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Top Report
Stock Investing: How to Apply the Analytical Tools to Your Stocks Picking Process(1).
 
In the last issue, we examined the broad winning strategies applied by investment pros to score the kind of successes that earn them their high rating. We identified fundamental and technical analysis as two major platforms of analysis for stock selection and investment decision. Because we are intent on our readers' real success in investing, it will be insufficient to stop there. Questions arise as to how these strategies get to brass tacks application in day-to-day use. If they can't be put to work, you obviously won't benefit from them. Hence, the need to logically pursue this evaluation to the practical level of application by the individual investor. That's exactly the essence: make it possible for the reader to apply these strategies that work, so that he stands a strong chance of getting the results that are possible through them.
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NSE DASHBOARD - Market Indices, Highlights & Insight
Market Review for June, 2007
The NSE maintained a stable outlook in June, 2007, with the All Share Index inching up 3% from 49,930 at end of May to close June at 51,330. In effect, the market generally remained in an upward mood.
A review of gains and losses by individual stocks shows that a bunch of stocks made investors significantly richer over the month, while a handful slipped back, eroding investors' wealth. Top of the money-makers was Continental Re, which powered up 164% (almost tripling investor value), IPWA (146%) Adswitch (113%) and BAICO (103%). Diamond Bank was also a good runner, clinching a manly gain of 78%. See the full charts of Naira Gains and % (Relative) Gains for June 2007. On the flip side, top value losses hit Afroil (34%), Livestock Feeds (26%), NAMPAK (24%) and National Salt (20%). See the full charts of Naira Losses and % (Relative) Losses.
On a sectoral basis, the market proved a mixed bag of sorts. The insurance sector was however more markedly upward, with most stocks in the sector closing the month as net-gainers. This obviously reflects investors' positive expectations from the recapitalisations process and consequent pruning down of the number of operators. Banking stocks also did not disappoint, as most of them trended upward. Most other sectors were less impressive. Our full sector-by-sector review can be accessed here.
INVESTMENT BASICS
From The Masters (2): Turning Bonds Into Gold - The Amazing Investing Success of Bill Gross, America's Most Prominent Bond Investor
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Straight off, it will be right to acknowledge that the Nigerian bond market has lacked steam and may not be ascribed glamour. In the circumstance, you may wonder if there is any point looking at a 'bond expert' when the local market may prove very attractive. If you think so, you may not be totally correct. One, investment is global and you can always invest anywhere you find an opportinity withput limiting your market. Two, our local bond market is not totally inactive and significant volumes of investment are still made by those who understand the market and want to fit bonds into their investment portfolio. The Government has also taken recent actions to use that market and boost the activity level. Thirdly, a balanced portfolio could do with the inclusion of fixed-income assets (bonds) of low to long durations to meet an investor's preferences. More importantly, the investment psyche, tools and strategies that work in one niche can be adapted for application elsewhere. And serioulsly speaking, the fundamental basis of Mr Gross' success in the bond market can help you win big even in the stock market.
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PROPERTY INVESTING
Revealed - 8 Ways a Small Player Can Earn Mega Profits From the Property Market.
Property is a money spinner, we all know, but it's also a high-cost investment. The huge financial outlay it takes to acquire property generally leaves it in the hands of the wealthy. They earn the big money it generates (especially through capital appreciation), leaving those without the financial muscle as on-lookers and usually tenants in their property. But really, is it totally out of the reach of a small player? Not exactly, because there are niches of the Nigerian property market where he can play and still earn good returns. Read this if you're wondering how.
Why You Should Be Interested
If you are seeking to build wealth, a well-diversified portfolio of assets will help you achieve a fortified financial treasure. A decent number of the world's richest people, you probably know, built their wealth in real estate. More importantly, many started small and grew big over time. Their successes owed more to strategy than their capital outlay. The implication: even without much money, you can replicate their success by applying same or similar strategies or, better still, developing an effective self-crafted approach.
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PRIMETIME INVESTING - Youth and Everybody
How to Work Early With a Financial Plan and Why it Pays.
The inability to develop and pursue a serious financial plan, with clear goals, is a major reason a lot of people underachieve their potentials and often end up down-right financially broke. The reality is that a lot of people approach life without a firm determination to succeed and simply take it as it comes - no expectation, no challenge, no direction.
In the huge sea of life, you need a compass to find your way. And there is no better time to begin to get programmed than when at your prime. Begin early to chart your direction and you will find that your destination becomes clearer and more easily reachable. What key dividends do you reap from a planned approach that begins in your formative years?
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INSURANCE - TOOL FOR WEALTH PROTECTION
8 Test Situations Where Insurance Can Pull You Out of Big Financial Trouble.
That's the basic role and objective of insurance - to pull you out of deep trouble when life throws one at you. Seriously speaking, getting occassionally thrown into one crises or another is simply part of life. Insurance is about ensuring that one's back is not broken by any of such life's encounters.
