@ All

Please, let us use this thread to educate and enlighten ourselves, especially the "newbies" in the stock market.
So, if you have any thing that you will need clarification on, post the questions here, and hopefully you will see people putting you through.

Allow me to bell the cat. Pleae when they say a company is offering 1.25 billion naira offer of 50k each, what does that 50k represent ?.

how do one know the worth of is shares let say for example if one has bought the last inter bank shares 3,000unit for 40,500naira at 13.50kper share what is going to be is worth when their capital price is 25.00?pls can anyone help out on how it goes

hello
with reference to ur first question the 50k represents the actual worth of the share while quoted price is the is the market price the difference between the two is the share prenuim and secondly if you bought 30,000 units of intercont bank shares @13.50 kobo all you need to do is get the current market price and multiply by the total number of unit you purchased which translates to aprox 75k(using an average market price of 25naira)
cheers

How can one determin a stock that is over or undervalued. How would one know the the companies with good fundamentals. How would one calculate PE and EPS and where is the easiest way to get coy info. and how to use them to determin the future price of a stock.

@skintom77,

Thanks so much but I must say i'm still not cleared.

@ all

Take the NAHCO public offer as an example : "90,000,000 ordinary shares of 50kbo each at N17.50K per share[/B]

Whats the difference between that N17.50 and 50 Kobo ?. My own interpretation of the above statement will be :

90,000,000 = Total Number of shares availabe for sales

N17.50 = The present amount that each share will be sold for

50k = I don't know this one

PS : Please is it appropriate to use the word [b]share and unit interchangeably?. Do they mean the same thing in stock market?

Please enlighten me

@ MT,
the 50k is the actual value of the stock. Assuming u bought 10,000 units of a stock at 17N, if the company liquidates or close down and there is need to pay u for ur investment, u will be paid 50k x 10,000 and not 17N x 10,000. Pls gurus can put it in a beeter language.

@all gurus
Ans my above question

the 50k is the nominal value of the shares, that is, a basis on which the ownership of the company can be shared amongst the owners for the purpose of transfer in future. if the company liquidates, it does not mean u will get 50k per share, it means whatever the company as left that can be shared will be divided by the number of outstanding shares of the company and shared amongst the owners.

the current market price e.g N17.50k is the amount an average investor is willing to pay to own that 50k portion of the company

@MT
the words shares and units can be used interchangeably, they mean the same thing in the world of stock investment

Thanks WALCOM & kingzy, but it seems you have a differing interpretation of what the 50k represents. Can more gurus in the house please contribute to know which side i have to swing to. Thanks.

How can one determin a stock that is over or undervalued. How would one know the the companies with good fundamentals. How would one calculate PE and EPS and where is the easiest way to get coy info. and how to use them to determin the future price of a stock.

Besides I'm very much interested in this question posted by KINGZY as well

@ posters
All posters to this thread have done a tremdous job. but i need to make one or two clarification that may help us all:

1. the 50k quoted in most shares is the NOMINAL VALUE of the unit share of that company as quoted in the memorandum and articles of association of the company during incorporation. in the accounting world, it is called BOOK VALUE OF THE SHARE. it has no signficant role in the share value.

2. a poster posited that the 50k is the amount payable to any investor at liquidation of the company. this is ABSOLUTELY UNTRUE. the liquidation value of the assets of any company is determined by (TOTAL ASSETS-TOTAL LIABILITIES-PREFERENCE SHAREHOLDERS CAPITAL)/NUMBER OF SHARES. so the 50k0b0 plays no role in determining the liquidation value of any share

3. a poster asked how to determine whether a share is overvalued or undervalued. this question is a question that THE BEST INVESTOR IN THE NIGERIAN MARKET CANNOT DETERMINE. why? the MARKET IS NOT EFFICIENT. what do i mean by market inefficiency? it simply means that ADEQUATE AND ACCURATE INFORMATION ARE NOT READILY AVAILABLE TO INVESTORS IN NIGERIA. hence moribund companies have their share prices SKYROCKETING IN THE NIGERIAN STOCK MARKET. however, one can analyse the financials eliminate some fraudulent or window dressing made to the account and adjust downward all intangible assets in the account. take a market survey of the performance of the company's product in the consumers market and determine whether they are improving or not. you can further obtain information on plans by the company to launch a new product and CRITICALLY ANALYZE the PROBABLE SUCCESS OF THE PRODUCT. carry out trend analysis of the compay's prior year performance among others. better still contact a knowledgeable person to carry out the research for you (BUT SUCCESS IS NOT GUARANTEED).

