Nigerian Big Balance Sheet Banks Rise by N145bn to N5.079Trn
A strong buy side activities in the equities market lifted the combined market value of the Nigerian top 5 banks to N5.079 trillion, MarketForces Africa reports. The market is pricing these five banks for an amount equivalent to about $3.3 billion at the latest official exchange rate.
Details obtained from the Nigerian bourse revealed that all the tier-1 lenders recorded positive price movements in the local bourse as investors sentiment on banking names improved.
Value hunters, and alpha seekers on the Nigerian Exchange increased positioning in growth stocks; boosted Nigerian big banks valuation by about N145 billion week on week.
Investors were seen taken positions on banking names after previous bearish performance created fresh re-entry. A number of equities analysts said Nigerian banks are currently underpriced compared with their emerging market peers despite strong profit track record.
GTCO, Zenith, UBA, FBN Holdings, and Access Holdings combined worth increased by N144.822 billion to settle at N5.079 trillion, details from their respective share price movements showed.
After the recent past sell down in banking names, some Broadstreet analysts forecasted that investors would start betting on the earnings prospects of big banks that are yet to release their financials.
Surprisingly, the market mood has not changed for Access Holdings which remained lowest priced among its major rivals. Access Plc is currently the lowest valued in the equities market among players in the tier one category.
Last week, investors showed interest Zenith Bank shares as its huge profit and interim dividend boosted buying sentiment. Its board of directors declared N1 interim dividend to increase shareholders returns.
Equities analysts at Broadstreet told MarketForces Africa that listed banks with stronger earnings per share, and returns on equities would most likely attract investors’ attention in the coming weeks despite issues around windfall tax.
Apart from the better fundamentals of these big banks, sentiment is another thing that can drive their share prices higher. “There are other reasons why investors acquire company shares—for control and for share and capital gain—it depends on the motive.”
This reflected in latest price recovery enjoyed by FBN Holdings PLC. The group saw its market value surging after it announced decision to sell its merchant bank business.
Banking Index
The top five banks price appreciation drive banking index higher by 1.26% week on week, a performance that was generally supported by improved sentiment.
Investors with UBA shares gained about N12 billion last week. GTCO popped higher by N54.447 billion, FBNH market value surged by N39.489 billion, Zenith advanced by N28.256 billion and Access Plc added N10.663 billion to its market value.
Market valuation of the Nigerian largest bank by total assets, Access Holdings Plc grew moderately but still underwhelming at distance with others.
In terms of valuation, GTCO, Zenith Bank Plc, and UBA rank stronger, while FBNH and Access Plc remain the most volatile stocks, trading at a steep discount from their peers.
Data from the local bourse suggests that majority of these tier-1 banks are still trading at a steep discount to their respective 52-week high in the stock market amidst recapilisation exercise.
Market price to 52 week high discount gets wider for Access Holdings. Despite its latest price recovery, FBN Holdings is still behind its 52-week high ahead of its annual general meetings.
The financial services group that warehoused FBNQuest merchant bank has released a plan to divest 100% interest in merchant business. This has helped its market re-rating to more than N1 trillion before it reversed uptrend.
Market Valuation
Guaranty Trust Holdings Co: GTCO Plc still ranked ahead of its rival lenders in terms of market value. The group ended trading session on Friday at N1.398 trillion, up from N1.343 trillion, after it market price increased to N47.5 from N45.65 at the beginning of the week.
At the current price, GTCO is trading at less than 12% discount to its 52-week high at the close of the trading session on Friday amidst 9 billion shares offered for subscription at N44.50.
Zenith Bank PLC
Zenith Bank Plc market rose to N1.189 trillion in the market on Friday from N1.161 trillion in the previous week due to positive price movement.
Bargain hunting by investors lifted the Zenith Bank stock price to N37.90 from N37 per share in the local bourse. In total, its market value increased by N28.256 billion week on week.
In the stock market, Zenith bank share is now trading at a 19.96% discount to its 52-week high amidst N290 billion in capital raise via rights and public offers.
UBA PLC
With about N12 billion weekly gain, UBA Plc’s market value increased to N829.335 billion in the equities market from N817.3636 billion in the previous week as price rose by 50 kobo.
The Pan African lender opened the week at N23.90 per share. Bargain hunting on the stock shifted its share price to N24.25 on Friday amidst plan to raise capital from shareholders. UBA is trading at 28.68% discount to a 52-week high as of Friday’s close.
ACCESS Holdings
Access Holdings market value settled at N675.359 billion on Friday, according to data from the Nigerian Exchange from an opening value of N664.695 billion.
The largest bank in Nigeria by total asset lost its popularity among investors amidst delayed earnings release. However, the group released its earnings scorecard after the market was already close.
Its share price rose to N19 week on week from N18.70 at the beginning of the week. At the current stock market price, Access Holdings Plc is trading at more than 38% below its 52-week high.
The share price of the financial services group had climbed to N30.7 before it retreated. The group ranked at most depressed in terms of market value.
FBN Holdings
FBN Holdings Plc market value surged by more than N39 billion last week as investors’ appetite for elephant branded financial services improved.
In the local bourse, the financial company was valued at N987.120 billion, moved along the banking index direction. The elephant branded financial services company increase after it announced FBNQuest Merchant selloffs.
According to data from the Nigerian Exchange, FBNH share price inched higher to N27.50 from N26.40 at the beginning of the week.
Ticker: FBNH is trading at 37.43% to its 52 weeks after a persistent price decline amidst an ongoing battle between the group and Barbican Capital over shareholdings.
The financial stock had peaked at N43.95 during a good time on the Nigerian Exchange before it retreated. #Top 5 Banks in Nigeria Gain N145bn to Settle at N5.079 Trillion Ecobank Advises Businesses to take advantage of its Single Market Trade Hub
