Risk off Sentiment: Nigerian Banks Lose 26% after Recapitalisation Notice
Deposit money banks (DMBs) listed on the Nigerian Exchange has lost about 26% of their combined market valuation after a recapitalization notice.
Shareholders have been selling their interest after the Central Bank of Nigeria (CBN) announced the recapitalization of banks with international licenses worth N500 billion. Banks that do not operate outside the country are to push their capital base to N200 billion,
The announcement spur aggressive sell down in Tier-1 banks, causing the banking index to lose taste after previous rally that triggered repricing.
“It is worthy of note that the banking index has lost 25.75% since the CBN announced the recapitalization exercise on March 28, 2024 and is down 14.79% year-to-date”, CardinalStone said in its Monday note.
The investment firm also hinted that Friday’s close marked the lowest point in the index since 4, 2023. FBNH has become casualty of bearish play in the stock market as shareholders take the financial services group to court. Zenith Bank’s market value has declined, while GTCO has also recorded price decline.
Access Plc and UBA have also experienced bearish hands on their respective market valuations, just like their peers in the big bank category.
The banking index has been performing negatively despite the fact that tier-1 banks claw back part of the losses sustained from rapid selloffs triggered by weak sentiment.
The financial services industry (measured by volume) led the activity chart with 1.13 billion shares valued at N22.29 billion traded in 22,008 deals; thus contributing 61.38% and 65.06% to the total equity turnover volume and value, respectively.
The conglomerate industry followed with 194.18 million shares worth N2.82 billion in 1,923 deals. The third place was the construction and real estate industry, with a turnover of 130.70 million shares worth N649.96 million in 556 deals.
Trading in the top three equities, namely United Bank for Africa Plc, Access Holdings Plc, and Transnational Corporation Plc (measured by volume) accounted for 582.024 million shares worth N10.571 billion in 8,849 deals, contributing 31.65% and 30.86% to the total equity turnover volume and value respectively.
#Risk off Sentiment: Nigerian Banks Lose 26% after Recapitalisation Notice Investment: Tinubu Woos Samsung with Conducive Environment
