Banking stocks sank by 3.36 per cent week-to-date at the close of trading on the floor of the Nigerian Stock Exchange on Tuesday as the Exchange’s market capitalisation dropped by N162bn.
Bearish sentiments dominated the equities market for the third consecutive day, as the NSE All-Share Index declined by 1.10 per cent, to settle the year-to-date return at 20.60 per cent.
However, volume traded and market turnover advanced by 27 per cent and 12.19 per cent, respectively. There were only 10 gainers and 31 losers.
The banking shares were said to have fallen after regulators said they had intervened to save the country’s fourth largest telecoms firm, Etisalat Nigeria, from collapse as talks with local lenders to renegotiate a $1.2bn loan failed.
Etisalat Nigeria had been negotiating with its lenders for more than five months to restructure a $1.2bn loan it took four years ago, after missing several repayments.
The news sent the banking index lower, which caused the main index to fall by 1.1 per cent as investors sold shares on worries that lenders might be forced to take a haircut on Etisalat’s loan.
Half-year earnings season has started for companies listed on the Lagos bourse and lenders, under pressure to avoid loan-loss provisions, had been pushing to finalise restructuring talks before interim audits in June.
For the banking segment of the market, United Bank for Africa Plc topped the decliners with a fall of 5.75 per cent. Ecobank Transnational Incorporated shed 4.94 per cent, Diamond Bank Plc and FCMB Group Plc both lost 4.72 per cent each.
Overall, Neimeth International Pharmaceuticals Plc led the laggards to close at N0.75 after losing 8.54 per cent. This was followed by UBA.
Source:© Copyright Punch Online
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