Nigeria’s Top Big Banks Value Shrinks 14% to N14trn or $10.3bn
The total market value of Nigeria’s top banks declined by about 14% to N14.171 trillion, equivalent to $10.34 billion, at the close of trading last week.
The Nigerian bourse experienced massive selloffs in mid- and large-cap stocks, dragging the Nigerian Exchange’s entire listed companies downward by N5.64 trillion.
The big banks experienced gravity after a wild rally, with some stockbrokers tagging the pullback as a market correction – the next trading session will determine whether it is brief or could be extended.
Reflecting downbeat investors’ sentiment in financial stocks in particular, the banking index plunged by 10.49% amid all-week sell pressure. Tier-1 banks, which account for three-quarters of the total value of listed banks, lost N2.221 trillion in 5 bearish trading sessions.
GTCO (-15%), Zenith Bank (-11.64%), First Holdco (-20.28%), UBA (8.13%), and Access Holdings (-7.69%) recorded a total loss of N2.221 trillion, reducing their combined market capitalisation to N14.171 trillion.
The breakdown showed that Access Holdings and UBA experienced mild sell-offs compared with GTCO, Zenith Bank, and First Holdco, possibly a market correction for overbought stocks.
GTCO lost N20.40 per share on its 36.55 billion shares outstanding on the local bourse last week. The orange-branded financial company fell 15% week on week to N115.55 on Friday from N135.55 at the beginning of the week.
The activities of sell-side actors reduced GTCO’s market cap by about N746 billion to N4.223 trillion, trading at a significant 13% discount to its 52-week high on the NGX.
Access Holdings Plc lost N103.314 billion, or 7.7% of its market value, as investors sold down their holdings amid expectations of a repricing to align with peers’ valuations.
The largest bank by total assets attracted significantly lower market value on the Nigerian Exchange with consistently huge trading volume, reflecting shareholders’ rotation of positions.
Access Holding Plc, with 54.375 billion outstanding shares, was valued at N1.239 trillion. At the current price, Access is trading at about a 37% discount to its 52-week high in the Nigerian market.
Stockbrokers maintained that while the stock has strong upside potential, realising the value has been difficult due to a lack of competitive profit performance and, then, investor sentiment.
First Holdco experienced significant sell-offs and lost more than 20% of its market value as investor sentiment deteriorated following the Chairman’s increased holdings.
The sell-side actors’ activities aligned with broader market sentiment, given a sharp decline in the NGX Index in the last five trading sessions.
The elephant-branded financial company’s key man risk has increased as Femi Otedola, its chairman, stepped up his total holdings in First Holdco to 20% amid efforts to meet the regulator’s capital adequacy requirements.
It appears that only the First Holdco chairman is buying to keep, as the share price trades at about 33% below its 52-week high, reflecting significant volatility amid heavy trading volume.
Analysis of its trading figures indicates that First Holdco lost N622.351 billion week on week, closing at N2.444 trillion, trading below its highest valuation on NGX over the past 52 weeks. The ticker is trading at about a 33% discount to its 52-week high.
Zenith Bank Plc lost 11.64% of its market value as investors trimmed holdings in Ajose Adeogun-headquartered financial services company.
In absolute terms, the bank lost about N596 billion over the week, while its market cap settled at N4.517 trillion on Friday, according to data obtained from the Nigerian Exchange.
Trading at about 20%, Zenith Bank’s share price had peaked at N136.90, driven by positive investor sentiment ahead of the Q2 earnings release.
A slew of equity analysts estimated significant upside for Zenith Bank, keeping the banking giant on their buy recommendation amidst a tightening profit outlook.
Zenith Bank stock market performance aligned with broader market sentiment, with offshore and local investors’ portfolio reshuffling that lasted throughout last week.
United Bank for Africa Plc (UBA) lost 8% of its market value as investors pulled the plug on the Pan-African lender’s stock amid broader sell-off pressure in the Nigerian bourse.
The Pan-African lender’s share price declined to N39.50 at the close of the trading session on Friday, with a market capitalisation of N1.745 trillion.
Citing strong upside potential from diversified revenue sources, a slew of analysts kept UBA on their recommendation lists. UBA is trading at about 30% below its 52-week high. CBN Mandates Banks, Fintechs to Host Payment Data Locally
