Zenith Bank Plc, along Ecobank Transactional Incorporated Plc, and Guaranty Trust Bank Plc (GTBank) lead 13 others to emerge as best performing stocks in the banking sector in July.
At the close of trading on Monday, July 31, the stock price of Zenith Bank appreciated by 17.8 per cent, while ETI added 18.1 per cent or ₦2.25 per share to close at ₦16.50 from opening figure of ₦13.97.
Similarly, the price of GTBank appreciated by 12.1 per cent in the same month.
Price appreciation in banks leveraged Nigerian Stock Exchange Banking Index growth of about per cent from 397 basis points to 445.33 basis points in July, an increase of 12.2 per cent or 48.33 basis points.
It implies that the NSE banking Index has appreciated by 63.3 per cent and 171.01 basis points in seven months from 274.32 basis points it opened for trading in 2017.
Data collected by LEADERSHIP revealed that Zenith Bank’s stock opened the month under review at ₦20.89 and closed at ₦24.61 while GTBank, the third highest price gainer in the banking sector closed July at ₦39.05 from ₦34.82 it opened for trading.
For the month under review, GTBank recorded the highest market capitalisation of about ₦1.15 trillion, behind Dangote Cement Plc that has ₦3.8 trillion in market last month.
Zenith Bank on the other hand, has a market capitalisation of ₦772.8 billion while ETI has ₦302.8 billion in market capitalisation in July 2017. .
Ironically, investors on the Nigerian Stock Exchange (NSE) continued to buy stock prices of these financial institutions over speculation of proposed interim dividend, Zenith Bank and GTBank specifically.
The above banks are yet to announce their earnings to the Exchange, LEADERSHIP can exclusively report.
A stockbroker who spoke with LEADERSHIP that does want his name in print said, “Zenith Bank and GTBank have a model that is working and delivering returns shareholders.
“If you look at their books you will realize that they have delivered value over the years, and with them, it’s a steady growth, that’s what the investors are looking at,” he noted.
Other financial institution with stock price appreciation include Skye bank Plc, United Bank For Africa Plc, Access Bank Plc and Stanbic IBTC Holdings Plc.
The stock price of Skye Bank added 13 per cent or ₦0.08 to close at ₦0.68 while United bank for Africa rose by 10.7 per cent or ₦0.94 to close in July at ₦9.70 from ₦8.76 it opened.
Access Bank stock’s price added 8.1per cent or ₦0.75 to close at ₦10.05 per share.
Furthermore, the stock price of Stanbic IBTC Holdings increased by 8.8 per cent or ₦2.90 to close July at ₦35.90.
Despite impressive profitability in the half year ended June 2017, the stock price of Diamond Bank inched up by four per cent or ₦0.05 to close at ₦1.29.
The interim report and accounts of Diamond Bank showed significant growth in all key financial parameters as profit before tax surged year-on-year by 2.8 per cent to ₦10.8 billion, this followed the leapfrogging of gross income over total expenses during the period under review.
Commenting on the Bank’s, Chief Executive Officer, Diamond Bank, Uzoma Dozie stated that despite the economic headwind, the Bank would remain resilient and sustain the positive growth throughout the two remaining business quarters.
Further investigation by LEADERSHIP revealed that Unity Bank Plc,Union Bank of Nigeria recorded the highest decline in July, followed by Fidelity Bank Plc.
The stock of Unity Bank fells by 8.9 per cent or ₦0.06 to close at ₦0.67 from ₦0.61 in July.
The stock price of Union Bank of Nigeria shed 14.4 per cent to ₦5.24 from ₦6.12 it opened in July while Fidelity Bank dropped by 4.6 per cent to close July at ₦1.25.
Wema bank stock price also depreciated by 3.6 per cent to ₦0.53, followed by Sterling Bank that recorded a drop of 1.9 per cent in stock price while stock price of Jaiz bank Plc moved from ₦0.70 to ₦0.69, a decline of 1.4 per cent or ₦0.01.
However, the stock price of First City Monument bank Holdings Plc remained closed flat at ₦1.25
The capital market continued with its impressive performance recently with a gradual recovery of some of the losses recorded in the first few months of the year.
Experts in the stock market say the development was as a result of the Central Bank of Nigeria (CBN) Investors & Foreign Investors Window and Pension Funds Administrations (PFAs) increased stake in the equities market which have continued to play a critical role in the equities market performance lately.