Banking Index Falls Sharply as CBN Directive Provokes Selloffs
Nigeria’s top five banks’ market value declined sharply on Monday as investors reacted negatively to the Central Bank (CBN) directive on forbearance phaseout. The sell pressures heated as investors sought to take cover against the regulator’s latest directive on forbearance granted to banks five years ago.
MarketForces Africa research revealed that the tier-1 banks lost more than N361 billion due to sell pressures that reduced their combined market value to about N7.6 trillion.
Investors rotated out from all the top banks, causing the Banking Index to ease by 403 basis points on the day. The Central Bank of Nigeria issued a directive restricting dividend payouts and foreign expansions for banks under regulatory forbearance.
ACCESSCORP, ZENITHBANK, and UBA hit their limit-down intraday. Details from the Nigerian Exchange revealed that GTCO fell by 0.56%, Zenith Bank shrank by 6.4%, and UBA lost 5.7% of its opening market value. Sell pressure on First Holdco costs the financial services company 6% of its market value, and Access Holdings Plunged by 8.3%.
Overall, banking sector weakness overshadowed gains in select consumer names, tipping the market into negative territory. The current mixed-to-bearish sentiment is likely to continue into tomorrow’s trading session, stockbrokers said.
Yesterday, the Nigerian equities market closed negative as the All-Share Index (ASI) declined by 14 bps to close at 115,269.09 points, trimming year-to-date gains to 11.99%. Market breadth weakened, with 43 losers outpacing 21 gainers. #Banking Index Falls Sharply as CBN Directive Provokes Selloffs Funding Rates Mixed, Banks Deposit N1.6trn at CBN Window
