3 Silent Killers in the Dangote Refinery IPO- Ignore Any One of Them, and You Will Fall into This

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[00:00:02][music] [music] Yeah, good afternoon and good morning, evening wherever you are joining me at this hour. Today I want to discuss on how to trade IPO profitably or how to invest in IPOly and managing risk in any market situation or any market of the world.

[00:00:30]Why? Because you know many investors or newcomers or even those that are in the market they see IPO as just know an entrance into the market is beyond that you know knowledge and here we say IPO we're talking of initial public offer you don't want to come and be defining IPO here because I believe that know the good things that how can you make money from investing IPO is very very important how do you know that this IPO is good or These are the things you need to do because today you know if you go online ahead of Dangote refinary you know public offer a lot of videos from different people are on you know on internet today but since every investment is against the fure and you want to make money and you know that equity once created cannot be destroyed and it's a company that is coming to the exchange also you have seen the history or you have heard or you have read the history of Dangote group know since you know since they came to NGS and that means you need to understand what you expecting what is the weight of this offer you are expecting what is going to make no impact in your life in the economy and also on the Niger stock exchange these are the things you'll be looking at and how can you participate and participate wisely and profitably at the end of the day if these are your question if these are things that are crossing your mind that means investing in you know initial public offer can be profitable but also risky especially if you are concerned about know using your capital. Here is the practical guide to investing in IPO profitably while managing the risk no or losing your money. These are the things that you need to know because it's very very important at this junction because I will tell you that no matter who you are in this market you need to understand how IPO work especally at this time and don't forget that in this market we're expecting a three major IPO that will shape our market one starting from Gang refinary Gango fertilizer and also know um NNPC is also underway yes data not been announced but we know that they also coming up also to come and raise money from this market as we speak. That means we must put all this at the back of your mind as a trader or investor. Even though you're a newcomer or a professional in the market, you must understand if this three biggest IPO of our time are hitting our market and already you are saying that our market is hitting a new alltime high.

[00:03:02]Tell me what this kind of IPOs are bringing to the market. They're going to market more deep also know our markets become know the leading market in Africa with our capitalization and our index jumping above. This is a good news for Nigerian market. How can millions of Nigeria a population of almost 250 million Nigerians participate or benefit from this? It is very very key. But in all this we know that the the value what we're seeing the value we're expecting from this is more than 40 billion dollar investment we're seeing and in the end this company is coming to just only 10% of the of the entire value of the company and what is the benefit from it.

[00:03:43]You need to understand all this so that at the end of the day you be able to make what informed investment decision that will help you to know exactly what you are to do in regards to what this offer that is upcoming because we are all here to what to make money and don't forget that in this market you know you are making money will not stop you from making money and that means if you are preparing for this offer you must know that yes the offer preparing for is not just a Nigerian thing alone this offer that going to go across many African countries and also mature market even in London and that means you this IPO is what a multi- exchange IPA aim at what at no increasing the oil dangote oil refinery capacity and at the same time the fertilizer no production of the company and that means you and I should keep your eyes on this company because the proposed listing will also like I said will be not just only Niger market across Africa and also no beyond Africa.

[00:04:45]But it's also saying that this offer is likely to be listed on London stock exchange and also already is already an insight that we're likely to earn in dollars and also in naira depending where you are. That Nigeria company is becoming a global company not only just in in listing but seen that our products also from this company across the globe and that give you a new face to the Dangote refinery and also Nigeria no oil and gas sector. How will you also benefit from it is very very important.

[00:05:17]I know that this going to boost the capital market but you and I is going to symbolic for us to our worth our investment where we transform where to be created but both for those that are in Nigeria and those that are on the street that will take decision at the right time. That mean this for me is an offer that everyone is expecting and because all eyes on this offer we must also invest what intelligently intelligently profitably not also must manage our risk don't be one-sided investor because I know the combination of this listing alone the dangote refinary dangote no dangote fertilizer and coming of NMPC on the floor going to be a rich market that everyone know in the in the in Nigeria economy will not want to look away from.

