Monthly Archives: July 2016

Sanusi Wants Flexible Exchange Rate System Fully Implemented | THISDAYLIVE

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The Emir of Kano and former Central Bank of Nigeria (CBN) Governor, Alhaji Muhammad Sanusi II, has said the flexible exchange rate regime recently introduced by the central bank is not being fully implemented, just as he warned that targeting a pegged rate will not resolve the current forex problem.

He urged the central bank to allow the forces of demand and supply to determine the true value of the nation’s currency, in line with the flexible exchange rate policy.

He said this at the Risk Managers Association of Nigeria’s (RIMAN) annual conference in Lagos yesterday.

Continue reading Sanusi Wants Flexible Exchange Rate System Fully Implemented | THISDAYLIVE

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A Tale Of How AMCON, CBN Helped Skye Bank Get Into Financial Trouble

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A recent article from Thisday has revealed the major roles three Federal Government agencies played in the current financial troubled waters Skye Bank finds itself in.

The article written by Ijeoma Nworgugu explains in details how several bad decisions by the now resigned Board and Management team led to a major loss of value for a bank in one of the most remarkable financial stories of 2016.

The article blames the controversial role of the BPE, AMCON and CBN inadvertently played in the erosion of capital that is now likely to shareholders of Skye Bank their investments. Here is an excerpt

Continue reading A Tale Of How AMCON, CBN Helped Skye Bank Get Into Financial Trouble

From Bad To Worse: S&P Says Skye Bank Could “Default” In 6 Months

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The new board and management of Skye Bank Plc have been saddled with a huge task of turning the bank around following Central Bank’s revelation that the bank had failed to meet requirements of its regulatory prudential ratios.

The task is daunting considering how difficult it has been for the bank to raise money in the past two years. Things are however about to get even harder.

Ratings Agency, Standards & Poors has released its first rating report on Skye Bank since the CBN midwifed a board and management change at the bank. S&P downgraded the bank to ‘CCC-‘ from ‘CCC+’ citing an inherent risk of a default. Here is an excerpt of the report;

Continue reading From Bad To Worse: S&P Says Skye Bank Could “Default” In 6 Months

Intrinsic Value and Its Relationship to Margin of Safety by KenFaulkenberry

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The purpose of this post is to examine intrinsic value and its relationship to margin of safety. The two go hand in hand, or at least they should. These two concepts are the backbone of value investing and the basis for Benjamin Graham’s book, The Intelligent Investor (affiliate link).

Intrinsic value (a.k.a. fundamental value), is the perceived value of an investment’s future cash flow, expected growth, and risk. In other words, intrinsic value is the future cash flow discounted back to a present value.
While the definition may be quite simple the calculation is much harder or imprecise. Because there are literally hundreds of variables that go into the estimate of intrinsic value, the accuracy of such a calculation is dubious at best. We will talk about how to overcome this dilemma shortly.

Continue reading Intrinsic Value and Its Relationship to Margin of Safety
by KenFaulkenberry