4. To determine the PE and the EPS, you need to have the company's audited account at hand. PE= the market price divided by the EPS. the EPS on the other hand = PAT/Nos of shares. for illustartion, assume company A posted N5,000,000 profit after tax (PAT) result and have 10,000,000 ordinary share capital. while the market price of his share is N15 per share at close of a business day.

it therefore means that EPS= N 5,000,000/10,000,000 = 50kobo per share.
the PE= N 15/0.5 = 30.

i hope i have played my part to this thread. for more information send an email to remmychess@yahoo.com

Cheers

4. To determine the PE and the EPS, you need to have the company's audited account at hand. PE= the market price divided by the EPS. the EPS on the other hand = PAT/Nos of shares. for illustartion, assume company A posted N5,000,000 profit after tax (PAT) result and have 10,000,000 ordinary share capital. while the market price of his share is N15 per share at close of a business day.

it therefore means that EPS= N 5,000,000/10,000,000 = 50kobo per share.
the PE= N 15/0.5 = 30.

i hope i have played my part to this thread. for more information send an email to remmychess@yahoo.com

Cheers
[quote][/quote]

Eri mi wuuu !!!!! Well done jare my brother!!!!

thanks my brother.

I commend the efforts of all the contributors to this forum, pls my own question:

Someone sent me some money to help him buy shares from Public Offer. I have filled the form now but I cant sign the person's signature and he is in a village, I cant reach him soon. What do I do?

It'll be better to sign the form for him now, make a photocopy of the form and when the share certificate is out, you'll have to fill out the transfer form to his CSCS account with the same signature used in buying the shares then.

It's also better to open a stockbroking account with a broker "they'll assist him on opening the CSCS account as well" which will make all his/her transaction easier to handle. I do this most time for pple - though not in 9ja but my broker handles it effortlessly , most times

@femi4love,

That's really a detailed one, and you explained in such a way that virually anyone could understand it.

@All

However, could  someone please state under which conditions that EPS, PAT, and PE could determine if a share is over valued or under valued. (e.g if EPS is greater than PE, what does that indicate, if EPS is lesser than PE, what does that indicate etc)

Also, how do we use this result to forecast the share future of a company.

Then, what is the full meaning of EPS, PAT and PE ?

As per the 50k stuff, I still believe in addition to babaife's opinion that it means in case of liquidation, when the liabilities of the company is subtracted from the it's assets the remainder would be shared on the basis of 50k multiply by the number of shares each shareholder owns in that comp. all other thing said by babaife stands,
@ Babaife and other gurus,
where is the easiest place to get company info like PAT and total number of shares of that company. And how can one forecast future value of a share with PE and EPS.

@all

Does anyone know when the share certificates for UBA and First Bank are coming out? I would appreciate some assistance. Thanks.

Wow!!, Thanx a million Babaife, that's was a great emphasis on PE and EPS.
Pls, does this mean that i can monitor my shares?, Secondly If this 50k has no effect, then why quote it on IPOs , thirdly, which procedure do i follow if i want to sell my IPO shares after getting the certificate?,

The usual swift response will be really appreciated,

U guys are the BEST!!!!!!!!!!!!!!

@KINGZY  u ll get PAT easily from the Annual Report of the company u are interested in, some newspapers do publish or write articles on companies. u may also get it there too

@eagleu
just be patient. when it is released you will definitely know, doh i expect a maximum of 6months after the offer, dey might start despatching the certs

@SPARTAN D
tO SELL UR IPO, u need to get ur certificate, then open a CSCS a/c with a stockbroking Agent, present your certificate to the stockbroker, who will accompany it with their cover letter and take it to the registrer.
After sometime within 2 weeks or more the regitrer will verify your signature to confirm if it is the same with D 1 u use in buying the share Ab-initio. if it is correct, the units alloted to you will be posted to your CSCS a/c

After this u can den give ur SB an order to sell part/all your share with/without a price-tag.

Indeed, this is one of the best threads posted recently on Nairaland. Thanks friends!

Hi guys, this is a beautiful thread, very lovely.

