CBN Investigation: Banks Maintain Positive Outlook on NGX
Banking Stocks Maintain Positive Momentum on NGX After Christmas Break
Banking stocks on the Nigerian Exchange Limited (NGX) sustained their positive momentum as the local bourse experienced a N139 billion dip on the first trading day after the Christmas holiday.
The All-Share Index and the market capitalization both decreased by 0.34 percent to 73,768.64 and N40.367 trillion, respectively. As a result, the year-to-date gain of the All-Share Index slipped to 43.94 percent.
Nevertheless, the banking index on the NGX marginally increased to 889.15 on Wednesday from 887.60 on Friday.
Analyzing the performance of banking stocks revealed that FCMB Group rose by 4.79 percent, Fidelity Bank by 0.95 percent, Guaranty Trust Holding Company Plc by 0.50 percent, and Jaiz Bank Plc by 8.75 percent. Unity Bank Plc shares appreciated by 2.50 percent, while Zenith Bank gained 0.26 percent, and Access Holdings Plc gained 0.22 percent.
On the downside, Stanbic IBTC Holdings’ share value declined by 6.01 percent, Sterling Financial Holdings Company Plc shed 1.11 percent, FBN Holdings Plc lost 1.04 percent, and United Bank for Africa also decreased by 0.39 percent. Both Ecobank Transnational Incorporated and Wema Bank closed flat.
The market breadth, a measure of investors’ sentiment, was positive, resulting in 40 gainers and 21 losers.
Sell-offs were observed in stocks such as UAC Nigeria, DEAPCap, Caverton, Royal Exchange, and Tantalizer during trading, with their respective share prices dropping by 10 percent, 7.25 percent, 6.59 percent, 6.25 percent, and 6.12 percent.
Trading activity saw improvement as the total deals and traded volume increased by 40.55 percent and 2.27 percent to 8,901 trades and 432.91 million units, while the traded value declined by 21.99 percent to N12.94 billion.
In terms of sectors, investor sentiment was positive. The Insurance index led gainers with a 3.06 percent increase, followed by the Oil/Gas and Banking indexes with gains of 0.24 percent and 0.17 percent, respectively.
However, the Consumer and Industrial Goods sectors experienced declines of 0.15 percent and 1.10 percent due to sell-offs.
After the trading session, Jaiz Bank emerged as the most traded security by volume with 35.38 million units worth N58.74 million, changing hands in 203 trades, while Geregu led in traded value at N6.06 billion.
The gainers were led by stocks of Eterna, Axa Mansard, and Multiverse TERNA, with gains of 10 percent, 9.96 percent, and 9.95 percent, respectively.
Meanwhile, fears of a run on the banks in some quarters didn't materialize. There had been concerns that in the aftermath of the Central Bank of Nigeria special investigator report, which alleged that the former CBN governor, Godwin Emefiele, used his cronies to acquire some banks including Keystone Bank, Polaris Bank, and Union Bank, customers would be queuing to withdraw their money.
The report went on to advise the Federal government to take over the banks, strengthen them, and sell them off.
However, visits to some banks' branches, including the head office of Union Bank of Nigeria on Lagos Island, revealed that operations ran as usual, with the exception that most banks' Automated Teller Machines were not loaded with cash as of Wednesday morning.
At the Union Bank head office, the teller told our reporter that only N20,000 can be accessed via the counter.
The ATMs at the First Bank branch on Customs Street, Lagos Island, were also empty, the same with the Wema Bank and Polaris Bank branches on Broad Street.
Also, the CBN, in a statement signed by its acting Director, Corporate Communications, Hakama Sidi-Ali, allayed fears about the security of customers' deposits.
The statement issued on Wednesday said, "The Central Bank of Nigeria has noticed reports, in certain media outlets, about a recommendation for the Federal Government to take over some CBN-supervised financial institutions.
"For the avoidance of doubt, Nigerian banks remain safe and sound. The CBN encourages the public to continue their regular activities without being alarmed by reports that have not emanated from the CBN about the health status of Nigerian banks."
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