- Nigerian banking sector investors gained N544.807 billion as the stock market closed the trading week on a positive note, with the banking sector index emerging as the best-performing index.
- The gains in the banking sector were driven by changes in Nigeria’s foreign exchange operational framework and the suspension of Central Bank Governor Godwin Emefiele, whose restrictive policies affected bank earnings.
- President Bola Tinubu also announced a list of technocrats as special advisers for his economic team, further shaping investor sentiment.
Investors in Nigeria’s banking sector raked in a whopping N544.807 billion in gains from banks listed on the Nigerian Exchange Limited (NGX) as the local bourse closed the trading week positive.
The banking sector index gained 12.59% to emerge as the best-performing index at the close of trading.
Investors were reacting to the changes in Nigeria’s foreign exchange operational framework and President Bola Tinubu’s suspension of Central Bank Governor, Godwin Emefiele, who oversaw restrictive policies that cramped their earnings.
The president also announced a list of technocrats as special advisers for his economic team.
Market performance
Available statistics to Nairametrics showed that the NGX All-Share Index and Market Capitalization appreciated by 5.49% to close the week at 59,000.96 and N32.126 trillion respectively.
Similarly, all other indices finished higher except NGX Industrial Goods and NGX Growth which depreciated by 1.63% and 1.07% respectively while the NGX ASeM index closed flat.
Banking index
The banking index which measures the performance of the banks quoted on the floor of the Nigerian Exchange however appreciated by 12.59% or 66.21 basis points to close at 592.14 points from 525.93 points it closed the previous week.
Nairametrics analysed how the share prices of fourteen banks quoted on the floor of the Nigerian Exchange Group performed during the week. Notable among the banks are Zenith Bank Plc, Access Holdings Plc, FBNH Plc, UBA Plc, GTCO Plc, Stanbic IBTC Holdings Plc, and ETI Plc.
Others are Fidelity Bank Plc, Jaiz Bank Plc, Sterling Bank Plc, Union Bank Plc, Unity Bank Plc, Wema Bank Plc, and FCMB Group Plc.
Data obtained from the NGX showed that the stocks of the banks recorded a combined gain of N544.807 billion in market value during the week under review.
Note that aside from the shares of Union Bank Plc, whose share price closed flat, all other banks recorded an appreciation in market value following positive sentiment on the part of investors excited by the new reforms.
Further checks revealed that banks such as Zenith Bank, Stanbic IBTC, GTCO, Fidelity Bank, and ETI topped the list of gainers during the week.
These banks collectively recorded a gain of N373.810 billion in market capitalisation, accounting for about 68.61% of the combined gain of all the banks.
1. ETI – N51.379 billion
ETI Plc enjoyed a profitable week in its equity performances. The Bank recorded a gain of N51.379 billion in market capitalization during the week from N231.204 billion the previous week to close at N282.583 billion on Friday. Its share price grew to N15.40 per share from N12.60 it recorded the previous week, representing an increase of 22%.
ETI closed its last trading on Friday at N15.40 per share on the Nigerian Stock Exchange (NGX), recording a 1% gain over its previous closing price of N15.25. Ecobank began the year with a share price of N10.60 and has gained 45.3% on price valuation.
2.FBNH-N61.021 billion
FBNH recorded a gain of N61.021 billion in market value from N506.123 billion it opened the week’s trading to N567.145 at the end of trading on Friday, representing a growth of 12.06%.
The share price equally grew by 12.06% to close at N15.80 per share compared to 14.10 as of the previous week.
FBNH ended its trading session at the weekend at N15.80 per share, recording a 1.9% drop from its previous closing price of N16.10. The group began the year with a share price of N10.90 and has gained 45% on price valuation.
3. GTCO- N76.521 billion
GTCO Plc closed the week with a gain of N76.521 billion in market capitalization, from N824.073 billion the previous week to close at N900.594 billion, accounting for 9.28%.
The share price gained 9.28% to close at N30.60 per share from N28.00 recorded as of the previous week.
GTCO closed its last trading session at N30.60 per share recording a 3.9% drop from its previous closing price of N31.85. Guaranty Trust Holding began the year with a share price of N23.00 and recorded 33% on that price valuation.
4. Stanbic IBTC-N90.698 billion
Stanbic IBTC Plc also enjoyed a profitable week in its equity performance. The group recorded a growth in market capitalization of N90.698 billion to close at N673.763 billion at the close of the week’s trading, from N583.064 billion the previous week.
Stanbic IBTC’s share price appreciated by 15.55% to close the year at N52.00 per share from N45.00 recorded a week after.
Stanbic finished the last trading day of the week at N52.00 per share, posting a 3.7% drop from its previous closing price of N54.00. Stanbic IBTC began the year with a share price of N33.45 and has since achieved 55.5% on the price valuation.
5. Zenith Bank- N94.189 billion
Zenith Bank Plc closed the week with a gain of N94.189 billion in market value, from N879.101 billion the previous week to close at N973.291 billion on Friday.
The share price recorded a gain of 10.71% to close at N31.00 per share from N28.00 recorded as of the previous week.
Zenith Bank closed at N31.00 per share on the Nigerian Stock Exchange (NGX), recording a 3.3% drop from its previous closing price of N32.05. Zenith began the year with a share price of N24.00 and has since gained 29.2% on the price valuation.
Others include
- Access Holdings- N43.431 billion
- UBA- N39.329 billion
- Fidelity Bank- N33.900 billion
- Sterling Bank- N19.289 billion
- Jaiz Bank-N14.161 billion
- Wema Bank – N9.257 billion
- FCMB – N8.119 billion
- Unity Bank- N3.506
- Union Bank – Flat
What financial analysts are saying
The former President of the Chartered Institute of Brokers (CIS) and the Managing Director of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe, said the main driver of the Nigerian Banks’ stock appreciation was the beginning of the cleanup programme by the president at the CBN.
He noted that market operators now expect that the reforms in the monetary and forex policy will lead to an inflow of foreign portfolio investment in the market.
- “The changes at the CBN will lead to changes in the monetary and forex policies which is expected to increase foreign participation in the market.
- “Recall that the previous policies of the CBN had hitherto led to a sharp drop in participation by foreign portfolio investors from 65% in 2015 to less than 10% in 2022. The new reform will lead to an increase in appetite by this class of investors in our market,” he said.
Tajudeen Ibrahim, Director of Research at investment firm Chapel Hill Denham, said:
- “Banking index appreciation is a reflection of investor sentiment around a possible clean-up of the sector as indicated by the president.”
The Managing Director of APT Securities and Funds Limited, Mallam Garba Kurfi, noted that the international response to the decision to suspend the apex bank’s chief could have an impact on the domestic market.
He said the direction of the market reflects its response, adding that the action of the acting CBN Governor would also influence the markets going forward.