The share price of FBN Holdings Plc (FBNH) fell by 18.49 per cent in three weeks, dropping to a single digit following the controversies that resulted in the sell-off of Mr Femi Otedola’s 834 million shares.
Since October last year, the billionaire businessman, before the recent development, was FBNH’s single largest individual shareholder, after acquiring a total stake of 7.57 per cent (2.717 billion units) shares.
Weeks back, Otedola, who is now in power and a controversial investor, offloaded about 834 million units of shares of FBNH in a deal valued at N9.2billion.
FBNH had in a ‘Notification of share dealing by insiders’ signed by its Acting Company Secretary, Adewale Arogundade, on June 6, disclosed this to the investing public.
Insidebusiness. ng had earlier reported that FBNH pooled an impressive performance in 2021 as its share prices rose by 59.44 per cent to N11.40 from January to December. In the five months of 2022, January to May, its shares also appreciated by 4.39 per cent to N11.90.
However, FBNH’s shares, which opened trading at N11.90 as of June 1, have dropped by 18.49 per cent to N9.70 on Friday, June 17. And since June 6, it has further dipped by 7.62 per cent from N10.50.
Its total volume and value of shares, in the weeks under review, appreciated by 36.63 per cent and 15.52 per cent to 9,148,584 million units and N88.69 million respectively.
Otedola’s decision has, however, left many of the investing community guessings.
InsideBusiness.ng gathered that a major investor is coming in to acquire a bulk of FBNH shares, the reason Otedola forcefully backed down. The prominent individual is already on standby, the media also learnt, as Otedola may further retire his shares with FBNH to about three per cent.
In a chat with our correspondent over the controversy, the National Coordinator of the Progressive Shareholders Association, Boniface Okezie, stressed that the stock market is a free market where anyone can come in and go out at will.
“Whoever comes to make the bank grow ultimately is what the entire investors of FBNH Plc need.
“Femi Otedola is not the creator of FBNH nor its bank. Whoever is coming in is just there like any other person. They are not bringing their money to run the bank’s day-to-day operations, so why all the noise about who comes in and who is going out,” he said.
According to Okezie, the bank is already made, and if anyone is bringing in money to beef up the bank’s operations that will be good.
The bank needs institutional investors who can fit in, call the shots on the board and ensure the board’s members deliberate on issues for management to carry out their duties for the growth of the bank. That is all, he said.
But coming in to invest, make your profit, if possible make huge money at the expense of other minority shareholders in the name of a big shareholder, is not right, Okezie pointed out.
An Investment and Portfolio Analyst, Abel Ezekiel, said if the information of a big name coming to invest in FBNH shares is true, it should not be viewed or seen as a concern but as a positive development.
“However, I may term it as a rumour which is good for the bank and the market,” he said.
He said that since the rumour is not about the bank facing an industrial or regulatory crisis, a new investor coming to buy the shares should be welcomed.
Ezekiel noted that the bank has just exited its major non-performing loan(NPL) crisis with Oba Otudeko, posted a record-breaking financial performance and is still maintaining its dominant presence in the marketplace.
“So, based on the above and many other positive factors facing the bank, the divestment of Otedola and readily available of other would-be willing investors coming to take up a large chunk means something that should be celebrated. And in fact, Otedola is such a speculative being, known over the years, who takes joy in pumping and dumping hence should not be taken seriously,” Ezekiel added.
The Nigerian Exchange Limited All-Share Index and market capitalization have dipped by 3.47 per cent to 51,778.08 basis points and N27.91 trillion respectively, in the last three weeks under review, as investors lost over N1 trillion.
Also, sectoral performance was negative except for the industrial goods index which appreciated by 0.14 per cent to 2.197basis points, as all other sector indices closed in the red.
The banking index led the pack shedding 7.51 per cent to close at 393.72basis points, followed by the insurance index which dropped by -2.51 per cent to 176.68 basis points. While the consumer goods index fell by 1.89 per cent to639.38 basis points, the oil and gas index dropped by 1.69 per cent to 542.8 basis points respectively.
In the just concluded week, the Nigerian stock market depreciated by2.68 per cent as the NGX ASI and market cap shed 2.68 per cent to close the week at 51,778.08 basis points and N27.91 trillion respectively.
A total turnover of 940.892 million shares worth N11.49 billion in 20,077 deals was traded, by investors on the floor of the Exchange, in contrast to a total of 1.831 billion shares valued at N19.49 billion that exchanged hands in the previous week in 21,723 deals, according to the NGX.
In its weekly report, it reported that the financial services industry (measured by volume) led the activity chart with 692.325 million shares valued at N6.22 billion traded in 10,615 deals and contributed 73.58 per cent and 54.12per cent to the total equity turnover volume and value respectively.
While the conglomerate’s industry followed with 89.872 million shares worth N246.06 million in 764 deals, the consumer goods industry traded a turnover of 54.227 million shares worth N1.23 billion in 2,923 deals.
“Trading in the top three equities namely United Bank for Africa Plc, Sterling Bank Plc and Transnational Corporation Plc (measured by volume)accounted for 304.837 million shares worth N1.285 billion in 2,103 deals, contributing 32.39 per cent and 11.18 per cent to the total equity turnover volume and value respectively,” NGX stated.
In the new week, analysts at Cowry Asset Management said, “We expect to see mixed reactions to the daily change of the local bourse.”
With the expectations of second-quarter financial results coming in over the next few weeks, the analysts added, “We continue to maintain positive sentiments in the market although profit-taking will likely set in as prices rise. Investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook to avoid falling into the bear trap.”