ACCESS Holdings, Guaranty Trust Holding Company (GTCO), and Fidelity Bank have kick-started the banking sector recapitalisation, offering shares worth N878.7 billion to existing and new investors.
The banks are currently in the Nigerian stock market to raise capital to meet the Central Bank of Nigeria’s (CBN) minimum capital base of N500 billion each as the three banks operate with international authorisation.
The Central Bank of Nigeria (CBN) had in March this year issued a guideline for the mandatory recapitalisation of banks to reposition the country’s banking system ahead of the federal government’s dream of achieving a $1 trillion economy by 2023.
Kick-starting the move, Fidelity Bank on Tuesday, June 20, opened its application for N127.2 billion combined rights issue and public offer. The offers are expected to close on Monday, July 29.
According to Fidelity Bank, the capital raising comprises a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share, and 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share.
The rights issue is pre-allotted based on one new ordinary share for every 10 existing ordinary shares held as of the close of business on Friday, January 5 this year.
On Monday, July 8, Access Holdings commenced its N351 billion capital raising through a rights issue, scheduled to close on Wednesday, August 14, 2024.
The Access Holding rights issue offer of 17,772,612,811 ordinary shares of N0.50 each at N19.75 per share is based on one new ordinary share for every two existing ordinary shares held as of Friday, 7 June this year.
For GTCO, it is offering a public offer of N400.5 billion. On Monday, 15 July, the bank opened its offer for a subscription of 9,000,000,000 ordinary shares of 50 kobo each at N44.50 per ordinary share.
The public offer allotted 50 per cent, corresponding to 4.5 billion offer shares a piece to both the institutional investors and retail investors, stating that the issuer, however, reserves the right to alter the allocation based on the demand to be expressed by each class of investor.
The ICIR reports that while Fidelity Bank gives old and existing shareholders an opportunity to own their shares on NGX, Access Holdings opted for a rights issue, and GTCO for a public offer.
A look at the banking sector index since Fidelity Bank kick-started the capital-raising at the Nigerian Exchange Limited (NGX) shows that bank stocks have appreciated by 4.68 per cent from 831.3 basis points as of June 20 to 870.22 basis points as of July 17.
The share of Fidelity Bank had gained 0.35k, rising from N10.40 as of June 20 to N10.75 per share as of July 17.
On the contrary, Access Holdings, which opened its rights issue on July 8, had lost 0.25k declining from N19.60 to N19.35 as of July 17, and GTCO likewise lost 0.1k as its share dropped from N45.60 as of July 15 to N45.50 as of July 17.
Meanwhile, on Wednesday, July 17, the Nigerian stock market declined by 0.04 per cent as the All-Share Index dropped to 100,032.32 points and the market capitalisation to N56.65 trillion, despite positive trading activity levels by investors.
This, however, did not reflect in the market, as 28 companies’ shares gained, surpassing 15 companies’ shares that declined.
Trading activity was positive as total deals, volume, and value of trading stocks rose.
Performance across the sectors was also in the green as the banking, industrial goods, and oil and gas indices recorded gains. On the contrary, the insurance and consumer goods indices recorded a decline.
The top five gainers were United Capital, Africa Prudential, Cutix, Oando, and Julius Berger shares emerged as the top five gainers for the day.
On the downside, RT Briscoe, FTN Cocoa Processors, Tantalizers, Neimeth International Pharmaceuticals, and Consolidated Hallmark Insurance topped the losers’ chart.
While Jaiz Bank was the most traded stock with a volume of 528.49 million units that exchanged hands in 240 trades, Zenith Bank led in traded value, amounting to N3.11 billion.