I want to open a stockbroking account & I'm looking for agood stockbroking firm . I'd like one that's efficient and whose charges are considerable. also, one that gives some form of margin facility for shares purchae. Can anyone suggest one to me??, I'd be indeed grateful.

What do u think of JAPAUL Public offer?, is it a good buy??, What about Fidelty bank??

You guys are just marvellouse.

Please I need your advice. I have 100,000 naira only to spare and buy share but i don't know which would be a good buy between Dangote and Fidelity and I even heard FCMB would be out this week. Do I spread my money on the 3 or invest all in one and which one is the best.

Please I will appreciate you response and advice ASAP before dangote closes this week.

Thanks.

Myomy;

It all depends on which one will rise fast and stability. DAngote is good but bank shares are the most active in the market. Fidelity bank will be a good buy. And the higher units u buy the more profit u make. Fidelity is cheap at N8 and it gives u the opportunity to buy in volume. My candid advice if u want a short term invest ment, spread it between Dangote and Fidelity bank, may be N50k each or N40k N60k.

Remember if u want to buy Fidelity, please contact me on 08030513655, or "ehie007@yahoo.com" so i will send my personalise form to your mail box, print and fill it and go and pay n any Fidelity branch closest to you.

For the records i work with fidelity.

MT:

@Babaife & femi4love,

That's really a detailed one, and you explained in such a way that virually anyone could understand it.

@All

However, could  someone please state under which conditions that EPS, PAT, and PE could determine if a share is over valued or under valued. (e.g if EPS is greater than PE, what does that indicate, if EPS is lesser than PE, what does that indicate etc)

Also, how do we use this result to forecast the share future of a company.

Then, what is the full meaning of EPS, PAT and PE ?

@ stock gurus, please this question is still pending oooooooo

Can someone provide me with a website address that i can use to view and monitor the daily stock exchange market

ehie007,

Thanks for your prompt response, i appreciate dat and i will definitely contact you as soon as  I make up my mind.  But at the same time I would still want a neutral person to still please advice me.  Since you work with Fidelity you may be a little biased in your judgement.  But I appreciate your advice and will get back to you. Thanks

@ All

Please, let us use this thread to  educate and enlighten ourselves, especially the "newbies" in the stock market.
So, if you have any thing that you will need clarification on, post the questions here, and hopefully you will see people putting you through.

Allow me to bell the cat. Pleae when they say a company is offering 1.25 billion naira offer of 50k each, what does that 50k represent ?.

the 50k is the actual value of the share i.e the share cost 50k e.g you bought a land for 2million, that is the actual cost of the land, but you dont have to sell the land for 2million, you can sell it for 2.5 million or 1.5 million depending on the present value of the land, the land can appreciate and cost more or depreciate and cost less.

the same for shares, it is a share of 50k but valued at 15naira, so you will buy a 50k share for 15naira, if the share appreciates it can go up to 30naira or come down to 10naira if it depreciates.

what makes it appreciate or depreciate? answer is demand and supply. if u need more clarification use the same forum

Myomy;;
thanks, but honestly, fidelity is a good buy but u can ask somone neutral.

Tkia

thumbs up to u guz, dis is one of d best topics.

i jst want 2 ask if Oceanic bank has started giving out certificates.

thnks.

hello mt on ur question on EPS, PAT, and PE ratio, lat me try and simplify.
The PAT means profit after tax, it is the profit a coy makes after they have paid there tax i.e profit - tax gives you profit after tax.

EPS on the other hand means Earnings per share, it is total earnings of the coy or the total profit after tax in relation to the no of ordinary share, it is an investors ratio, u divide the PAT by the No of ordinary share so that u can know the amount of PAT attributable to each ordinary share and it is measured in kobo.

The PE ratio is only a comparison between the market price and the EPs, derived by dividing the market price by the EPS e.g if the market price is 45k and the EPS is 32k the PE ratio will be 45 divided by 32, which will give u 1.41. a coys EPS should not be too low in comparison to the market price.

Hope i have made sense.

Nairalanders,
                   You guys are interesting and you are really doing great work to enlighten ourselves.I gbadun you all.Keep the good work on.I've gained a lot.

thumbs up to u guyz, dis is one of d best topics.

i jst want 2 ask if Oceanic bank has started giving out certificates.

thnks.