Zenith Bank Plc released its 2015 Half year profits showing pre-tax profits rose 25% YoY to N72.2billion. On a quarter on quarter basis, pre-tax profits also rose 18% to N39 billion and by our records one of the highest the bank has ever recorded for a single quarter.
Despite this impressive results, Zenith Bank shares fell 2.9% as the share priced closed at N15.93 and N1.40 off its year low.
Why the drop in share price?
From the chart above, it is quite obvious that the share price dropped just about the same time the results was released. However, the main reason in our opinion was the corporate action which preceded the results. Zenith Bank for the first time announced an interim dividend of 25 kobo per share.
Unfortunately, this dividend did not go down well with investors as it only meant a paltry 1.5% dividend yield. This dividend pay out is also similar with the 25 kobo (interim dividend) GT Bank paid same period last year. Zenith Bank has also paid a dividend of N1.75 this year following the release of its 2014 FY results.
What does this mean?
This just epitomises the  state of the current market. The market currently is not moved significantly by dividend announcement and blow out results. The market is more skeptical about the long term performance of these companies especially as it relates to the ailing economy. The bigger concern remains the Macro situation in the country and the economic direction of the new government. The issue of the exchange rate is still a huge concern for most investors who believe the current depressed prices may well be still high as the potential effect of devaluation is yet to be factored in.