As the capital market ended November on a negative note, the share price of Unity Bank, EcoBank and Skye bank led worst performing stocks
With the decline in banks’ share prices, Nigerian Stock Exchange Banking Index dropped by 9.51 per cent from 308.72 basis points it opened in November to close at 279.36 basis points.
Breakdown by InsideBusiness shows that Unity Bank share price plunge in the month under review by N0.39 or 28.68 per cent to close at N 0.97 from N 1.36 it opened.
EcoBank came second with a decline of 17.47 per cent from N18.6 to N15.35 followed by Skye Bank Plc that moved from N1.99 to N1.68, representing a decline of N0.31 or 14.48 per cent.
Guaranty Trust Bank and Stanbic IBTC Holdings Plc dropped by 13.38 per cent and 12.74 per cent to close at N20.00 and N16.50 respectively.
Other top losers in the chart include Diamond Bank Plc that lost N0.33 or 12.60 per cent while Zenith Bank Plc witness a decline of N2.00 or 11.3 per cent to close November at N15.60.
Most of the decline in share price can be attributed to weak corporate earnings most especially in Diamond Bank, Unity Bank and Stanbic IBTC Holdings nine months unaudited results that ended September 2015.
Diamond Bank on the heels of increased loan impairment charges recorded a 21.7 per cent decline in profit before tax from N23.7 billion in September 2014 to N18.6 in September 2015.
Diamond Bank profit after tax also dropped by 20.9 per cent to N15.9 billion from N20.18 billion in the corresponding year.
The Chief Executive Officer, Diamond Bank, Uzoma Dozie in a statement said, “Our business has remained resilient despite challenges in the operating environment, and as the fastest growing retail bank in Nigeria.
He expressed optimism about the growth and value to shareholders and restated his commitment to overseeing full implementation of the Bank’s digital led retail strategy.
With 521 per cent growth in Credit impairment charges from N2 billion in September 2014 to N12.49 billion in September 2015 , Stanbic IBTC Holdings had the worst performance in the period under review as its profit after tax dropped by 46.3 per cent from N25.26 billion to N13.56 billion.
Also, Unity Bank witnessed 15.8 per cent decline in profit after tax from N11 billion in September 2014 to N9.3 billion in September 2015.
Furthermore findings by InsideBusiness revealed that, Sterling Bank Plc share price dropped by N0.06 or 2.93 per cent from N2.05 to N1.99.
Fidelity Bank Plc despite impressive nine 9 months corporate earnings recoded N0.02 or 1.41 per cent decline in share price to N1.4 , while Wema Bank Plc share price dip by N0.01 or 1.03 per cent to close November at N0.96.
The Chief Executive,NSE, Oscar Onyema, recently said despite the low level of investor confidence, occasioned by market volatility and downturn in the All-Share index in the capital market, there still exists enormous investment opportunities for Nigerians to take advantage of.
He argued that the capital market is currently a reflection the state of the economy.
He said: “It would be surprising if the market is going up when the economy is having shocks. It’s important for investors to also understand that there’s been significant sell-off between last year and this year and it could present opportunity and again, it’s important to do the analysis and understand where those opportunities are and not only in the equities but across the various asset classes.”
He said: “So if you look at large cap, small cap and mid-cap securities, our small cap securities has done pretty well.. Yes, the whole market is down but that is because of the weight of the large cap, so it’s important to dig deeper and understand the dynamics of the market and if you don’t time, engage your professionals to work you through all of that.”
He said the quantum of trading was much lower than the previous year due to oil price shocks.
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