Sterling Financial Re-enters NGX at N77 After Share Reconstruction
Sterling Financial Holdings has completed its 1-for-10 share reconstruction and re-admitted to the Nigerian Exchange, stockbrokers said on Thursday.
Officially, the Nigerian Exchange today delisted the company’s 68.50 billion existing ordinary shares and simultaneously listed 6.85 billion reconstructed shares at a reference price of N77.00.
Trading is expected to begin once the NGX opens the post-reconstruction trading window. The exercise followed shareholder approval at the annual general meeting (AGM, a High Court Order and the SEC’s no-objection, and it removed a long-standing corporate-action overhang from the stock.
Stockbrokers at Cowry Asset Securities Limited said the headline move from N7.70 to N77.00 should not be mistaken for a re-rating. The share count has fallen by 90% while the quoted price has risen tenfold, so market capitalization is unchanged at about N527.5bn and every shareholder retains exactly the same percentage ownership.
“The practical consequences are in the per-share data. EPS, book value per share and dividends per share will all step up by roughly tenfold on a mechanical basis, while valuation multiples such as P/E and P/BV remain the same once historical figures are restated.
“Investors who compare unadjusted history with post-reconstruction numbers will overstate growth tenfold, so restating the series is the first analytical task. The near-term focus now shifts to price discovery. N77.00 is a reference point rather than a target, and the stock is free to trade on either side of it once the market opens.
“With far fewer shares in nominal terms, early sessions may see exaggerated moves depending on free float and institutional demand, and the CBN’s easing cycle adds a further variable for the sector’s earnings outlook.
“We view the reconstruction as fundamentally neutral but strategically positive for Sterling’s capital-market profile, and we hold a Neutral / Watch stance.
“A stronger case will require evidence of sustainable earnings growth, attractive returns on equity and a compelling valuation against listed financial-sector peers, which we will assess once trading has resumed and the latest financial performance is available”, Cowry Asset Securities Limited told investors in a note. #Sterling Financial Re-enters NGX at N77 After Share Reconstruction# Sterling Financial Holdings Set to Resume Trading After 10-Day Suspension
