be wary of when the tide turns and stocks start heading south as investors panic and seek for the exits while trying to hold on to their unrealized gains.   1.  FCMB:  The bank's nine-month (September 2017) result is not on the Nigerian Stock Exchange's corporate disclosures page.  Not surprising given the below... Pre-tax income  declined by 52%  year-on-year and Gross Earnings  declined by 16%  year-on-year.  To put this result further into perspective:  Pre-tax income was  7.57 Billion nai

Dear Readers:                            On  May 4, 2016,  I sent an email with a link to the current featured article on this blog.  I said that  FBN Holdings (First Bank)  will return at least 200% in  two years (twenty-four months) or less  from that date.  My call has come to fruition.   The article can be found as the  featured post (left side)  on my blog for reference and verification purposes.  Featured post  can only be viewed  using a desktop, tablet or laptop and not on mobile/cell phones.   On May 4, 2016, the price of FBN Holdings was  N3.50;  the price of FBN Holdings on January, 10, 2018 is  N10.63.   This is a  204% return.    My call was achieved in  twenty (20)  months.   I   will offer another one now without delving into the pitch details: Diamond Bank will return 200% return within the next 15 months or less.  Reference price date is January 8, 2018.   Do not miss this one...   Tell others to tell others.

Dear Readers:                                             Oando  has been in the news  negatively  of recent.  The Securities & Exchange Commission of Nigeria (SEC) issued a directive that a  forensic audit  be carried out on Oando in October.  A directive of this nature had never been issued by the SEC to a listed company.  When we suddenly cross our fingers (prematurely) and hope that Nigeria may be turning a new tide, the Minister of Finance (a politically exposed person)  suspends the  Director-General of the SEC: Mounir Gwarzo for malfeasance approximately a month after  he directed a forensic audit and the suspension of trading in Oando's shares.   Suddenly, Oando became more emboldened in an air of perceived innocence and defiance granted it by the suspension of Mounir Gwarzo by Mrs. Kemi Adeosun, and has been writing long letters to the investing public and filing suits in every and any court in its quest to stop the ongoing forensic audit. We learnt in grade

         The most disturbing business relationship in the world is one where one party compensates another party that is supposed to be loyal to the society at large and uphold certain fiduciary principles.  You are paid by one entity but, your allegiance is supposed to be to a larger entity that has not compensated you in cash and/or kind but expects the integrity of your profession to trump selfish business concerns.   Auditors get paid by the client but, the investing public is expected to believe the audited financial statements meet certain required and expected standards of honesty and transparency.  Reality of events across the world clearly shows that audit firms have pledged their loyalty to the paying client and not the users of the financial statements they audit. Africa needs better audits by auditors if it its constituent countries’ stock exchanges are ever to become developed markets and if it wants to increase stock market participation rates by its citizenry. Af

Dear Africa Interested Professionals:                                                            I have put together a bunch of random thoughts to close out the first quarter of 2017.  Will be back to the rest of the continent as from Q2 2017 and put Nigeria to bed for awhile.   Stanbic IBTC Accounting Scandal: Do you know that everyone directly linked to the falsification of results is now out of the Stanbic IBTC picture directly?   1. Atedo Peterside; Resigned as Chairman of the board of Stanbic IBTC. 2. Sola david-Borha: Resigned as CEO of Stanbic IBTC Holdings.  Now works for Standard Bank  Group out of Johannesburg. 3. Arthur Oginga: Resigned as CFO and has left the Standard Bank group entirely.  He now works for a bank in Botswana.   4. Jim Obazee; The Executive Secretary of the Financial reporting Council that leveled the charges against Stanbic IBTC.  He has been relieved of his duties.  The Corporate Governance Code for businesses he was about to imple

Dear Africa Interested Professionals:                                                            Zenith Bank on February 27, 2017, released its fiscal year 2016 result; Kenya Commercial Bank did the same on March 9, 2017.  Zenith Bank offered its shareholders a final and second dividend for the 2016 fiscal year of N1.77 per share.  This equates to a final  dividend yield of approximately 12% which is one of the best dividend yields for a bank in Nigeria's stock market history in relation to its current price.  The market did not budge as the stock was marked down on March 13, 2017, at pretty much the same price it was when the result and dividend declaration was announced on February 27, 2017.  What could have caused this?  The chatter among investors is the announcement of of hybrid capital raising in excess of N100B to commence later this year.  I do not agree that the imminent capital raising announcement was the major cause of the investor apathy towards Zenith's eye-po