[00:06:09]That means we must know make sure that as all eyes are on this offers comment you need to start preparing yourself know and also knowing the right thing to do before the offer was so kick off for us in investor when we mention offer you need to understand also that market come with different phase. Yes, dang industry have been tested and we know what they are doing today. They know when they when they listed sugar dang sugar initially they started with you know earnings dividend payment and that will be the first company that start dividend payment you know we saw it all set plant is also doing now the banks also doing it no I mean the first forward for those that are in what in the consumer sector yeah not for the market for the consumer sector now today we seen that Nestle has also go into that model of dividend But I tell you that today we know what Dangote have created value before the exchange rate knowed that company operation which they gradually coming out of it. We see that the NASCOM where also Dangote has a a strong footprint there. How the company also kind of know transform from no paying just one naira to today 6. Not only that we have seen growth in what in the top line and the profit after tax of this company and we're not surprised that the the global footprint of this refinery today is going to create wealth for Nigerians and all and before you know you do that you must understand how you can invest in this offer profitably and also make money. That mean you must bear you know in your mind that yes everyone talk about you know IPO IPO how do this IPO come? Yes represent venture capital no athlete and all those early investing or dumping and all those stuff retail investor looking for me some run to it and when you subscribe at times no you must understand what it means I will tell you that in investing in public initial public offer timing timing and the market will tell time and the market will tell when I mean time and the market will tell at this point you know personal opinions will be everywhere and that is why I said you have been seeing of videos here and there online but we most listen to where you know give you the right no to participate because in participating in you know India public offer is about just not just buying the right and go and sleep no relatively you need to understand the whole process and also [snorts] you must also know your own responsibility because this a potential company that is always there you know to create wealth for you at the same time to impart the whole nation like I've said earlier at the beginning of this presentation that means we must have at the back of our mind the things that are necessary for you to what to invest you know profitably in this and once you have that at the back of your mind you will able to what to navigate the market anytime any day I will start by saying that yes understand the IPO circle and the risk and that is what I'll say that why IPO know some IPOs people have lost money some IPOs there's lots but one thing is that people lost money in IPO because they come once know with what over hype pricing over high pricing is very very thing that you should also understand this IPO may be priced too high no leaving a little upside for rally you must pay attention to that and also know you also I want to lock up the period no the period expiring yes inside that cell after know 90 to 80 days no offering you kind of putting pressure on the price. Is it the kind of what we're seeing you know why IPOs why you know why IPOs lose money this what I'm to let you know why IPOs lose money I'm not saying that is going to lose money but I'm tell why IPOs lose money no why lose money is because what overhype pricing is overhyped like you understand what it means and also no lock up period of know the offer period things also weak fundamental profitable companies with high valuation [clears throat] it's very very key market timing like I mentioned earlier that's okay no market timing is very very key is it you know that market right after listing you know or is it on an up market instant listing these are very key that you want to know because you are here to manage your work your hard earned money that's why timing is also key and also seen that what is happening that market already at the beginning of this year we have forecast that this year pre- election you're going to expect liquidity and expecting of leading of said that yes our market cap will hit no 200 trillion that already were heading to it already can say fact in the month of April alone we saw the return that was so geometrically and also in the history of Nigerian market April April is the best performing April since NGS this tells you how market has changed and also in all this you want to manage risk because risk also is very very key that's why we are starting what why IPOs no fake or why you know IPOs lose money. These are the things we trying to lay emphasis here so that it will go a long way to guide every one of us. Yes, risk management is very very key. It start before you invest. That's why I'm going risk management start before you invest.

