Dialectic Africa Analyst

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

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