The State of the Market Vol 3

Thanks for the comment, keep them coming:

It was believed that the credit crunch could not touch the new engines of growth in the emerging markets including Nigeria. We are no longer sure if this is the case. The contagion is catching.

The recently removed CBN guideline that all banks must operate a December year end has caused inefficiencies in the market. The banks in order to attract funds to shore up their balance sheets had been offering eye popping deposit rates as high as 20%.

Now that the CBN deadline has been moved to 2009, some banks that moved agressively to meet the 2008 deadline are now left with expensive liabilities on their books. How to match these liabilities? Charge high lending rates of course. The cost of money is going up in the market place. It is making it more difficult to source funds for development and entrepreneural growth which is what the country needs to keep things powering along.

We were aware that inflation was creeping up but as far as I understand, this was because of the oil money taps being turned on at the state level. We will now all pay for our greed and consumption mentality.

In a recent meeting, someone mentioned that the NSE index has fallen by 22% since February. In my books, that is a route. A lot of companies are pulling back from their earlier planned stock placements. With the inability to come to the public markets and the difficulty in raising institutional debt funding, a lot of business are going to go through a liquidity crunch. Not good. The general public who have been on a stock market explosion induced binge are going to curb their consumption which will also impact the economy. Not to talk about all the issuing houses and banks left with a nasty stock overhang of stocks that are refusing to be taken up by the market.

Deals are still being done, $180m deal here, $140m deal there. $40m deal in the middle. Mostly real estate. Can such valuations continue to be supported in our currently shaky markets. Can we continue to sell our $1.5m apartments in Ikoyi? Time will tell...

CHAPTER 2 - MY FAMILY IS BACK!!!!

Good morning my pipol,
thanks for the comments, keep them coming. A little laughter in the morning works wonders for the whole day.

Deep into Chapter 2
MY FAMILY IS BACK!!!!!
Oh yes, last week, I was in the UK tidying up, completing the rental of the house, saying hello once again to my family after being away for three months and preparing them for their return to Naija. E don happen oh!!! They have all now been shipped back to leafy VGC (well, very leafy compared to the rest of Lagos) and ensconded in our house with the big gen.

By the way, installation of the gen cost me £400 and after buying diesel worth £50 to test the gen, I was told that my diesel didn't even move the meter from zero so I had better go and buy some more diesel befittting my new status as a big gen owner. Obviously the gen is going to cost more than a second wife...

Anyway, where was I before being distracted by my gen (A Nigerian should sing a song going "you remind me of my gen"). Anyway, the family is home, we have lined up assessment tests with Corona Lekki, Greensprings and Meadowhall, all very proper schools befitting the Lekki catchement area, where my madam can quickly fit into the Lekki Wifes Association via introductory references from very proper 4x4 driving from parents at the school (we don't have a 4x4 yet, we hope they will still accept us), we are seeking membership of VGC Club and I am still doing my 5am morning wake to leave the house 5.45am and be at work for 7am.

At least, let the family be happy, and then I can seek my own happiness...

CHAPTER 2

Today, I moved out of my cousins house in Lekki and into our new (rented of course) house in VGC. I think VGC is good for those coming directly from abroad. There’s a park, a nice Kentucky type chicken restaurant, a very nice (so I hear) VGC Club with swimming pool and gym, clean roads for walking, strolling or jogging and similar butter looking families (looking like they have either just come from abroad or would not blink an eyelid if you say you have just come from there as they go every summer and a number of times out of summer) .

I hear power supply is a lot better in VGC. Water supply is constant via metered water from a treatment plant. Unfortunately there is no power today, so I am writing this by the light of my new fluorescent rechargeable lamp that I bought today at Game in The Palms.

My bank has assured me that I am at a level where I deserve to have my generator bought by them, although considering the size they are proposing, all my salary will now go on buying diesel to feed the thing. I think I’ll get myself a nice quiet and efficient inverter to add to my budding private power plant (makes you feel like a South American drug warlord). Between the super gen, the efficient inverter and my new fluorescent rechargeable lamp, I should soon be able to sell power back to the national grid and single handedly show the way forward towards power supply for all Nigerians (yeah yeah yeah)

But, we are making progress…

COSTS

Considering I am in the process of spending lots of money, the following price list should give you an idea of costs to date

Shipping (20ft container load of belongings UK to Lagos) £3,600
Accomodation (2yrs upfront +10%legal + 10% agent fees + retainer) £23,431
Garden for kids (and me) £209
Air conditioners (£230 each x6 +installation) £1200
Beds (local carpenter, £54 each x3) £162
Matrasses £162
Cooker £628

TOTAL to date £30,000

We have not yet included;
up-front school fees for school
Driver
House Help
Diesel
Inverter

Coming home is no longer just a decision of the heart, it is now also a decision of the wallet. It all adds up, no be small…

Top 80 Trends of 2008

Top 80 Trends of 2008

I wish I could find a magazine that did an article on each and every entry on the list…
Please note no. 1 and no. 49

http://adsoftheworld.com/blog/ivan/2007/dec/28/jwts_list_of_80_things_to_watch_in_2008

Free for all...

The market place is hotting up. All kinds of players, from the US hotshot bulge banks, to the European funding banks, from the boutique players to the local big boys from the Chinese to the Indians and everybody in between, we are all scrambling for Alpha in the Nigerian market. While the going is good, let's all have a party. When the party is over, will the last one to leave please turn the light off...