[00:11:35]That's why you must have it because listening to all the videos here and there is not to say sector that will benefit or benefit good no if you can't get the IPO. Yes, there are sector that you can put your money and when they start trading but I tell you why is good but don't forget that in most cases look at refer as a whole if you remember when um no bid bend BBC they can remember Benway Benway statement company know all you can see all that know when they came when they do offer for sale and all that you remember what happened over subscription money were returned and all those stuff also even even the dangote sugar and that I will tell you dangote flour that was little no sold to all you see a lot of over subscription and money will return and people that paid for the dang flour they add over no so you must understand all this that these are also part of risk that why am I money my money down if I can't get it where will I move also only invest in public offer you have research you have done your own assignment it's good that everybody is on online selling but your your simple know your own intuition your own knowledge is very very key here not just know rushing to buy because they say is good must understand the business creating what's the focus of the company what the pro going to use for the proceed going to be used for debt payment or going to for expansion know growing their investment you need to know you know is it for repayment is it just to excite people or just to grow I know that refinary have given us an what they going to do to double world capacity from 650 world to almost 1.7 1.4 okay 1.4 4 billion per day that is sweet is going to generate I will tell you that in the world today before you can't know two or three refiner will be number one or number two it tells you that we have capacity in Nigeria gradually we Niger going to become you know an oil gas which I know that is why you need to know also who is the promoter is very very key as I say only invest in IPOs you have worth research and I said one you know you must look at The red herring post that is ROHP cost of what the use of deposit you know is it for depth payment is less exciting than knowing reward investment you know attention we know promoters holding and also track record we know who is today those are not an issue are things you look at you have to we're telling you have been tested and trusted in Nigeria no last thing in terms of entrepreneurship in terms of listing on the exchange in terms of creating value test of dividend consistency we have seen In other companies that mean this one you see a lot of things going for them financial record you see that making almost how many billion in terms of profit 4 billion can see what it is and you know what that is not in naira you see that this company has also to valuation compare it to PS you can see what happen every oil company in the world compared to see the revenue financial trend revenue of that company profit know the margin over 5 to 3 years. You can see the language is newly listed. We can see where they going. What is the projection? Are they meeting their projection? Are they moving in that when it comes to projection? You must pay attention. Are they entering into a great business premium here? No. In this market, I believe that yes, they have given us an insight of what they have done. We also see Nigeria here. You can see similar, you know, we have seen other business they've run.

[00:15:18]who believe that yes a clear business to see that this company is coming the kind of management we are seeing there is one you must also because the more you understand also the business model of the IPO the better for you and also today no we understand you can say that Niger we have not seen very active refining companies the government owners fingo and other advice we have seen how the business is run and we seen that even The standard was seen in Dangote is global standard not only Africa know how business is run the globe that means it know it match every other international company like po all those walls all those big tech companies that are so running today Nigeria it's also a plus for us yes because every investment is against you know against the future and you are there to make profit you must also look at no to see the two no side to say no strategy for profitability is very very key is it a short-term listing gain you are looking at you as investor because you are there to make money you know are you the one that I want to just buy and just go and wait are you the one that want to buy I sell after listing you must have your own goal will guide you to know exactly what to do because if you're a short-term no investor we looking at short-term no listing gain strategy I believe that one is also very very the risk there is very very high high risk because why I say so now you want to really apply for the IPO with short suspension after that you know you just valuation you just go and sell but also that you know buying also to see that long-term know investor or to hold strategy you want to put your risk is low here invest only you know in profitable well managed companies with what good with competitive advantage also today that in the market if you look at refinary business Niger even in Africa it's like a monopoly it's only one good going to do it in Africa for now sorry we Angola but not as big as this but of size I think Africa is leading but I see also it's a plus for us as a nation and for you and I that are ready to put down money to buy into that you must all look at this that you are there not just there for short-term gain you are there for longterm you also you want to buy and wait your waiting period might be after the offer you want to wait for 6 months for one year it depends on you after the listing then price also cool down also rebounded also so cool down and rebound all these are things we also looking at and also to see also the dividend consistency all eyes are still on the I know the IPO prospect to read what they want to so you can use all the data to benchmark the result when they when it come to the market to list it's very very okay you want to enter and so and still desperate the volatility will come no but you need to hold your IPO that for you there for longterm but I believe that in any no IPO combining the two is very very important and I the best approach your short-term no perspective or short-term gain no strategy or long-term good strategy which is low risk and all but when you combine the two it become better for you to also manage an IPO and also benefit no maximum I take that because when you combine both you know you can see as of see book partial profit on the listing day also you can also keep know a small portion from from a long for for the long term no term if the fundamental are strong also we are seeing that things This are how you should go about it. Then the fourth one here is that also know manage risk of returning no money. Manage risk of returning money is very very manage of returning money. You need to also mitigate against that. You know that also capital preservation model. No manage the risk of returning money. When it's over subscribe money return how long it take. It's very very important that put that one also in perspective.

