Sunday, 9 June 2013

Hope of Bumper Half-Year Results Spurs Rush for Banks’ Stocks

As investors await the release of the 2013 half-year unaudited results of quoted banks, investigations have revealed an increased appetite for bank stocks in the nation’s capital market.

The popularity of banks’ equities was also attributed to the impressive 2012 results of banks, which investors regarded as one major proof of the recovery of the banks after the 2008 fiasco.
THISDAY checks showed that the increase in share prices of banks is largely driven by the increased demand for banks stocks by institutional investors based on the half-year dividend history of some of the affected banks.
An analysis of the market performance in the last five months showed that chief among the banks, which performed creditably, are GTBank Plc and Access Bank Plc. The two stocks witnessed tremendous price appreciations in recent times.

Known for its good corporate governance practice, GTBank, enjoyed impressive buy action from foreign investors. The high demand for Access Bank and GTBank ahead of the release of their half-year unaudited results sustained their recent gain momentum. Access Bank has gained 20.3 per cent in the last five months closing at N11.45 while GTBank has recorded a gain of 15.9 per cent in the same period. Analysts believed the stocks may witness further price rally as investors continue to take positions.

 As at Wednesday last week, GTBank was traded at N28 as against N25.05 recorded in January.
When compared with the values of their share prices between January and June (a six- month period), most of the banks recorded improved share performances.
For instance, Diamond Bank Plc, which recorded N5.10 price per unit of share in January improved by 26.09 percent as at last Wednesday when its stock was sold at N6.90.
Ecobank Transnational Incorporated also showed some level of improvement in their share valuation.
Its unit of share was sold at N15.75, a 28.95 percent above N11.19, which it was sold in January.
Union Bank Plc recorded a 44.5 percent rise in its share price as a unit of the bank’s share was sold at N13.50 as against N7.50 it was sold in January.

 Analysts said the movement in Union Bank’s share price was probably a reflection of the decision of the bank’s core investors to raise their stake.

 Shares of Wema Bank also experienced a 55.9 percent price appreciation, hitting N1.20 from 53 kobo it was sold in January.
United Bank for Africa Plc is another bank, which experienced share price appreciation in the period under review.

 The bank’s share was sold at N4.56 in January but was last Wednesday sold at N8.50, an increase of 46 percent.
On the other hand, Sterling Bank Plc recorded a 33.3 percent appreciation in its share price between January and June as a unit of its share, which was sold for N1.90 in January was sold at N2.85 last Wednesday.
Equities in the banking sub-sector of the Nigerian Stock Exchange (NSE) proved to be among the best investment in the market in 2012 as most of them recorded remarkable capital appreciation.
The feat recorded by the banking sector last year was largely attributed to the clean-up in the banking system following the reforms by the Central Bank of Nigeria (CBN) and subsequent purchase of the industry’s non-performing loans (NPL) by the Asset Management Corporation of Nigeria (AMCON).
However, analysts said the current improvement in the values of banking stocks is largely driven by a combination of remarkable performance in 2012 full year, hope of better outings in the half year results and the rising interest of foreign investors in Nigerian banks.
Source: ThisDayLive

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