Monday, 8 Nov 2010

Expectations of better performances and enhanced returns to shareholders, following the approval of the operations of the Asset Management Corporation of Nigeria, have impacted positively on the share prices of the banks rescued by the Central Bank of Nigeria last year.

For instance, the share price of Oceanic Bank Interntional Plc, according to statistics compiled by researchers at Meristem Securities, has so far recorded a 170.37 per cent growth this quarter, monthly growth of 26.41 per cent and a year-to-date growth of 72.78 per cent.

Union Bank Plc recorded a quarterly growth of 30.30 per cent and a monthly growth of 15.65 per cent.

In the same vein, Intercontinental Bank Plc recorded 104.48 per cent quarterly increase in share price, a 25.76 per cent rise in the last one month, and a year-to-date increase of 54.66 per cent. Unity Bank Plc also recorded a 91.43 per cent price gain in the last one quarter; 22.94 per cent gain in the last one month and a 59.52 per cent year-to-date gain. Wema Bank recorded a 75per cent quarterly gain; 58.06 per cent year-to-date gain and 25.64 per cent monthly gain, among others.

Analysts said the share prices responded to the approval of the AMCON board, plans by the CBN to bring new investors into the banks and the corporate scorecards of the banks, which reflected a solid debt recovery momentum.

The Senate had, on Wednesday, confirmed Messrs Aliyu Belgore and Mustafa Chike Obi as Chairman and Managing Director of AMCON, respectively.

AMCON, according to the CBN, was formed to buy the toxic assets of banks, especially the rescued ones and enhance liquidity in the banking industry.

The corporation, according to some analysts, will boost liquidity in the economy, since banks will be willing to lend to the real sector, once their toxic assets are bought off their books.

A shareholder group leader, Chief Aderemi Oyepeju, who is the Chairman, Ibadan Zone Shareholders Association, however, noted that investors should be careful about the stocks in question, to avoid a situation where their share prices would be manipulated to attract buyers, as was the case during the boom in the stock market.

 

Source: Punch