Due to investors' apathy, the value of 14 Nigerian banks' stocks fell by N134 billion
The value of 14 listed banks decreased by N134
billion in the first half (H1) of 2022 due to investors' continued apathy and
divestment from banking equities at the Nigerian Exchange Limited (NGX).
The market capitalization of banking sector big
names like Zenith Bank Plc, Access Holdings Plc, United Bank for Africa Plc
(UBA) Plc, Guaranty Trust Holding Plc (GTCO), and Stanbic IBTC Holdings Plc,
among others, was a major factor in the NGX Banking Index's performance decline
during the study period, according to findings from THISDAY.
According to Mr. David Adnori, vice president of
Highcap Securities, 2022 has been a difficult year so far for listed banks
on the NGX. The sector index has lagged the broader stocks gauge (NGX-All Share
Index: +21.3%) year to date, returning a depressing 2.04% or 8.28 basis points
to 397.79 basis points. More so, the Banking index ranks second worst among
sector indices on the NGX behind the Insurance index.
The values of GTCO and Zenith Bank, followed by
Stanbic IBTC Holdings, appear to have experienced the greatest fall throughout
the reviewed time.
As a result of the stock price dropping by N5.50 or
21.15 percent to N20.50 per share as of June 30, 2022 from N26.00 when it first
began trading in 2022, the market capitalization of GTCO on the NGX decreased
by N161.87 billion.
Analysts ascribed the dismal unaudited first quarter
(Q1) 2022 report and accounts for the period ending March 31, 2022, as the
cause of the drop in GTCO performance in stock price. In its financial report
for the first quarter of 2022, the group declared a profit of N43.21 billion, a
decrease of 5.1% from the N45.55 billion reported in the first quarter of 2021.
In addition, the company announced a N1.51 earnings
per share, a 5.63% decrease from the N1.60 reported in the first quarter of
2021.
Additionally, due to a N3.45 or 13.72 percent loss
in share price from N25.15 per share when it first began trading this year to
N21.70 per share as of June 30, 2022, Zenith Bank's market capitalization decreased
by N108.32 billion.
In terms of market capitalization, Stanbic IBTC
Holdings was in second place with a fall of N31.7 billion, followed by Access
Holdings and Unity Bank with declines of N1.78 billion and N1.05 billion,
respectively, in H1 2022.
Other banks, including FCMB Group Plc, Sterling Bank
Plc, Unity Bank Plc, and Union Bank of Nigeria Plc, reportedly saw a little
uptick in their stock prices on the NGX.
The stock prices of ETI, Wema Bank Plc, FBN Holdings
Plc, and Jaiz Bank Plc have also increased marginally.
In a most recent analysis,
entitled: "Nigerian Banks: Q1 22 earnings review," analysts at
Coronation Research stated that the notion that the "fundamentals of the
banking sector" are appealing has maintained, even as "investor
apathy around bank stocks" prevails. Although bank profits and
profitability have marginally declined in recent years, bank stocks are
oversold.
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