Dialectic Africa Analyst

Dear Readers,                        This morning Access Bank was down in excess of 5% during trading hours.  During the last two hours of the trading day, there was a concerted effort to mop up the supply side to stop the bleeding on the downside.  The stock succeeded in closing the day just down 0.46% .  Maybe, another 30 minutes of trading and a deep red price movement would have a turned into a shallow green price movement.   Dangote Cement also rose with minimal shares traded <55,000 and as expected boosted the overall market as it single-handedly makes up one-third of the market capitalization of the Nigerian Stock Exchange.  There are vested interests here of course and plenty of exposure...  If Dangote Cement goes down (stock price wise), the Nigeria ASI Index goes with it and many emerging market portfolios will be hit. Stay tuned.  We are in interesting times. Companies that use chicanery to drive interest in their stocks, will find their level regardless of artific

Dear Readers;                        I will make this quick.  Companies must present a true state of affairs of their businesses.  While I cannot force them to do so, I will call them out.  Luckily, investors are actually getting a bit more cautious in their usual exuberant reaction to results that appear impressive on first take.   Dangote Cement: Dangote's Cement is not selling.  This has been a perennial issue.  The company is producing but, is selling way below its production.   The company is now competing on the level of Zenith Bank for interest income witha figure of N43.82B .   Finance income earned in 2016 by a cement company is approximately 90% of the interest earned on bonds by Zenith Bank for the whole of 2016 - $48.73B.  This is ridiculously deceitful.  This line item was pretty much used to negate finance expense of N45.4B.   Operating Profit for the group actually declined 16% from FY 2015 - 2016.   Outside of Nigeria, where the company is embarking on a

Dear Africa interested professionals:                                                      Find below the verbatim text from the SEC about the Brokerage Scandal in Nigeria.  This is classic example of the grandiose speeches  I mentioned in my last article that are more focused on self than transparency.  The SEC's response is largely defense and pacifying rather than providing clarity and answering questions.   Why did the media have to break a story more than four months after SEC knew about it?   Now, the SEC wants to respond and feel it is being proactive and transparent.  This issue will be buried before you can dig six feet.  It is Nigeria; nothing of this nature is new. People are talking as I write and the hook is gradually being removed from the mouth of the fish.  Victor Ogiemwonyi will not be sentenced to jail for any financial crime.  He has enough people that sit at the top of regulatory bodies to get him off the hook.   This is why I continue to repeat; nobody

Dear Africa interested professionals:                                                           I have incessantly spoken out about no proper system of checks and balances within some African Financial Markets.  Individuals continue playing musical chairs with influential positions to ensure they continue to have control over the financial marketplace and preserve their business deals while expanding their business empire.   Remember in 2014, when Access Bank (against extant rules in place) tried to freeze its share price for four months while it embarks on a rights issue to "preserve shareholder value?"  The freeze was on for a week until Arunma Oteh (SEC DG) at the time intervened and forced the freeze to be reversed.  Diamond Bank had completed its rights issue a few months earlier without seeking preferential treatment.   Partnership Investment Securities (owned by Victor Ogiemwonyi )   is currently embroiled in a financial scandal involving aggrandizement of clie

Dear Professionals:                                A little over a year and a half ago, I wrote two articles in two days about my concerns with companies audited by Deloitte based on my numerous experiences as an independent investment analyst. I will post both articles below.  In response to this article, some partner from Deloitte South Africa started chasing me around the internet with threats; he was obviously not thrilled with my truth telling which he deemed misleading lies. I always tell you readers, "posterity is never prejudiced."  Just as light and darkness will always reveal themselves, so also will the truth no matter how obfuscated it may initially appear.   Over the past month, Deloitte has been sanctioned by regulatory bodies in two different countries over poor audit oversight of its clients.   1. Deloitte has been hit with a record four million pounds fine by the Financial Reporting Council (FRC) after a five-year investigation into Deloitte'

Dear Africa interested individuals:                                                         On Monday, April 25, 2016, I wrote an article on this blog titled:  "Nigeria All-Share Index: Retail investors will determine how it moves."   I have been a vocal proponent of retail investors being given the necessary support to return in droves to the Nigerian stock market and for their outstanding grievances to be addressed e.g. the dividends not yet paid out for banks that were taken over by the Central Bank (Bank PHB, Afribank etc) during the tenure of Sanusi.  Where is the money?   No one is talking.  The Nigeria Stock Exchange (NSE) leadership has a different opinion.  Retail investors should be pushed to invest indirectly in the marketplace by investing in mutual funds instead of directly purchasing equities into their own accounts.  Some mutual fund companies were even engaged by the NSE to do investor education (of course marketing their funds) to retail investo

Dear Readers:                        The most disturbing business relationship in the world is one where one party compensates another party that is supposed to to be loyal to the society at large and uphold certain fiduciary principles.  You are paid by one party but, your allegiance is to a larger group that has not compensated you in cash and/or kind but expects your human values to trump monetary value.     Auditors get paid by the client but, the general public is expected to believe the audited financial statements meet certain standards and do not serve the selfish interests of the paying client. Equity, fixed income and alternative investments analysts get paid by companies and the public is expected to believe the published reports reflect the honest, selfless view of the analysts and not the business and personal interests of his/her employer who pays the analysts' wages and bonus.  A boss of mine once upon a time called equity research a 'game.'  Lying to