It’s just January 26th and some stocks have lost more than they did in 2015 and double what the index as a whole has lost. Nairametrics takes a look at the list of the worst stocks this year so far and why they are doing so badly.
FCMB – The Tier 2 commercial bank tops the list of the worst stock this year losing over 37% year to date. Last year the bank lost 32% in total and was one of the worst performing financial servicing company. FCMB stocks is facing a massive sell-off following its warning that profits will be bad. Indeed, investors started getting worried as it continued to delay the release of its 2015 9 months results claiming that it was because it was auditing. However, the rumours continued to swell about at impending disaster of a result until the bank itself confirmed the obvious. The bank has gone on to sack over 300 staff.
Oando Plc – The oil giants is still reeling from the record-setting losses it posted last year following the release of its long-awaited results. The company share price is down 34% year to date already and was one of the second worst performer last year losing about 63% of its value. With the continued drop in oil prices a respite is unlikely for the company and things are likely to be even worse when they eventually declare their full year results.
Unity Bank – The tier 2 (or is it 3) bank made one of the worst decisions in banking history last year when it decided to embark on a capital restructuring exercise. The share price will by fiat rise to N5 from 50 kobo per share. What will happen next was cataclysmic. The share price never went above N5 and in a terrible twist of fate ended the year at N1.12 kobo losing over 80% of its value. Had it remained at the all saving 50 kobo base, it would have still kept its market capitalization in tact. Things have continued where it stopped in 2016 with the share price losing 32% YTD and trading at 72 kobo per share.
Skye Bank – The third bank on our list is thought to be facing a major capital adequacy challenge following a series of bad decisions culminating in loan losses for the company. The company had a rights issue last year and has announced plans to raise capital again. Investors are not buying that rhetoric and have now helped the stock post a 25.3% loss year to date. Last year it lost 41% to close at N1.68. Things don’t seem bright either and investors don’t seem to include the bank as one of those banks that are undervalued. There is probably more room for it to fall here.
Diamond Bank – The 4th bank in the list of 5 worst performing stocks so far has had a turbulent 24 months. It started its dramatic fall from a high of N7 as far back as 2013 when it seemed to be making waves in the retail banking and SME banking space. As its results came out investors started to notice a familiar pattern as most of its loans were consistently not performing helping the bank to provide for about N49.6 billion in likely loan losses between 2013 and 2014. It has provided for another N19.4 billion in the first 9 months of 2015. The bank is yet to issue any profit warning but investors are nonetheless pricing in that risk in its valuation. Diamond Bank has lost 25% of its value so far this month. It was one of the worst performing bank last year, losing about 58% of its value.