By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The shares of Africa’s top tier lender Access Bank Plc has continued to soar high on the floor of the Nigerian Stock Exchange (NSE) amidst its ongoing rights issue, InvestAdvocate reports.
The shares of the bank in the month of February performed creditably well as it was prominent amongst the top three (3) stocks traded on the Nigerian bourse.
A review of this shows that market breadth as at February 06, Access Bank emerged one of the top three (3) equities traded on the NSE alongside FBN Holdings Plc and Zenith International Bank Plc.
Measured by volume all three (3) financial institutions accounted for 740.244 million shares worth N6.022 billion in 6,296 deals, contributing 36.51 percent and 29.20 percent to the total equity turnover volume and value respectively. Access Bank in terms of volume traded 292.89 million shares in the review period.
As at February 13, the bank rated B by Fitch and A+ Agusto & Co was also amongst the top three (3) equities traded on the floor of the NSE alongside FBN Holdings Plc and Guaranty Trust Bank Plc. Measured by volume, the trio accounted for 793.727 million shares worth N7.789 billion in 5,168 deals, contributing 40.70 percent and 27.98 percent to the total equity turnover volume and value respectively. Volume increase of Access Bank was 275.63 million shares.
The third week February 20, also saw volume increase of Access Bank to (295 million), UBA (241.69 million) and Guaranty Trust Bank (212.35 million) collectively accounted for 35.96 percent of market volume traded in the review period
According to the NSE’s weekly report for the period, Access Bank, UBA and GTBank measured by volume accounted for 749.043 million shares worth N6.637 billion in 4,558 deals, contributing 35.96 percent and 29.54 percent to the total equity turnover volume and value respectively.
At the end of the last week of February on the Nigerian bourse, Access Bank again emerged one of the top three (3) stocks alongside two (2) other prominent Nigerian financial institutions namely, FBN Holdings and UBA, measured by volume accounted for 551.516 million shares worth N3.414 billion in 5,571 deals, contributing 32.93 percent and 16.01 percent to the total equity turnover volume and value respectively. Access volume in the review period increased (158.69 million).
The Nigeria’s international lender came fourth among the top 10 price gainers on the Nigerian equities market with a gain of 0.80 kobo climbing up 14.29 percent to end the last week of February.
Earlier in October last year, Access Bank announced in a filing with the NSE its profit for the nine months period ended September 30, 2014 climbed up 28.1 percent to N35.346 billion 2014 from N27.597 billion recorded in the same period of 2013.
Similarly, pretax profit also increased 20.1 percent to N42.156 billion from N35.087 billion reported in the corresponding period of 2013.
Gross earnings grew from N155.026 billion in the nine months period of 2013 to N181.798 billion in the review period of 2014; indicating a growth of 17.3 percent.
The bank on January 26 opened its N52.6 billion ($275.10 million) rights issue at N6.90 per share and offered to sell 7.63 billion ordinary shares of 50 kobo each at a ratio of one new share for every three held by existing shareholders.
As reported by the media, despite the intermittent gains and losses being recorded in the banking stocks on the Nigerian bourse, investors have continued to take the lenders rights issue on the back of its performance in the nine months ended September 30, 2014.
Reports further quoted Analysts at Meristem Securities Limited, an investment firm, that incorporating the expected dilution of earnings from the bank’s rights issue, “we arrived at a target price of N8.74 for 2015, which also reflects the tighter operating environment expected,” the Meristem Analysts affirmed.
While Research analysts at Proshare said, “Tier 1 capital ratio at 16 per cent is testing regulatory limits as Access Bank is classified as a systemically important financial institution. This would bring its capital adequate ratio to 22 per cent, supporting 20 to 25 per cent year-on-year loan growth over the next three years.
“Beaming the searchlight on our coverage suggests further capital raising possibly along Tier I lines. This follows a raft of Tier II capital raisings which saw some of our coverage banks (Zenith, FBNH, Access, Ecobank and Diamond) collectively raise $1.8bn thus far in 2014,” the Proshare Analysts added.
To interest investors further, Herbert Wigwe, group managing director/chief executive officer (GMDCEO) of the bank on February 05 during the bank’s “Facts behind the Offer” presentation at the NSE said Access Bank will pay dividend in 2015.
“We will pay dividend to investors of the company this year,” he said.
The CEO of Access Bank says as an institution, the bank has always kept to its promise made to investors.
“As an institution, we have kept every promise we have made to our investors, as we started approaching the offer, the local investors appeared to be interested in it, most of them are standing up for us and so what I can assure you is as big as this number is, they have the wherewithal towards the rights issue,” Wigwe added.
He assured investors and other stakeholders that the bank will record a full subscription in the ongoing fund raiser. “What I can assure you is that we will go home with full subscription,” he affirmed.
The Africa’s top tier lender said the capital raising falls in line with its five-year corporate strategy plan to be one of the top three banks in the country and the “world’s most respected African bank”.
“This will be anchored on four (4) critical pillars – capital, human capital, governance and risk management. It will also enable the bank to be more competitive and meet the funding needs of its blue chip customers that meet its credit risk criteria,” the bank added.
The offer is expected to close on March 04, 2015; lead issuing house is Chapel Hill, while joint issuing houses include Marina Securities, Stanbic IBTC, Renaissance Capital, Vetiva Capital, Greenwich Trust, Futureview Financial Services and WSTC Financial Services.
