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Central Bank has just raised interest rates by 400bps, a very orthodox move at stabilising the currency. Nigerian fixed income is rallying. This administration is serious about fixing the mistakes of the past ten years. Can only be good for the private sector with a long term view. Surely MPNU sign-off is next?
Not so sure this will have much impact. The Naira depreciation hasn't impacted the SP so far as sales and profits are in USD. Seplat are also not looking to borrow in Naira at huge interest rates. They have a decent cash pile. If anything this reads to me that it's smaller peers that are being hammered by the FX rates.
I have no idea what the implications of this report are for Nigeria oil and gas but it doesn't look good or if it will impact Sepl opinions appreciated.
https://politicsnigeria.com/fx-crisis-oil-and-gas-dealers-threaten-shutdown-as-70-of-downstream-businesses-collapse/
Https://www.seplatenergy.com/investors/financial-calendar/
Upcoming events
FY 2023 results
29 February 2024
On value traded of £460,000
177p GBP equivalent share price
The LSE line is a 20% discount. Note also that the official FX rate is now more or less in line with the parallel rate, so this is genuine discount.
Well it’s just shy of 2 weeks before the updates due, imo the big share movements at the end of the day are positions getting ready for the conformation of the deal going ahead. I’m hoping it’s a strait forward thing as there has been soo many twits and turns, is it a possibility that the asset may also be bagged for next to nothing ? Considering the amount of oil that all ready been accumilated. Nice find about the tax laws changing makes it more attractive then it is already. As always G L all regards H.
One thing that is rarely talked about, but probably equals 30-50p in a DCF, is that new PIA tax regime (that Seplat already applied for) works out as seen in the earlier drafts of the proposal. Probably Nigerian speed on this subject as well, but as it's not priced in a see it as a bonus.
Link: https://i.imgur.com/d8rdYZC.png
Hard to know Trek,not quiet sure how the Nigerian listed and London listed shares interact regarding settlement etc.
Anyway that's the largest buy I can remember here.Surely the Exxon deal has to complete this month,hopefully not to many extra 'Christmas Party Funds' being requested in return for signatures.
I don’t understand these big trades here. Another for £2m today. Above mid so likely a buy but where is the float for that. If I run dummy sells it goes NT and likewise for dummy buys. Yet trades for +£500k just pop up out of the blue!
Trek
This is going at Nigerian pace. Still, must be just around the corner!
I think we could get an announcement and a prospectus pretty soon. They must have had time to set the bones out by now if as we had been told that it was just waiting for BoD’s to communicate the political decisions.
Usual caveats
Trek
Wow, +200 000 shares at 143-145p in short notice. Someone wants in, and wants to come in a hurry.
Results are expected around 26th Feb, three weeks to go! It should be very interesting reading. As a minimum, I would expect a confirmation that the acquisition is almost formalized/locally approved with minor formalities remaining.
There are also other catalysts here which should bode well, such as a stable currency as SeaTank mentioned below, ANOH plant and third party pipeline start-ups. One thing that I think will add a lot of hidden value here will be the Exxon staff that will get transferred over as part of the acquisition. Exxon has a history of recruiting the very best. Fingers crossed!
I think if a minimum volume is not breached according to exchange rules the share price reverts to the opening level, so the last few days it has been closing flat
The big news this past few days has been the exchange rate, which now trades in line with the black market rate. The FX demand backlog has almost been cleared. This has been almost ten years in waiting. Terrific news for Nigeria. FDI and portfolio flows should start to return. It's such a big policy delivery, the MPNU sign off pales in comparison.
Limit up +9% in Lagos yesterday, but tanked -5% in UK. Hmmm
We must be extremely close to all being revealed. I'm very very keen to see this Prospectus.
Looks like we're almost there, only days away!
"The $1.3 billion sale divestment of ExxonMobil asset to Seplat is also 98 per cent completed, and would be finalised in the coming days, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said."
guardian.ng/news/1-3b-exxonmobil-seplat-divestment-98-completed/
Up another 10% today !!!
Up over 8% in Nigeria today.
Shares in Nigeria priced equivalent to GBP 228p.
https://markets.ft.com/data/equities/tearsheet/summary?s=SEPLAT:LAG
Very significant chart-wise to get past 148/149.
Highest price for years. We could practically treat this as "blue sky" Nice.
Mmm trek yes there’s something definitely brewing, the spread is all very right - a good sign, I’m guessing the deal will be announced just before the 2 year anniversary, on a different note, good read on how the authorities seem to be getting to grips with the illegal oil refineries that are rife. I hope going fwd this is a ongoing focus of the new goverments promise
Link attached https://punchng.com/nnpcl-destroys-34-illegal-refineries-in-one-week/
As always good luck and is the end nigh 😊regards H.
That’s more like it +£100k of buys in first hour. There’s something happening somewhere that we haven’t picked up yet imo!
Usual caveats
Trek
Something is driving this from Nigeria imo.
£45k of trades on LSE just don’t cut it.
MM’s obviously have a RNS alert as price is up unnecessarily on volumes/trades.
Also comes on the back of consistent rise in sp.
I was expecting 140 before news and +200p after but looks like there are rumours out there and folk in Nigeria have been buying driving London up. After all the arbitrage is a bit silly atm!
Usual caveats
Trek
So is this it ? The spike upwards in Seplat's market capitalisation due to the acquisition we've all been waiting for, or a higher dividend being declared. We'll see.
Patting my own back tonight...
I've had one of those rare trading two days where the plan went well ! Sold all my stake in Seplat at 136 yesterday, bought Dec at 848, sold this morning gaining 8%, bought the original shares back and more in Seplat first thing this morning , along with more UKW and lowered my DEC average, now Seplat is up by over 4% on the day. A well needed bottle of wind with the Mrs tonight )) Cheers and GL all.