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Fidelity Bank’s Stock Trading Volume Jumps by 252 Percent on Monday Despite Price Shedding 1 Percent

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Fidelity Bank- Investors King

Investors are jumping on shares of Fidelity Bank despite the bearish trend of the Nigerian Exchange Limited.

The volume of shares traded on Fidelity Bank rose by 252 percent from 7,970,506.00 shares traded on July 1, 2021 to 28,094,407.00 shares valued at N64,532,321.76 on Monday, July 5, 2021 despite the price of Fidelity Bank’s shares moderating slightly by 0.86 percent on Monday to N2.3 a unit.

While it is unclear what led to the surge in transaction volume, it is likely due to insider dealings by directors or related entities. However, Fidelity Bank and other listed companies seldomly disclosed insider dealings instantly but will do so in a few days, weeks, or even months later as seen in recent disclosure filings.

Mr. Nelson Nweke, a non-executive director of Fidelity Bank Plc, has been increasing his stake in the bank in recent months. In June, Nweke bought additional 23,943,440 shares valued at N54,851,860.2.

The non-executive director, who was appointed to the bank’s board on January 1, 2021, had previously added 13,005,700 shares worth N26.922 million in the month of May 2021 at an average price of N2.07 per share.  Therefore, the surge in volume is likely as a result of insider dealings.

The Nigerian Exchange Limited gained 0.02 percent or N4 billion on Monday to close at N19.923 trillion.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Guaranty Trust Holding Company Plc Offers 9 Billion New Ordinary Shares

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Guaranty Trust Holding Company Plc (GTCO) has announced a new offering of 9,000,000,000 ordinary shares of 50 kobo each.

This strategic move aims to recapitalize its Nigerian banking subsidiary and expand the group’s footprint in the pension fund administration and asset management sectors.

Details of the Offering:

Issuer: Guaranty Trust Holding Company Plc
Lead Issuing House: Stanbic IBTC Capital Limited
Joint Issuing Houses: Absa Capital Markets Nigeria Limited, FCMB Capital Markets Limited, and Vetiva Advisory Services Limited
Offer Price: ₦44.50 per Offer Share
Total Share Capital: ₦14,715,589,612, divided into 29,431,179,224 ordinary shares of 50 kobo each

Purpose of the Offering:

After deducting the costs and expenses of the offer, estimated at ₦8,010,000,000 (2% of gross proceeds), the net proceeds of ₦392,490,000,000 will be allocated as follows:

  1. Recapitalisation of GTBank Nigeria: ₦370 billion (94.3% of net proceeds) with an estimated completion period of six months.
  2. Growth and Expansion of the Group: ₦22.49 billion (5.7% of net proceeds) for acquisitions in pension fund administration and asset management businesses, with an estimated completion period of 24 months.

Offer Structure and Allocation:

The offer, structured as an Offer for Subscription, will be split equally between institutional investors and retail investors, with each group allocated 4,500,000,000 shares. The issuer retains the right to adjust this allocation based on demand from each investor class.

Key Dates:

  • Opening Date: Monday, 15 July 2024
  • Closing Date: Monday, 12 August 2024

Subscription and Payment:

The minimum subscription is set at 100 Offer Shares, with multiples of 10 thereafter. Payment is required in full upon application.

Market Capitalisation:

  • Pre-Offer Market Capitalisation: ₦1,309,687,475,468
  • Post-Offer Market Capitalisation (assuming full subscription): ₦1,710,187,475,468

Listing and Quotation:

GTCO’s entire issued and paid-up share capital is listed on the Nigerian Exchange (NGX). An application has been submitted to the NGX Board for the listing of the new shares.

Allotment and Status:

The new ordinary shares will rank equally with the existing shares. The allotment will follow SEC rules, ensuring all investors receive the minimum application in full, with any remaining balance allotted according to the determined allocation split.

This offering represents a significant step for GTCO in strengthening its financial base and expanding its business operations, reflecting the company’s commitment to sustained growth and value creation for its shareholders.

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Banking Sector

Central Bank Excludes Bureau De Change in Latest $122.67M Forex Allocation

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The Central Bank of Nigeria (CBN) has excluded Bureau De Change (BDC) operators from its latest allocation of $122.67 million in forex sales.

This decision, announced by Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria, shows the CBN’s evolving strategy towards a more controlled and stable forex environment.

The CBN’s allocation, disclosed in a statement signed by Dr. Omolara Duke, Director in charge of Financial Markets, specified that the forex sales were made exclusively to 46 authorized dealers, predominantly banks.

This is a continuation of the CBN’s recent trend of sidelining BDC operators, a practice that began in March of this year.

In an interview, Gwadebe explained the exclusion as part of the CBN’s usual intervention at the NAFEM window, which currently only includes banks.

He noted, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded, I think, was around March.”

This shift reflects the apex bank’s intent to reduce market volatility and enhance the efficiency of forex distribution.

The exclusion of BDCs from the forex sales has already impacted the market. The naira depreciated further to N1,554/$ at the official market on Thursday.

The CBN’s strategy aims to centralize forex sales through banks, thereby tightening control over the distribution and use of foreign currency.

The CBN’s recent allocation occurred over two days. On Wednesday, the apex bank sold $67.5 million to 27 authorized dealers while purchasing $2.5 million from one authorized dealer.

The bid range for these transactions was between N1,480/$1 and N1,500/$1, with payments scheduled for July 12, 2024.

On Thursday, the bank sold $55.17 million to 19 authorized dealers at a rate of N1,540/$1, with payments due on July 15, 2024.

The CBN emphasized that all forex purchases by authorized dealers must be used exclusively for trade-backed transactions, which must be reported within 72 hours.

This directive aims to ensure the effective use of foreign exchange and prevent market abuses.

The latest forex sales come when Nigeria’s external reserves have seen a positive increase to $35.05 billion as of July 8, 2024.

This is the first time the reserves have crossed the $35 billion threshold under President Bola Tinubu’s administration, reflecting a cautiously optimistic outlook for the nation’s economic stability.

However, the exclusion of BDC operators from the forex sales has raised concerns among stakeholders about the long-term implications for the forex market and the availability of foreign currency for small and medium-sized enterprises that rely on BDCs for their forex needs.

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Banking Sector

UBA Director Aisha Hassan-Baba Invests NGN30.63 Million in Bank Shares

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Aisha Hassan-Baba, an Independent Non-Executive Director of the United Bank for Africa Plc (UBA), has invested NGN30.63 million in the purchase of shares.

According to a disclosure by UBA, Hassan-Baba purchased 1,401,769 ordinary shares at NGN21.85 per share on June 27, 2024.

This acquisition was conducted on the Lagos Nigerian Exchange (NGX), solidifying her stake in the financial institution.

Aisha Hassan-Baba, who holds the prestigious title of Officer of the Order of the Niger (OON), has been a part of UBA’s board, contributing her extensive experience and expertise in guiding the bank’s strategic direction.

Her decision to increase her shareholding is viewed as a testament to her belief in UBA’s growth and profitability.

UBA, with its wide reach across Africa and beyond, has been a cornerstone of financial services in the region.

The Group Company Secretary and Legal Counsel, Bili A. Odum, confirmed the transaction in a press release published on the Nigerian Exchange Group website.

This move by Hassan-Baba comes at a time when UBA continues to expand its operations and innovate its services to meet the evolving needs of its customers.

The bank’s strategic initiatives, coupled with its solid financial performance, have positioned it as a leading financial institution in Africa.

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