Equities listed on the banking sub-sector of the Nigerian Stock Exchange (NSE) suffered slight set-back last week due to the strike and protest organised by labour and civil society groups over the fuel subsidy removal across the country last week.
But market operators explained that just like other sub-sectors on the bourse, the banking sub-sector was greatly affected by low patronage which affected the growth of the stocks. At the end of trading last Friday, only six stocks featured on the NSE’s trading chart.
A check showed that while United Bank for Africa Plc’s (UBA) dipped by 11 per cent, from the N2.60 per share it was on the first trading day of this year (January 3, 2012) to N2.31 per share as at Friday, Access Bank Plc’s shares also fell by 13 per cent to close at N4.70 per share as at last Thursday, compared with the N5.40 per share it opened the year. There was no activity on Access Bank’s share on Friday.
Similarly, while First Bank of Nigeria Plc’s shares also tumbled by 5.5 per cent to N8.57 per share on Friday, as against the N9.07 per share it attained as at closing bell on January 3rd, Zenith Bank Plc’s share also dropped marginally by 1.6 per cent to 12.10 per share at Friday’s close, compared with the 12.30 per share it stood at the beginning of the year.
However, findings showed that equities such as GTBank Plc, Fidelity Bank Plc, Diamond Bank Plc, recorded slight appreciation amidst the situation in the market.
Commenting on the performance of the sub-sector, a Senior Analyst at BGL Plc, Mr. Femi Ademola, expressed concern that the development in the economy may affect the growth of the sub-sector. According to him, the fuel subsidy impasse had created a lot of uncertainty in the market.
Commenting on the performance of the sub-sector, a Senior Analyst at BGL Plc, Mr. Femi Ademola, expressed concern that the development in the economy may affect the growth of the sub-sector. According to him, the fuel subsidy impasse had created a lot of uncertainty in the market.
“I must say that there would be a lot of issue to confront with in the short-term. The ‘cash-less’ policy is going to have a lot of effect on the amount of retail cash to be used for investment. The economy for now looks uncertainty because of the issues surrounding the fuel subsidy removal.
It may affect the amount of funds that would be available for investment. If not properly managed, it may also lead to sell-off on the market. Every sector on the market is going to be affected,” Ademola argued.
The banking sub-sector was the most active last week (measured by turnover volume) with 273.32 million shares worth N1.653 billion exchanged by investors in 695 deals. Volume in the sub-sector was largely driven by activity in the shares of Diamond Bank Plc, Ecobank Transnational Incorporated (ETI) and Zenith Bank.
Trading in the shares of the three banks accounted for 187 million shares, representing 68.41 per cent, 66.8 per cent and 60.55 per cent of the turnover recorded by the sub-sector, sector and total turnover last week respectively.
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