Bank Stocks Depreciate on Panic Over CBN’s Dividend Rule

Panic over the Central Bank of Nigeria (CBN’s) directive on dividend payment, among other factors impacted negatively on the stock market, as most banking stocks constituted the losers’ at the end of yesterday’s transactions.

Although the All-Share Index rose marginally by 8.59 points, while the market capitalisation increased by N3billion, but five bank stocks from both the tier one and two sub-sects recorded price depreciation.

The price depreciation recorded by banks’ stocks may, however, be attributed to some hasty sell-offs by investors especially in the tier two that are most affected by the dividend payment restrictions.

Specifically, Diamond Bank lost 0.12 kobo to close at N2.43 per share, while Skye Bank depreciated by 0.03 kobo to close at N1.00 per share. Sterling Bank shed 0.04 kobo to close at N1.88 per share. Fidelity Bank dropped 0.02 kobo to close at N2.98 per share.CBN had released an update on an earlier circular issued October 8, 2014, on internal capital generation and dividend pay-out ratio of Nigerian banks.

The major focus of the circular is on the capital reserves of the banks as well as the proportion of non-performing loans (NPLs) in a bid to forestall any threats to customer deposits in the system.

Further review of yesterday’s transactions showed that International Breweries topped the gainers’ table, growing by 2.85 kobo to close at N59.85 per share.

PZ Industries followed with a gain of 1.15 kobo to close at N24.15 per share.

National Salt Company of Nigeria appreciated 1.05 kobo to close at N21.60 per share. Guaranty Trust Bank advanced by 75 kobo to close at N49.35 per share. Redstar increased by 30 kobo to close at N6.30 per share.

Consequently, the All-Share Index rose marginally by 8.59 points or 0.02 per cent to close at 42,579.48 compared with 42,570.89 achieved on Friday.

Similarly, the market capitalisation, which opened at N15.277trillion rose by N3billion or 0.02 per cent to close at N15.280trillion.

Cement Company of Northern Nigeria was the most active stock, trading 134.89 million shares worth N2.25billion.

Transcorp followed with an account of 34.15 million shares valued at N71.04million, while FBN Holdings traded 21.78 million shares worth N250.07million.

Access Bank sold 20.58 million shares valued at N 270.03million, while Fidelity Bank exchanged 20.49 million shares worth N61.30million.

In all, the volume of shares transacted closed higher as investors bought and sold 384.26 million shares valued at N5.47billion achieved in 4,774 deals. This was in contrast with a turnover of 308.43 million shares worth N6.40billion exchanged in 4,356 deals on Friday.

By Helen Oji

The Guardian Newspaper February 27th, 2018

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