If a business does well, the stock eventually follows. – Warren E. BuffettFundamental Investing
...investment in stocks should be preferred to savings in banks and even real estates as stocks yield more to the investor over time than any of the other two alternatives…
Saving in stocks provide a hedge on inflation as the value of the stocks appreciate as inflation spirals. – Mr. Gboyega Balogun, FCMB
A fundamental investor reduces risk looking for value and growth by looking at the financials of the company. The most important consideration for selecting a good stock for investment is the future earnings potential of the company. A fundamental investor carefully reviews the financial statements of any company before investing in it. The fundamental investor also takes into account the outlook for the economy as a whole as well as the specific industry in which the company is involved. The direction of interest rates is a very important factor in fundamental analysis – Guide to Investing by Robert Kiyosaki.
It is no news that the Nigerian economy has had a net growth over the last 8years. But streamlining ourselves to the stock market, we could trace the growth of the economy by following the All-share index of the Nigerian Stock Exchange which rose from 5,403.39 in March 1999 to 13,605.26 in March 2003. A growth of 151.791% in four years. Further, in the last four years the All-share index recorded a growth of 208.64% from 13,605.26 to 41,992.23 points between March 2003 and March 2007.
As for the Banking industry, the banks speak for themselves. After the end of the consolidations 2years ago, their growth can only be described as geometrically.
Thus the following verifiable news articles give succinct reasons to show that First City Monument Bank is a business doing well. Consequently I expect the stock to eventually follow.
FCMB, HSBC sign $100m Structured Debt Deal, The Punch, April 5, 2007
HSBC Bank Plc has successfully executed a privately placed, non-secured structured debt instrument totaling $100m First City Monument Bank Plc.
It was learnt that the facility was part of a deliberate strategy by FCMB to fund ambitious growth plans in Nigeria through a combination of international debt and equity offerings.
In addition, the bank expects to raise over $1billion in medium to long-term funding over the next 18months.
…The representative of HSBC at the agreement signing event, Mr. Zain Latif, said, “HSBC is delighted to have been involved in this landmark and innovative transaction with FCMB. This deal allows FCMB to enter the international capital markets with a bespoke financing structure. We look forward to working with FCMB as it embarks on its ambitious growth strategy for Nigeria and the broader region”
FCMB Invests N5bn in Tinapa Project, Business Times, April 2 >> 8, 2007
“Many of you may not even appreciate it, but there is a huge development that is about to happen in the state once Tinapa opens.” – Ladi Balogun, MD/CEO FCMB
The management of First City Monument Bank Plc (FCMB), has stated its commitment to invest about N5billion ($39.68million) in Cross River State in the next two years. This is as the bank opens a new regional office in the state in an effort to adequately drive its current consumer banking drive.
…The larger part of the N5billion would be invested in the multi-billion naira Tinapa Business Resort project…
To understand the gravity of this investment, visit Tinapa
FCMB Attracts N10bn Offshore Equity Investment, Financial Standard, March 26, 2007
Some leading institutional investors have acquired 15.81 percent shareholding worth N10 billion in First City Monument Bank Plc.
Leading the team of investors in the acquisition totaling 1.5billion shares is Helios Investment Partners , a United Kingdom-based equity fund with $300 million under its management…
Helios Investment Partners’ investments in FCMB include contributions from other prominent investors such as CDC , an investment arm of the British Government; and several of the world’s leading investment funds based in the United States believed to be Soros Private Equity Funds (Soros is one of the largest and foremost fund managers in the world, read about George Soros on the biographies segment of the sidebar) as well as the Overseas Private Investment Corporation , and agency of the United States Government…
This offshore funds injection into FCMB by reputable professional investors reflects the growing confidence of global investment community in FCMB’s performance in recent years…
FCMB, Alpha Beta Partner on Revenue Scheme, Business Times March 26 >> April 01, 2007
…With this feat, payers can make such payments as dues, fines, and fees at the spot to government agents beyond using the card to confirm their tax compliance status, while Lagos state officers can access such payment information online real time from the comfort of their offices.
The service is available in all branches of First City Monument Bank Plc in Lagos state
Ladi Balogun : A new vista in universal banking. Stockswatch, March 25, 2007, p5
Ladi holds a Bachelors degree in Economics from the University of East Anglia, United Kingdom and an MBA from Harvard Business School, USA. He earlier worked with Deutsche Morgan Grenfell in London, now wholly owned by Deutsche Bank AG as well as Citibank, New York. He joined FCMB as a Senior Manager/Team Leader in the Investment Banking Division of the Bank and rose to become Executive Director Investment Banking Division… He is an astute Banker with about 13 years of uninterrupted experience in investment and commercial banking.
FCMB shares soar at NSE amid speculations, Stockswatch March 18, 2007, p5
Rating second quarter earnings, FCMB looks cheapest in the industry at its current earning – Abayomi Obabolujo, Chief Research Officer, Stockswatch March 18
First City Monument Bank Plc has recorded 75.3 percent increase in its share price since the beginning of the year on the Nigerian Stock Exchange.
An analysis of the bank’s share price reveals that the stock, which opened the year at N4.05, has appreciated by N3.05 as it closed trading on March 6th at N7.10 per share.
Zenon Petroleum to Invest N191bn in Downstream Projects, Financial Standard, March 12, 2007
Zenon Petroleum has secured $1.5billion working capital finance facility for the construction of what might become the largest fuel depot in Africa, investment in retail outlets and acquisition of major marketing companies in Nigeria.
The agreement for the release of the fund was signed with representatives of 10 banks providing an average of $150million each of the working capital facility in Lagos. The financial institutions involved in the deal include BNP Paribas, Access bank, FCMB, First Bank, GT Bank, Intercontinental Bank, Oceanic Bank, Bank PHB, United Bank for Africa and Zenith Bank…
Why Stock Market Remains Low, Financial Standard, March 5, 2007
The goal of the Nigerian monetary authorities of having industry initiated consolidation in the banking industry will soon fructify. Already, series of secret talks are going on. One of these is the one the market believes is going on between First City Monument Bank and Wema Bank. While details of the discussion are still hazy, it is said that all things being equal the talks should lead to possible merger between the two companies…
The strength of FCMB is investment banking and Wema bank has carved a niche for itself in the retail banking over the years. Thus a merger will be mutually beneficial analysts believe.
FCMB profit up 112% in 9months, Financial Standard March 5, 2007
Growth stock investors seek companies that show consistent earnings and sales growth, usually 20% or more each year for the past three or five years. – William O’Neil, 24 Essential Lessons for Investment Success
First City Monument Bank Plc has posted a N4.47 billion profit before tax for the nine months period ended January 31, 2007. The Performance shows an increase of 112 percent over N2.11billion PBT recorded by the bank in the corresponding period of 2006.
Typically, growth stocks have a high-quality, repeated type product or service that generates superior profit margins and a return on equity of at least 17% to 50%. – William O’Neil, 24 Essential Lessons for Investment Success
…while its return on equity based on annualized earnings is back in double digits at over 17%.
“We expect to grow our balance sheet size significantly as we approach the end of the financial year. As our new branches break even and new product lines and relationships gather momentum, we expect to improve our ROE significantly.” – Tunde Shofowora, Head, External Communications, FCMB
Websites
Business Times
Financial Standard
Stockswatch
Tinapa
First City Monument Bank Plc
First City Monument Bank Plc Financial Statements