[00:19:09]Yes. When you know you see that the offer will be over subscribe then you also know whether you are going to put little money to tie it down or or if not okay like I say which sector which industry will I instead of putting the whole money there then later I get let me go invest more than the money will come to them for some months before it come back to you and so it's only you know one company I've seen Nigeria here like they pay even after that they pay interest on the over return fund is it is it um is accounts or one of them I think one of the company you know we have seen it in Nigeria that they even pay interest for keeping that money for a little while if that is happen you also must pay that you know you must you know guide against that returning money after you are very very very important so that at the end of the day you also help you to manage your portfolio if you know that yes it will be over subscription also you must also IPO over over valued okay want to lock off lock up this the sell off. You want to see avoid selling more than a selling avoid selling or buying more than within 80 days. No, you have no way of going around this. It's very very critical that we have all this at the back of our mind. Very very very important so that you can still focus at the end of the day. Then practical step when applying for IPO is very very key. No you must also look at check the know the offer data offer they check the subscription data no higher retail subscriber often lead toward price pumping but no also also more volatility review the anchor investor price. You know these are things that you also pay attention to see what is know if the account investor paid same price as you are paying or is he paying less you know to look at is very very important check if they are also long-term fund that collecting fund is good is that hedge hedge funds also there so may also flip quickly here and there you must also understand the kind of people that are buying the stock no is very very key avoid avoid cheap IPOs that is what is very very important avoid cheap IPO you know low price low price share most time does not because it's cheap you know people don't know that when you say that avoid cheap IPOs people look at oh the price no it's not that but there are things you manage to see the value of this company avoidable when you see that it's too cheap also give a signal so also know how to cut your loss in any investment whether you are doing like post listing and all those stuff but I know that I lang refinery and fertilizer to see in You must factor in also your stop loss is very very key so that you able to know your stop loss is it within 7 to 10% is it the 10% to 15% stop loss that you want to adopt no from your buying price or for a buy price you also have all this you know also very very key also where to say no when and where when to say no and where to say no if you see that yes a company has a negative cash flow or no clear path to profit you need to avoid promoter are selling shares in in the IPO offer or for for sale offer for sale. No, you also have to be very careful when valuation is also over like I said earlier over valuation is very okay when you see valuation is higher than the when you see that the valation is right than the the RI value or the you have to also very careful. Okay. You also try to look at look at know what is happening around the industry and see also that will give you an insight also what to do when it comes to what these are the things you also you should pay attention then some very very important profit profitable IPO you know is also know come with risk and also you have to control that that's why in every investment like capital market come with risk because you have to also be prepared to navigate the risk and that make you diligent also successful investor to ability to the risk read and understand the use of the funds and also the risk assocated with that industry.