Insurance benefit - that indemnity against the impact of a particular risk - is only available to those who formally buy and pay for a cover (protection). Understandably, the individual can only seek insurance protection when he understands the dangers or risks that he faces and knows the kind of shield that can be provided through insurance. The truth is that insurance (real insurance by a good insurance company) can insulate you from life's many troubles that have the potential to derail or permanently undermine you. Eight of such 'deep blue sea' experiences are examined here to provide an insight into the hard knocks that are possible and how insurance can be a big mitigant and literally your saving grace.
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WEALTH-IN-HEALTH
Stroke: Early Warning Signs That Could Mean the Difference Between Life and Death
With stroke, everybody is at risk. You could delude yourself with a sense of safety because you believe you are young or well. But think again! Statistics show that many middle-aged and even younger or supposedly healthy people have succumbed to an unexpected encounter with stroke. Stroke is also a big killer, while many surviving victims end up with some physical impairment. Is this a message to keep you on edge, waiting for or worrying about a stroke? Certainly not. The exact opposite
is the goal - to equip you with knowledge that should help you live safer, minimise the risk of a stroke and if, by any chance a trigger occurs, have a better grasp to move quickly to save life. Given that the person that suffers the onset of a stroke loses co-ordination and may be oblivious of the problem, your understanding of this health danger may also help you save the life of a loved one! It is your recognition of the problem and prompt action to find medical help that could mean a saved life and minimised damage.
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INVESTMENT Q&A
Q. What do cum-div and ex-div really mean and how are they important?
A. Cum-div is a short form of 'cum dividend' just as 'ex-div' stands for 'ex dividend'. Dividend is one of the two main forms of reward to shareholders in a company. The other is capital appreciation. When a company does well in its operations, shareholders usually get a distribution of some of the profit, by way of dividend. Dividend is usually recommended by the directors appointed by the shareholders to oversee the running of the company, but it is the shareholders that finally approve such payment, usually by a resolution in a general meeting. Such dividend payout could be in cash (called cash dividend) or by distribution of bonus shares (that is, free shares that are not paid for by the recipient) to members.
Because shares are changing hands all the time, there is the bit of challenge in determining who is entitled to a dividend, since a particular stock could have changed hands several times in a financial year. The solution is in what is referred to as closure of register, a statutory requirement for each company to fix a specific closure date which determines the ownership of a stock for the purpose of dividend payment. When a company declares a dividend, it also states the date of closure of its register for that purpose. The person whose name is in the company's register on the closure date is the legitimate benefiary of the dividend. If I buy a share from you just before the register closes and my name is recorded as the owner of the stock, I will be the one to enjoy any dividend already declared. Before that closure, shares are sold 'cum-div', that is, 'with dividend'. The price paid by the purchaser incorporates a dividend already declared but not paid. After that date, the share goes 'ex-div', that is, 'without dividend'. Any body who buys then will no longer be entitled to the dividend because the name on the register on the closure date has earned it.
What this dictates is that when you are buying or selling while a dividend has been declared but not paid, you have to know that you will either receive or not receive the dividend already declared, depending on whether you buy or sell cum- or ex-div. If you sell cum div, you will have no basis to expect to receive the dividend, even if it was declared while you were still in ownership of the share.
Send a question: You can send us a question on a topic discussed in this or any edition of this newsletter or on any subject relating to investments which you may want our opinion on. We will gladly respond to you and where you permit, publish the question and answer. Use this email address: info@acceler8now.com or our online form here.
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CORPORATE MIRROR
First Bank of Nigeria Plc (FBN)
...Truly The First |  |
Nigeria's premier bank, First Bank of Nigeria Plc, has proved to be the investor's delight, providing investment returns that possibly exceed many an investor's expectation. Year 2006 was a particularly resounding one which saw investors walking home with a one-for-one bonus issue and cash dividend of N1.00 per share. The market frenzy that preceded the closure of the register of shareholders spiraled the share price to N72.76 before the mark-down. It was a completely unprecedented performance for the industry and a confirmation of the leadership position of the bank.
FBN has, no doubt, faced major challenges in recent years. As an old financial institution rooted in the core traditional principles of banking, it had to contend with the forays into its market share by the 'new generation' banks which had found newer, faster and smarter ways of getting things done. Interestingly, FirstBank has coped well, dealing with the imperative of renewal and competitiveness. Without losing what it stands for, it today matches the younger banks on their own turf - corporate ambience, tech-driven service delivery, graduate-level staff quality and overall atmosphere of freshness. It's financial muscle remains an edge, enabling it keep the top spot, even while a few other banks aggressively push to dethrone it. However, while a massive branch network across the nation is one of its strengths, it appears to be allowing that advantage slip, as some younger banks pursue a strong network expansion programme that may see them matching or outpacing FBN. All that may change now with the bank's just-closed share offer aimed at raising nearly N100 billion net proceeds. With such fund to invest in expansion, modernisation and technology upgrades, renewed strength is clearly on the way to enable the bank hold to its leadership position.
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