Pressure on banking stocks to continue —Analysts

20 December 2015, Lagos – The pressure on the banking sector last week is likely to continue this week, analysts fear.

Godwin Emefieli, CBN Governor.

Godwin Emefiele, CBN governor

The weak stance of the market and the general outlook of the sector were likely reasons for the fear, according to operators.

The banking sector is said to have marked the fourth consecutive week of decline, according to Meristem Securities Limited, which it stressed pared by 0.76 per cent to bring the year to date return to -21.76 per cent.

There were five gainers in the week, against 10 decliners, pegging the sector’s breadth at an unfavourable level.

Zenith Bank led the gainers’ chart, after appreciating by 4.22 per cent week-on-week. The ticker was closely followed by Access Bank (4.21 per cent), UBA (3.77 per cent), ETI (2.74 per cent), and Fidelity Bank (0.72 per cent). On the other side, Unity Bank, First Bank of Nigeria, Wema Bank, First City Monument Bank, and Stanbic IBTC Bank populated the decliners’ list, after paring in value by 27.45 per cent, 10.09 per cent, 6.25 per cent, 5.10 per cent, and 3.49 per cent accordingly.

Meristem stated, “Much in line with our assertions, the banking sector remained under pressure this week, and we do not foresee a respite in the coming week. In the current period, given weak market and sector sentiments, we do not envisage a scenario where significant price returns may be recorded over the short-term.

“On the back of this, we advise investors to take advantage of depressed prices to re-align their portfolios towards top-quality (blue-chip) equities in the sector.

For equities in the past week, the Nigerian Stock Exchange said a turnover of 1.218 billion shares worth N14.685bn in 13,495deals were traded by investors on the floor of the Exchange in contrast to a total of 1.041 billion shares valued at N13.007bn that exchanged hands last week in 13,407deals.

The financial services industry (measured by volume) was said to have lead the activity chart with 1.068 billion shares valued at N9.888bn traded in 7,803deals; thus contributing 87.7 per cent and 67.33 per cent to the total equity turnover volume and value respectively.

The consumer goods industry followed with 48.455 million shares worth N2.450bn in 2,560 deals.

The third place was occupied by the conglomerates industry with a turnover of 45.914 million shares worth N364.525m in 622 deals.

Trading in the top three equities namely – Guaranty Trust Bank Plc, FBN Holdings Plc and Union Homes Savings And Loans Plc (measured by volume) accounted for 610.558 million shares worth N7.340bn in 3,262 deals, contributing 50.13 per cent and 49.98 per cent to the total equity turnover volume and value respectively.


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