Dialectic Africa Analyst

Dear Readers:                          Stock Markets are a reflection of investors'  near-term  perception of the country's economy and business environment.  The business environment encompasses holistic corporate health and availability of tangible, viable business opportunities across multiple sectors in the country.  A stock market can be equated to the 'pulse' of a human being; a very silent messenger with a very loud message.  Every living human being has a pulse; this is typically the first thing checked to determine if someone is still alive.  A pulse is an afterthought until it gets weak and then it becomes the most important vital sign.  A stock market's daily index movement is an afterthought to a President/Head of State until it points in the downward direction on a recurring basis in excess of three months.  A persistently downward stock market index speaks loudly about a country's economic fortunes, business environment and corporate health a

Dear Africa interested professionals: MTN Nigeria finally listed 20.4 billion shares on the Nigerian Stock Exchange (NSE) (after being compelled to do so by the Nigerian government as part of a regulatory settlement) at a price of N 90.00 ($0.25) on May 16, 2019 .  The listing was part of the punitive measures taken by Nigeria's telecom regulator in the second half of 2015 due to the refusal of MTN Nigeria to fully comply with its directive to deactivate unregistered sim cards.   Despite the involuntary nature of the listing, the Nigerian Stock Exchange is celebrating the listing as a positive and immediately added MTN Nigeria to its Premium Board.  Developments since listing of MTN Nigeria's shares less than two weeks ago have been anything but positive.  Let me kick off with trading related issues.   1.            MTN Nigeria refused to do an Initial Public Offer (IPO)  and instead opted for Listing by Introduction .  All this does is alienate and frustrate in

Dear Africa Interested Professionals:   Access Bank has completed its acquisition of Diamond Bank .  This is the second 'sick' Nigerian bank that Access Bank has acquired in the past seven years with the help and approval of the Central Bank of Nigeria.  The first one was Intercontinental Bank.   Find below things to ponder on: 1.  The new Access Bank will in a month's time - May 2019, have to pay $209,000,000 ( N 75.2 Billion) as final payment to Diamond Bank's 2014 Eurobond holders.  The principal of $200,000,000 and final semi-annual interest payment of approximately $9,000,000 (N3.24 Billion) .   This figure is more than the total net interest income (before impairment charges)  generated by Diamond Bank for the first three quarters of 2018.  The figure is also more than the depreciated value of all the plant, property and equipment (PP&E) on that Diamond Bank had as at September 2018 of N68.2B .   Access Bank is going to bear the brunt of this repay

Dear Africa Interested Professionals: I will endeavor to be concise because I have a lot to say and not enough time to do so. I wrote in my last article on this blog three weeks ago, that the CEO of Diamond Bank should resign for the sake of the bank's continued existence as a going concern.  While my wish has now become reality, the manner has set many bells ringing.  You remember that boyfriend that said "if I cannot have you, no one will?"  The girlfriend ends the relationship with the boyfriend and the boyfriend eliminates her as a form of last revenge.  Diamond Bank being acquired ( merger frankly has no place in this discussion) by Access Bank has pretty much put Uzoma Dozie in the history books as the last CEO of Diamond Bank.  If he had to ignominiously resign as the CEO of Diamond Bank, it would not be for someone else to take over, no matter how capable apparently.  If Uzoma goes down, then Diamond Bank must go down with him.  The seat he waited for si

Prologue I have utmost respect and regard for Pascal Dozie and his achievements within the Nigerian business environment and the way he conducts himself without craving for visibility and adulation. The bank he founded is now a publicly listed corporation with over one hundred thousand shareholders who have invested in the bank and expect the bank's executive management to align their interests with that of the shareholders and act in their fiduciary interest.  The desire of ONE should not destroy the financial investment of MANY.  While I expect Pascal to be happy that his son is now the CEO of the bank he founded, I doubt he will be happy that the bank he founded is huffing and puffing (under the leadership of his son, Uzoma) when it should be rising and shining given the bank's compelling strategy, customer base and goodwill.     Investors understand that equity investments are risky and all funds may be lost just the same way a woman understands that she can d

Dear Africa Interested Professionals: I will make this one quick while leaving you enough reason not to comfortably believe the earnings provided to you by the management of FCMB.  1. FCMB has delayed its Q3 result on the basis of the result being audited and formally made an announcement to this effect on October 17.  Finally, it releases the delayed result that is actually unaudited like the other banks that had released their Q3 earnings over a month ago.  This is never a sign of honesty.  2. FCMB has struggled to generate pre-tax income of N7.1B over the first six months of the 2018 fiscal year.  Suddenly, over the period July 1 - September 30, 2018, FCMB tells the world it has generated pre-tax income of approximately  N7.7B.  In my experience covering African companies, most of the time in scenarios like this, I uncover an act of desperation and chicanery somewhere embedded within the financials to tell a better story than the reality of the day.  FCMB has not failed to di

Dear Africa Interested Professionals: Both banks that are the subject of this article, currently have CEOs that are sons of their owners/founders: Subomi Balogun for FCMB and Pascal Dozie for Diamond Bank.  Both CEOs were selected by their fathers and  groomed  for the top corporate office they now hold.     Ladi Balogun has been with FCMB for 18 years consecutively (post business school) and Uzoma Dozie has been with Diamond Bank for 20 years consecutively.  The former has been the CEO of FCMB for approximately 12 years and the latter has been the CEO of Diamond Bank for four years.  Now lets get down to the crux of the matter.  I have always been against the running of companies in Africa by children of the owners and/or founders.  This is not driven by any inherent form of incompetency; but, the bleak expectation for shareholders when  family interests are pitted against shareholder interests  as they often are on an almost daily basis in companies of this nature and i