Fat Earnings: Zenith Left Big League, GTCO Standing
Local deposit money banks in the tier-1 category have seen price declines in the stock market as a result of a persistently negative sentiment on the tickers. To some analysts, banks are between the devil and the blue red sea over rising interest rate.
While this is expected to boost net margin, the risk of default rate has also increased, causing credit migration to stage 3 as loan quality weakened. Though, banks did stupendously well, risk has increased for lenders as FX losses continue to impacts their businesses. Plus, inflation rate has reduced private sector activities.
Except for Guaranty Trust Holdings Plc, which was priced N1.1 trillion, Nigerian banks have left #1 trillion market capitalisation league on the Nigerian Exchange despite mouthwatering earnings announcements.
Their large profits during the 2023 fiscal year—which continued into the first quarter of 2024—did not alleviate the unfavorable perception of the banking index during recapitalization.
Data from Nigerian Exchange showed that market value of top Nigerian lenders declined sharply due sustained risk off sentiment in the market. Due to shareholder sell-offs during the banking sector recapitalization program, the value of banking stocks has dropped.
According to information obtained by MarketForces Africa from certain stockbrokers who would rather remain anonymous, the selloff will continue until banks reveal their final recapitalization plans. “There is fear of dilution, some shareholders will seek banks valuation adjustment to near true value before they take position”.
Zenith Bank fell to N973 billion, selling at N31 per share, a significant drop from its 52 week high of N47.35. GTCO closed at N38 per share, from 52 week high of N53.95. FBN Holdings Plc has left the space as investor sell spree damaged its market valuation. #Fat Earnings: Zenith Left Big League, GTCO Standing
Lookman Grabs Hat-trick as Atalanta stun Leverkusen in Europa League Final
