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Nic Bank ....a sleeping giant ???????
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qw25041985
#1 Posted : Sunday, May 16, 2010 7:16:27 PM
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Joined: 5/9/2010
Posts: 1,418
Location: Nai
What is up with this bank.Even after posting impressive results the share price doesnot rally.....Even before the good results the share price didnt rally as most banks do.Is there something a miss with this bank that's not in their financial results.Faida Investment bank in their recent weekly report put it as a recommenrded buy for some short term gains......What are they seeing that i amnt seeing.d'oh! d'oh! d'oh!
Your future depends on your dreams so go to sleep !
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the deal
#2 Posted : Sunday, May 16, 2010 7:30:07 PM
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Joined: 9/25/2009
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Location: Windhoek/Nairobbery
faida analysts my foot aint are they the same pple who were encouraging guys to buy kenre for short term gains...Nic is a good stock to own but there r better options out there i.e equity...cfc...standard chartd...barclays..NBK...based on RSI Nic is oversold hence it can rally any time...
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VituVingiSana
#3 Posted : Monday, May 17, 2010 12:36:53 AM
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Hasnt already rallied since it went ex-bonus & ex-div???
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mukiha
#4 Posted : Monday, May 17, 2010 8:12:37 AM
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qw25041985 wrote:
....Faida Investment bank in their recent weekly report put it as a recommenrded buy for some short term gains......What are they seeing that i amnt seeing.d'oh! d'oh! d'oh!

Beware the recommendations of a broker. They are motivated by commissions earned after trading. So everything is a good buy to them!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#5 Posted : Monday, May 17, 2010 10:11:36 AM
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@mukiha is right... The borkers want commissions... whether it goes up or down...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sparkly
#6 Posted : Monday, May 17, 2010 10:10:06 PM
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Could the good results over 1Q 2009 be as a result of consolidation with the TZ subsidiary?
Life is short. Live passionately.
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VituVingiSana
#7 Posted : Tuesday, May 18, 2010 2:15:09 AM
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sparkly wrote:
Could the good results over 1Q 2009 be as a result of consolidation with the TZ subsidiary?
Tz is a small part of NIC Bank... so I doubt it was the main reason for the boost in 1Q 2010 results
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sheep
#8 Posted : Tuesday, May 18, 2010 7:03:03 AM
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I have always wondered why some banks report blistering 1st quarter results,acceptable 2nd quarter,tepid 3rd quarter and hugely disappointing full year results.
The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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Gordon Gekko
#9 Posted : Tuesday, May 18, 2010 7:34:57 AM
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@sheep, I suspect it is because contingencies are crystallized and depreciation charged at the end of the year?
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winston
#10 Posted : Tuesday, May 18, 2010 8:23:57 AM
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@GG - With level of computerization and need to match revenue to expenses, depreciation will be charged monthly or quarterly at the least..not at year end. A causal look at bank quarterly accounts will show depreciation is charged in the 1st qtr accounts.
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VituVingiSana
#11 Posted : Tuesday, May 18, 2010 9:49:48 AM
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@winston - Are you smoking something stronger than Winstons?

Depreciation should be estimated & provided for quarterly for the banks BUT the audit does bring bring about other issues esp in 4Q.

I know one bank that over-provided in 3Q but the auditors reversed some of the loan loss provisions in 4Q...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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winston
#12 Posted : Tuesday, May 18, 2010 10:32:21 AM
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@VVS- Nice one! Most companies do monthly management accounts and would factor in the depreciation (as a cost of generating the revenue) in that month's accounts. I therefore meant that depreciation will be charged monthly (in management accounts) and if it is not possible to estimate monthly then at the very least at quarter end (for that quarter in statutory disclosures, board papers etc). The year end is still a quarter end. I didnt mean that there is no depreciation charged at year end. Pole for the misconception.

Agree with the objectivity brought in by annual external audits...in unaudited accounts estimates such as depreciation, statutory reserves (insurance companies), asset valuations, bad debt provisions can depend what the preparers of the accounts want to achieve!
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mozenrat
#13 Posted : Tuesday, May 18, 2010 10:33:26 AM
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I think VVS has it.. Auditors will usually recommend some adjustments where they feel that some captions have received erroneous accounting treatments.. I have seen a company revising their unaudited accounts from huge profits to significant losses on the strength of these proposed adjustments.

My view is that if you notice this trend in two consecutive periods, then you'd better stop basing your share purchases on the quarterly results for that particular company... It is an indication of poor internal controls and possible fraud by managers in a bid to impress their boards.
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VituVingiSana
#14 Posted : Tuesday, May 18, 2010 10:48:15 AM
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In the case of this bank... It was extra cautiousness...

This was in 3Q 2008 when the Global Financial Crisis was in full swing... Also the post-election effects were being felt... but by the time the 4Q came around (audits 1Q 2009) things seemed to have improved for them...

Of course, if they had known what was in store in 2Q & 3Q 2010... they might have kept the provisions!

Also... the KRA has an interest coz specific provisions can be used to reduce taxes (tax payable) by reducing profits...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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