By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian equities climbed up on Friday following the acquisition of stakes into Ecobank Transnational Incorporated and Union Bank of Nigeria Plc (UBN) by foreign investors aiding the reversal of earlier losses recorded in the week.
On Thursday, Qatar National Bank (QNB) bought a 12.5 percent stake in pan African lender Ecobank Transnational Incorporated (ETI) for about $200 million.
QNB acquired 1,767,612,630 ordinary shares and 732,277,056 preference shares respectively in ETI at N20.01 per share.
The 12.5 percent stake QNB acquired in ETI is from the Asset Management Corporation of Nigeria (AMCON). Nigeria’s Asset Management Corporation acquired the stake after the pan African lender merged with liquidated Oceanic Bank International Plc which AMCON bailed out before the merger and acquisition.
Also, on Friday, Atlas Omara, the African investment vehicle of former Barclays CEO Bob Diamond, increased its stake in Union Bank of Nigeria Plc (UBN) to 29.9 percent with a $270 million investment, boosting sentiment on the Nigerian bourse.
“We have seen half a billion dollars into Nigerian banks from both deals in 24 hours, that adds to positive sentiments… even as we approach elections next year,’’ a Reuters report said.
At the end of transactions on the Nigerian bourse on Friday Union Bank and ETI shares climbed up 5.00 percent respectively helping life the broader index to -.35 percent in the review period.
According to Reuters, uncertainty over forthcoming elections and growing security risks hit demand for equities this year, dampening a stock market rally as local fund managers’ poured cash into government bonds.
‘’With the main index down almost 1 percent this year, after it rallied 47 percent last year, to emerge as one of the best performing African equity markets in 2013,’’ the report said.
The report affirmed that election risks has not deterred established frontier market investors attracted to Nigeria by the size of its consumer base and valuations, analysts say.
The index of Nigeria’s top ten banks increased 1.55 percent on Friday, outperforming broader consumer stocks, which shed 0.54 percent.
