By Nse Anthony-Uko
(Sundiata Finance) – Share prices of four banks, First Bank of Nigeria Holdings Plc, United Bank for Africa Plc (UBA), Zenith Bank Plc and Stanbic IBTC Holdings Plc appreciated by N694.3 billion in 24 weeks over investors’ bargain trading.
The above banks may emerge as best performing banking sector shares for the first half of year 2017 on The Nigerian Stock Exchange (NSE).
By market capitalisation, investors in FBN Holdings have gained N127.1 billion; Zenith Bank, N255 billion; Stanbic IBTC Holdings, N160 billion and UBA, N151.6 billion in 24 weeks.
Similarly, investors in First Bank of Nigeria Holdings have gained 105.7 per cent or N3.50 increase in their share price, followed by Stanbic IBTC Holdings that gained share price appreciation of 106.7 per cent or N16.00. Furthermore, the share prices of UBA and Zenith Bank increased by 92.9 per cent or N4.20 and 55.1 per cent or N8.10 respectively.
The price appreciation in those banks have leveraged on NSE Banking Index that has increased by 51.16 per cent from 274.32 basis points it opened this year to open this week at 414.65 basis points. Aside the above banks, Guaranty Trust Bank Plc (GTBank) have a market capitalisation of N1.05 trillion out of present N11.69 trillion total equities market capitalisation.
Investors reacted positively to the announced $1 billion oversubscribed Eurobond by UBA and Zenith Bank last week. Zenith Bank had issued a five-year senior unsecured benchmark bond of $500 million, which recorded oversubscription of more than 300 per cent while that of UBA’s $500 million Eurobond was 240 per cent over-subscribed.
President, Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, said the above banks management should be commended for consistently policy of paying shareholders interim and full year dividend despite macro economy challenges. According to him, banks operating in the country have continued to benefit from the Central Bank of Nigeria (CBN) foreign exchange intervention.
“These banks have shown there is still hope for nation’s economy despite the challenges,” he explained. Financial institutions have continued to benefit from the CBN newly introduced foreign exchange window that has continued to boost their share prices. Fitch Ratings had said banks’ operating in the country are reaping heavily from CBN newly introduced Investors and Exporters Foreign Exchange Window (IEFX).
According to the report, improved access to foreign currency means that liquidity pressures have, for now, eased for the banks adding that the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) mechanism, commonly referred to as the IEFX Window, appears to be boosting foreign currency supply and the flow of foreign currency liquidity into the banking system.
The report said “foreign currency was in acute short supply through much of 2016 and early 2017, restricting imports and forcing several Nigerian banks to extend maturities on their trade finance obligations. Of 157 listed companies, which traded on the first day of 2017, only 45 per cent of them recorded appreciation in their share-value-year till date as at June 16.
The capital market continued with its impressive performance on Friday June 16, with a gradual recovery of some of the losses recorded in the first few months of the year.
Investors Gain N694bn On 4 Banks’ Stocks
By Nse Anthony-Uko