Market Valuation: GTCO, Zenith Bank in Tight Race

Market Valuation: GTCO, Zenith Bank in Tight Race

GTCO and Zenith Bank extended their shows of strength, and market supremacy in the Nigerian Exchange. The banking stocks are currently topping charts in terms of market valuation.

Due to a burning desire to own banking stocks, supported by an improved business fundamental the two stocks made it to N1 trillion category first time in 2023.

A market re-rating that jumpstarted their valuations has since slowed down, though the equities market tops the investment destination when investors look at Nigerian financial markets holistically.

Who does it better really? GTCO and Zenith Bank Plc’s rivalry often attracts attention and the future actually looks interesting for their shareholders.

The two classy financial service boutiques are masters of innovations in the banking sector but to a different degree, with 0.8% beta each, both financial services juggernauts have similar risk profiles.

They also have a higher capital position above the regulator’s requirement.

In the stock market, Zenith and GTCO valuation has inched closer than what the market experience in the first half, and some equities analysts are betting that GTCO Plc would remain the most valuable by equities market assessment.

For the two strategic lenders, overtaking is allowed. GTCO has won and lost the baton. The same can be said of Zenith Bank – currently slightly valued above the orange-branded financial institution.

‘Key man risk’, analysts said is one of the major drivers of the new share re-rating as bulls as investors trading the highs and the lows continue to search for value.

Historically, Zenith has been a profitability engine in the banking sector, and GTCO has always been a major challenger. But something happened after the orange brand financial service Holdco structure was approved.

Its earnings size has been weak compared with the previous trend until its recent earning surprise backed by improved earnings from core and non-core revenue generating activities.

At the end of the week, the market valued Zenith Bank Plc at N1.046 trillion, its unit price was N33.30 spread across its 31,396,493,786.00 shares outstanding.

In this close race to valuation, GTCO’s worth inched to N1.04 trillion at the same time. The orange brand share price has already jumped above its immediate market rival, closing at N35.35 per share on Friday spread over its 29,431,179,224.00 shares outstanding.

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