Banks’ Stocks Drop N657bn in Market Value

  • Banks’ Stocks Drop N657bn in Market Value

Weak market sentiment and uncertainty surrounding government policies have erased a total of N657 billion from the market capitalisation of banks listed on the Nigerian Stock Exchange (NSE).

The banking index opened the year with a market capitalisation of N3.63 trillion but has declined by N657 billion to N2.97 trillion by July 31 as investors have refused to jump on Nigerian stocks without a clear economic policy and stability.

The market value of Guaranty Trust Bank Plc dipped by N174.15 billion to N835.85 billion, down from N1.01 trillion it opened the year with.

The newly merged Access Bank Plc lost N14.38 billion from N247.2 billion (Diamond Bank’s valu inclusive) to N232.82 billion.

Ecobank Transnational Incorporated that recently raised fund to further business operation across the continent saw N106.42 billion wiped off its total value to N150.47 billion, down from N256.89 billion.

FBN Holdings wasn’t excluded as the bearish trend wiped off N80.77 billion from the total market capitalisation of N285.37 billion to N204.60 billion.

FCMB Group Plc suffered similar fate lost N5.35 billion from market capitalisaton of N37.43 billion to N32.08 billion, While Fidelity Bank declined from N58.82 billion recorded in the beginning of the year to N46.36 billion. Representing a decline of N12.46 billion.

Shares of Stanbic IBTC Holdings Plc, Unity Bank Plc and Zenith Bank Plc declined from N491.03 billion, N12.51 billion and N723.69 billion to N391.91 billion, N7.72 billion and N574.56 billion, respectively.

United Bank for Africa Plc dipped by N58.14 billion to N205.2 billion.

However, two banks, Sterling Bank Plc and Union Bank Nigeria Plc recorded surged in market capitalisation from N54.70 billion and N163.08 billion to N66.22 billion and N199.48 billion, respectively.

Market value of Wema Bank Plc remained unchanged at N24.30 billion.

Mr. Peter Ashade, the Group Chief Executive Officer, United Capital Plc, said, the persistent bearish position of the market was because foreign investors abandoned Nigerian stocks due to the unclear policy framework.

He, however, said the situation could be reversed if big companies like DSTV, Shoprite, etc could be encouraged to list on the Nigerian Stock Exchange.

“The exchange can also target huge non-listed entities such as DSTV, Shoprite, as operators in the rapidly growing digital economy, to boost newer listings.

“To trigger a rally, we need to sort out concerns around multiple exchange rates, government revenue and other related issues to bolster interest in equities. The market is looking for something to trigger a rally.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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