Tuesday, September 20, 2011

Bond Yield to Maturity

Previously week we discussed the bond current yield, this week it is the Bond Yield to Maturity
As a premium subscriber you have access to a feature that makes it easy to search for current bond yields to maturity. 

The yield to maturity (YTM) is a combination of the return or loss on par value plus the coupon. Bonds selling at a discount to par tend to have higher yields than their peers, while the yields of those selling at a premium tend to be lower. However depending on the coupon and timing of entry these metrics will be varied. 

NSE Market Review [12-16, Sept]

There isn’t a stronger signal of this markets search for direction than its sharp reversal on September 14, 2011 after it tiptoed towards 21,000. 
With the dividend yield above 8% and the 10 year bond yield below 10%, this market is clearly ripe for accumulation. The spread between these two product types is less than 1.7%, its narrowest since the last visit to 21,000. In the early days of the correction, this metric was as wide as 7% at the markets lowest point. 

Bond Current Yields

Premium subscribers have access to a feature that makes it easy for you to search for current bond yields. 

The current yield is the interest payment divided by the current price of the bond. A bond with a price below par will have a yield that is higher than its coupon and vice versa. 
You can easily search for these using the bond screening tool. This is useful in the current environment of low interest rates in the money markets. Investing in a bond fund will be advisable as they are able to participate in huge volumes at low transactions costs.

NSE Market Review[5-9, Sept]

With the NSE-ASI closing 0.50% shy of 21,000 last week, a dip below this key resistance point appears imminent. In this sort of scenaro, heavy volumes would signal mass exits, however this does not appear to be the case pointing to cautious accumulation. 
At times like this it is always useful to get a little historical encouragement, volumes today are 15x what they were in 2001. In 2006 they were 5x what they were in 2001.


BroadStreetLagos.Com will be one of the media partners for Africa Investor's (AIs) Index Series awards at the New York Stock Exchange on September 26, 2011. If you are coming look out for our publications.

Africa Investor (Ai) supplies a broad range of investment data, research, broadcast and published content to a growing number of investors with interests in Africa. Africa investor Group provides strategic research, indices, communications and investment publishing services to support its clients investment and communication programmes. 
Through its sister organization, African Investment Advisory the group also provides project advisory services. Operating at the intersect of business, government, international organizations and the media, Africa investor group has a growing network of clients across Africa serviced from regional hub offices in Nairobi, Lagos  and Johannesburg, affiliate offices across the continent and a coordinating office in London.

NSE Market Review[29 Aug-2 Sept]

The market continued its slide this week with a slight uptick on only Friday. Trading may have been limited by the 2 day sala holiday. However, with the confluence of negative events: bombing of the UN by Boko Haram, nationalization of banks, etc its is difficult to identify the common cause for the markets current mood. 
Clearly, it represents a great buying opportunity, fundamentalists, value investors and contrarians will say. The PE Ratio as computed by BSL hovers around 25 for the first time in 3 years, the dividend yield appears to prefer an +8% bias. 

Company Focus: BETA GLASS PLC

The company was incorporated as a limited liability company on 26 June, 1974 and became a public quoted company in February, 1986. The Company engages in the manufacture of bottles and glassware. 
To view information on; 
key executives, go to BroadStreetLagos.com/BG 
Performance Indicators, go to BroadStreetLagos.Com/BG-PI

A premium profile on BroadStreetLagos.com gives you access to the data you need. Over the next few weeks we will discuss more indicators, phrases and companies.

NSE Market Review[22-26 Aug]

This week the NSE-ASI breached 22,000 for the first time since January 14, 2010 (20 months ago). The next resistance point is 21,000 (which was last breached on January 5, 2010). Both occurred within 9 days of each other with the market scaling 25,000 3 months later. 
It will be interesting if recent history repeats itself. While we seek evidence of a stronger reversal it is important to focus on the benefits of the markets move to lower lows.

What is Entreprise Value (EV)

Enterprise value (EV), Total enterprise value (TEV), or Firm value (FV) is an economic measure reflecting the market value of a whole business. It is a sum of claims of all the security-holders: debt-holders, preferred shareholders, minority shareholders, common equity holders, and others. Enterprise value is one of the fundamental metrics used in business valuation, financial modeling, accounting, portfolio analysis, etc. EV is more comprehensive than market capitalization (market cap), which only includes common equity.

NSE Market Review[15-19 Aug]

The market appears to be crawling back after its dip below 23,000, a key resistance point. It seems to have overcome its disappointment in the nationalization of three listed banks. 
It is important to note that the last time the market dipped below 23,000 was September 29, 2010 (10 months ago). How the market behaves in this delicate range is anybody's guess. Its other two resistance points are 21,000 and 20,000 and clearly should be in the rear view mirror of any close watchers.  Prices appear numb to positive reports of company fundamentals as Government and regulator policy actions appear to weigh more on the market. 

Word Focus: What is Nationalization??

Nationalization, also spelled nationalization, is the process of taking an industry or assets into the public ownership of a national government or state.
Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being transferred to the public sector to be operated by or owned by the state. 
The opposite of nationalization is usually privatization or de-nationalization, but may also be municipalization. There isn't a better time to "bottom-fish" this market. However, the tools you need are available only through a premium profile on BroadStreetLagos.com .

Call me on +234708 319 0283 to find out how to change to a premium profile. 

NSE Market Review [8-12 Aug]

Last week’s nationalization of three listed banks seemed to be the push this market had been ignoring. A market that had been on edge for some time briefly appeared to be tottering. It may have been emotional but certainly not irrational. 
It appeared to show its discontent with the nationalization during the first three days of trading, the NSE-ASI dropped some 1,061 points (-4.53%). It then reversed its path in the last two days appearing to pick up the pieces from what may have been an overreation.

Thursday, September 15, 2011

Focus Indicator:NSE-ASI

The NSE-ASI stands for the Nigeria Stock Exchange All Share Index. It is the most widely followed barometer on the Nigeria Stock Market. Although other indexes have been created, the NSE-ASI is the most closely followed for investors seeking to guage the markets mood or temperature.

NSE Market Review [25-29 July]

The market's mood appears cautious but anticipatory. Caution, as the aftershocks of the banking crisis, the markets meltdown and governance issues at corporate level can still be felt. Anticipatory, as the new leadership at the Ministry of Finance is expected to provide common direction to the financial markets. Recently Nigeria Eurobond yields were reported to have dropped in anticipation of this new leadership. 

Company Focus: AFPRINT NIG PLC

The company was incorporated in Nigeria as a private limited liability company on 11th December, 1964 and became a listed company in 1978. The shares are quoted on the Nigerian Stock Exchange. The company and its subsidiaries are mainly into Agricultural developments activities such as cotton cultivation, cotton ginning, manufacturing of edible oil and the supply of Agricultural inputs to farmers and government agencies.

NSE Market Review [18-22 July]

It might be too early to give up on this market. Although higher highs are preferred, the current move to lower lows for the NSE-ASI is not strange. There appear to be four resistance points in the markets near term trading pattern; 25,000 (which has been breached); 23,000; 21,000 and 20,000.

Company Focus: Studio Press

Studio Press is involved in lithographic printing and manufacturing of cartons, light packaging materials like labels and flexo printing such as nylons and poly wrappers.The company was incorporated on 9th July, 1965 under the name of Studio Press (Nigeria) Limited and converted to a public company in 1979.