Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Since the currency RNS the Naira has fallen more than 15%. This should have a big impact on AAF.
I believe Naira had moved from a range of 400 to 600. This is more than 15% for sure.
I meant 15% since they put out the RNS. In the last week the Nigerian currency is down over 43%
Does Tinubu have a heart of darkness, or one dancing to an Afrobeat?
Short term, he's been a pain in the Naira
Downgraded by Barclays
Thanks for keeping a close eye.
I have sold which is a real shame as I like the company but the politics and currency are having to much of a detrimental effect on the SP. Good luck all and thanks again for keeping me informed.
"The company said a 1% devaluation of the naira would hit its revenue by USD22 million"
So the approx. 40% devaluation over the past month has wiped about $880m of revenue.
Last year revenue was $5,260m, so devaluation equates to about 16.7% of revenue so far.
Hopefully the devaluation and other measures will bring stability going forward, and sustained growth from a lower base?
I have sold,as far too much uncertainty regarding currencies .
If uncertainty over exchange rates were the main issue, people would surely be buying, because any uncertainty has been eliminated? The time to sell would have been before the devaluation, not after? The naira is now probably close to true market rates rather than some contorted artificial value - it is likely to continue to devalue, as it always has, but relatively slowly. As the company itself has said, this policy of realistic, unified exchange rates is ultimately good for business. It is arguably good for the Nigerian economy generally, despite the short term pain, because it is highly likely to attract foreign investment to Nigeria, boosting confidence, jobs, spending and tax revenue, and maybe infrastructure too - particularly in the oil sector. IF this happens, the short term reduction in the value of revenue (in dollar terms) should be more than offset by an increase in the speed of growth? There are other factors at play here, but selling due to a currency correction seems muddleheaded? Don't invest in Africa expecting stability or consistency from governments!
Devalue your currency and inflate your way out of trouble? Isn't that what Italy did with the Lira in the 80's? Is the Naira the new Lira?
" Isn't that what Italy did with the Lira in the 80's?"
No it isn't. What China did in the '80s might be a better match? Nigeria had a complicated dual value system which kept the currency artificially high. Removing that system allowed the currency to find it's "real" market value and hopefully makes business simpler and more predictable. That's why the company has welcomed it. I don't think Italy did devalue anyway (?), the lira was just very weak and had been since the war. Also, Italy boomed in the '80s - in 1987 their economy was bigger than the UK.
Informative. Thanks BBD
Actually, looking a bit deeper, I was wrong about Italian devaluation - it did constantly devalue against the ERM (effectively the Deutschmark) during the '80s when trying to control inflation. The Nigerian situation looks different. The effect of these measures are not easy to predict, but .
Yeah ... that's what I thought: Italy 'used' inflation to reduce debt burden in the 80's but in the process became poorer. They then thought the Euro would cure their woes but ... well .... "Ciao, Silvio!"