By Eromosele Abiodun
Experts in the Nigerian financial service sector have called on investors nursing the idea of making quick gains by speculating on the shares of three rescued banks, Oceanic Bank Plc, Finbank Plc and Union Bank of Nigeria Plc, to exercise caution and consider of post-merger risks in the banks.

Analysts at Cowry Assets Limited in a report made available to THISDAY stated that the confidence level in the banking sector was likely to be boosted if the banks were successful in getting their shareholders to approve their merger agreements with their core investors.

According to the experts, “should the bank shareholders approve the merger agreements as expected, the confidence level in the banking sector is likely to be boosted.

We however advice short-term bargain hunting investors to exercise caution while trading on shares of both the investor and the investee banks until their post-merger risk can be clearly dimensioned.”

The Federal High Court sitting in Lagos last week granted orders to Oceanic Bank Plc, Finbank Plc and Union Bank of Nigeria Plc to convene their shareholders’ Extraordinary General Meetings (EGM), a requisite to the consummation of their Transaction Implementation Agreements (TIA) with their respective core investors: Ecobank Transnational Incorporated, First City Monument Bank

Plc and the African Capital Alliance Consortium respectively, in order to meet the September 30 2011 recapitalisation deadline.

Earlier on, the Federal high court granted Intercontinental Bank Plc an order to convene its EGM for the latter’s takeover by its core investor Access Bank Plc.

The Securities and Exchange Commission (SEC) had recently stated that it would do everything possible to ensure that it cleared the TIAs submitted by the five rescued banks before September 30 deadline, set by the Central Bank of Nigeria (CBN).

Director-General of SEC, Ms. Arunma Oteh, who disclosed this in an interview with newsmen said the commission has deployed enough personnel to ensure that their cases are treated urgently.

The SEC boss, said the commission had assigned more resources to review the applications to ensure approvals are completed ahead of the September 30 deadline.

According to Oteh, “the commission’s team is working all hours to complete the due diligence required for the submissions made by the banks.”

She explained that there were no delays in the processing of applications,  adding that, “SEC as a responsible organisation takes its mandate of investors’ protection with utmost seriousness.”

Oteh said: “The SEC always ensure that our due diligence on any transaction is efficient and comprehensive,” she said.

The director-general noted that the commission recognised the importance of the TIAs to the resolution of the banking sector challenges, adding that SEC would ensure the appropriate thing was done.

Meanwhile, the Cowry Assets experts have also predicted a renewed surge in activities in the capital market as investors push to take advantage of highly discounted stocks.

“This week, we anticipate some bargain hunting activity due to the enhanced opportunities in the equities market although the recent consistent drop in equity prices may keep speculators in check, “the experts said.

The experts also warned the Federal Government of Nigeria (FGN) to take the issue of security serious as a further decline in security in the country could scare away foreign investors and jeopardise the government’s economic plan.

“We therefore repeat our earlier position that unless the Federal Government urgently scale up the capacity of its securities agencies and reverse the worsening security situation, government’s economic and political agenda may be frustrated.”

Source: This Day