By Nse Anthony-Uko
(Sundiata Finance) – Jaiz Bank Plc and Union Bank of Nigeria Plc led five listed financial institutions in best performing shares in the month of August despite profit-taking in capital market towards commemoration of the Eid -el- Kabir Sallah celebrations.
The nation’s capital market started on increased volatility due to foreign investor exit, leading to the Nigerian Stock Exchange All-Share Index (NSE ASI) decline by 0.96 per cent to 35,504.62 basis points in August while the year-till-date performance closed at 32.11 per cent.
Profit-taking in most capitalised banking shares dropped the NSE Banking Index by 1.27 per cent to 439.69 basis points in August from 445.33 basis points it closed in July. For Union Bank of Nigeria Plc and Jaiz Bank Plc, three other financial institutions, analysts said the impressive corporate earnings for half year ended June 30, 2017 led to surge in their share prices.
The share price of Union Bank of Nigeria gained 15 per cent or N0.76 to close August at N6.00 from N5.24 it opened for trading while Jaiz bank share price appreciated by 12 per cent or N0.08 from N0.69 to N0.77 per share.
Union Bank of Nigeria had announced profit before tax increase of seven per cent to N9.5billion in half year ended June 2017 from N8.9 billion recorded in half year ended June 30, 2016. The management of Union Bank had concluded plans to raise up to N50 billion in Tier 1 capital through a rights issue during the third quarter.
According the lender, “The capital increase supports UBN’s strategy to accelerate business growth and position itself as a leading commercial bank in Nigeria. The rights issue is expected to launch in the third quarter once all regulatory approvals have been secured.”
The share price of Jaiz Bank gained 12 per cent or N0.08 to N0.77 while Fidelity Bank Plc’s share price rose by eight per cent or N0.10 to N1.35 per share in August. Investors reacted to Jaiz bank gain in profit after tax for the half year to N470.19 million from N114 reported in half year ended June 30, 2016.
Ecobank Transnational Incorporated’s share price gained nine per cent or N1.50 to close at N18.00 from N16.50 while Stanbic Holdings Plc share price appreciated by seven per cent or N2.37 to close at N38.27 in August from N35.90 it opened for trading.
In addition, the share price of Fidelity Bank plc added eight per cent or N0.10 to close trading in August at N1.35 from N1.25 per share.,
Commenting on the performance, the Managing Director, Enterprise Stockbrokers Plc, Rotimi Fakayejo, said investors reacted to impressive earnings by these financial institutions.
He attributed the decline in capital market performance in August to foreign investors pulling out. Cordros capital stated that, “Activity in the market this week broadly reflects the absence of fundamental stimulus with Q2 earnings season now over. We believe market movement ill be driven by developments in the local economy, with intense volatility in the weeks ahead.”