Banking Stocks Rise Further on Sustained Demand by Investors

Banking Stocks Rise Further on Sustained Demand by Investors

Banking Stocks Rise Further on Sustained Demand by Investors

High demand for banking stocks at the stock market lifted their prices further yesterday, which was the second trading day for the new year. Although the stock market closed on negative note with the Nigerian Stock Exchange (NSE) All-Share Index falling 0.20 per cent, the NSE Banking Index appreciated by 1.2 per cent.

Out of the 37 price gainers recorded yesterday, 15 where banking stocks. Diamond Bank Plc led the price overall price gainers’ chart with 9.5 per cent, trailed by FCMB Group Plc with 9.4 per cent. Fidelity Bank Plc and Wema Bank Plc chalked up 8.5 per cent and 8.0 per cent respectively.

There were also: FBN Holdings Plc (4.6 per cent); Sterling Bank Plc (4.4 per cent); Unity Bank Plc (3.6 per cent); United Bank for Africa Plc (3.4 per cent) among others.

The banking sector recorded the highest gain in 2017 with the NSE Banking Index rising by 73.3 per cent.

Commenting on the last year’s performance of the sector, analysts at Meristem Securities Limited said active investor participation was seen as investors reacted to the inflow of favourable news within the space in a bid to position adequately for short-term and long-term profits.

“The sector’s performance was largely anchored by investors’ reaction towards the financial performance and corporate benefits of sector companies. We also note the impact of portfolio rebalancing activities and the year-end rally on the sector, as this drove most counters to their year-highs. In the coming year, we envisage increased participation within the space as we note that the sector is highly suited for speculative trading as well as long-term investments,” the analysts said.

Meanwhile, a further analysis of the trading yesterday showed that the decline in the index was majorly caused by the depreciation in share price of Dangote Cement Plc. The stock fell by 3.0 per cent to close lower at N223 per share. However, Double 11 Plc led the 11 price losers with 9.2 per cent decline. Neimeth International Pharmaceuticals Plc trailed with 8.0 per cent, while Cutix Plc and Cadbury Nigeria Plc shed 4.9 per cent and 4.2 per cent respectively.

Commenting on the market performance, FSDH Research said the market closed on a negative note largely attributable to the decline recorded in the share price of Dangote Cement

“ However, there was a sustained demand for banking stocks, most of which traded at the higher limit and closed on bid. We expect increased activity and bargain hunting in coming trading sessions driven by positioning for 2017 corporate earnings,” they said.

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