[00:23:13]Compare violation with PS like I said earlier if you remember know what is the limit or you want to expose your portfolio to for IPOs have it at the back of your mind know the kind of fund as entering the IPO is it fund from from compan are very very important they are very very important when it comes to you managing all these things is very very important at any given time if a trader or investor you must know what to do on time so that at the end of the day you are not losing away from the market because every investor is in the market to make money for that pay attention to that so that it will help you to make what informed investment decision once you able to do this I tell you that you are good to go as a trader or investor even when the IPO is for medium and longterm or for shortterm you must understand when to draw the cutting where to stop and also what do you want to hold how many% you want to hold is very very key like I said I'm talking about subscription here [clears throat] you If you know that the offer is not going to be available for you, don't tie your money down there. Just really move to other sector and also look at who sector will benefit from the offer that we are just saying is also very very important and uh that is also you know an alternative for you to look at or like me I tell you that how to prepare for an IPO is very very key and which I see that some investor already making that move. work with the right know broker the right stock broking firms no work with them so that they will guide you know go ahead and know or if you need to open CCS account no because in Nigeria now I seen that since MTN have demonstrated it in our market that no certificate is being issued many companies are going that direction that there's no need of preparing for to collect certificate but that is not done abroad immedately you know an IPO they credit your work that's why everybody have That's why you must work with what the right stock brokers know the one that you understand that are listed on the exchange not just because any you see that they license you see sec approve there also NGS finally if they member of NGS also sec approved no work with the right broker is very very important also if you're going to be going to adop booking submit your word submit your indication of interest is very very key so that also part of the planning and do it on know on time and also what is the estimated price you need to work it so that you know how much you're going to budget you know to keep for that these are things that is very very important that we need to know once you're able to do this I'm telling you you are good to go with the right broker you no longer be running es there you know that with the right broker no you have access to the IPO even when yes no it will be done in terms of priority or how much you know that yes with your broker you can get you know some good quantity from what from the offer and that is very good and also like I said if you know with [snorts] the with the possible open of a new account new account like I said like that with that stock booking firm know or no you need to also do that with intent of participating in an IPO it's also good do it ahead before the offer no start this are way to go and prepare for this offer also to submit your an indication of interest this also is on in most of the matic market here also know we also know once you start preparing and start telling or even some can start pay money to the new account they opening so that the will know that yes they are ready it's part of us to show that you interested funding your account ahead of what ahead of offer open is very very important you now also follow up to know they will guide you what to do at a participant and all these are very very important that you need to know and do anytime you want to invest is very very key yes most time also So you know most can also be for that's why they have under that are big you know issuing house and all those stuff this also we can also you know show to know the pricing from them for that more information you get it to own as a participant to know what is right the estimating pricing like I said ear to help you know how much you're going to save and also pay in know in terms of so that you can get no good question and take maximum know you know opportunity to get is very very key at this step also you expect also to know that oh you know I want to buy the price per share is it at 200 naira we're expecting to see as little as 1,000 NRA today you know the price of know in the market is not as big as Dangote refinary we expect to see price lower than or no want to see that pricing is very very important we need to pay attention another conditional offer yes they might to conditional offer No for some people no also okay if you if you pay more but most time offer is when you are not sure of people buy but now we are seeing that yes they like to subscription know both fund individual you know sovereign funds or even within an outside foreign investor participating nobody know how for me the condition offer might not be there because it will open to everyone at the same time yes also no pricing and and location and allocation is very very important. Are they going to give priority towards to investor or investor first? You know these are the things that's why don't under writer or with your top you get know an insight what is happening and pay attention to it and also they will guide you and that's why already they've gone ahead to avoid some major stockers for know for IPO we must also prepare for that so that it will help you to know exactly what to do in this regard so that you and I will also take advantage of it while you also seeing that we're having this with this rally here it will show that a stock that was listed at 1 82 you can see what they have done within know how many months in January less than January or February January you can see the day to date what stock even with know a split of one for one and markdown can see and surpass where they talk before the markdown can see that these are the things that can gain from you know new entry to the market and also if the company is right and the performance also look up pricing allocation is very very key must also look look out for it and also work with you know a stock working firm or issuer that you know that make you to have access to this.

[00:29:45]Another one is that no share trading will begin you know shares you know begin trading after listing. Yes, but I will tell you that it's very very important that most time new IPOs when they list trading will continue immediately market but most time you know they are delay before they list and also some delay know before allocation or don't know but with that going the way of knowming account if it's approved by sec I believe immediately it will hit our our account and everybody want to sell depending on the price they listing or those that know traders and investor will have different go to how to go about for the stock but I tell you that once it's listed trading will start on it but as now it's just an initial public offer that pop let's see how it's going to be worth I believe that when a stock is rightly priced when it comes to listing and company is doing well you about to make money today those that bought into know the first IPO of Zen bank at 10 naira how much is it today if you waited how many years you know is is zen bank in Nigeria don't forget that the life of You know Union Bank and First Bank have been there before bank TV also have at 10 what is the price today you know can see when the price of no came to market with no food at 14 NRA how many years what is the price it depend your investment objective you need to be guided yes even those company that benefit from know from IPOs of of Dangote related company that will be involved in terms of finance don't forget that you know since we're expecting foreign investors into this they are company that will benefit free from because of flow of fund and also know that our banks are highly capitalized. liquidity will call will be part of what no foreign investor coming in would also even the local investor and PFAS for that I believe that with the entrance of Dangote to even the the fertilizer and NPC and others the plans will benefit and also know top broken firms and also the exchange itself no even NGM CS CSS all going to benefit from it that means where are you going to put your money I'll tell you that NGS is a place to put your money because those are likely to benefit from release of IPO of and others and even what is going on in in sector today even most of not kick off someone. So I already have met with that market activities but I believe that these are that also impact positively on you know on companies like even all the company that investment like life of you know um Niger stock exchange you know even the deep capital that just turn around in that operation.

[00:32:19]But I believe that those companies even all the one that are not listed will have to benefit from all these prime market activities or IPOs that also I believe that for investors know look the world the banks are good because of the IPO and also our banks are solid now with the money with what they capitalize also when they start the the fertilizer also existed. I believe that for us to be the first and know here we should have access to it. But the right way to get fertilizer matters you know if you have good cooperative system in Nigeria far farmers and they can get no fertilizer. If government want to really make know to drive agriculture you also make sure that all this cooperative organized to get access to cheaper fertilizer even though it is high market because Nigeria want to encourage food.

[00:33:03]government can go ahead and so for Nigerians and let the distriution channel be very straight using cooperative society they will get it. I believe that also that also impact the farmer that insecurity is the one that is also you know on our agricultural sector the farmer and all that but I see that from also transportation companies and those also oil marketing marketing companies oil and gas company that also the cost of know fleet will reduce and all that also logistic and I believe that for me you know these are should be looking at as a trader or investor I at this point as well in preparing to see this IPO get yourself ready make sure that you have open if you don't have account before open account with stop broken firms that are officially appointed by others so that when the open that we're going to go the mg account to be created no need you are going to buy certificate we should prepare oursel now keep the form look at look out for the idea an idea for the price start working towards that because I said anything in May or latest before July this offer will in the market. I agree that with this we can prepare ourel not just because you want to hear take practical actions by open account keeping money having an idea of I mean you want to buy if you know that you buying much and now that we're saying only 10% of the company going to subscribe where will I put money put on the money at the end the money is not ready to pay interest after they delay the money there because I said the only company I've done it is count I believe if I'm right you know if I'm if I'm not right you can correct import it in Nigeria that after they delay they pay shareholders you know interest for holding their money for that period I believe that we can also avoid as traders or investor we do other things with the money and know that little promotion you can get and get it from there it happen in dang flour it's going to happen in sugar in refinery we don't know but we need to tap play because the demand for that or the expectation is high at the end of the day that will over subscribe for that we'll stop here now say see you on other edition of how to know trade primary market activities, IPOs, offer for sale, right placement and right issue anytime, any day. Bye.

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