BusinessScramble Abates as FBNH Stocks Remain Investors’ Toast

Scramble Abates as FBNH Stocks Remain Investors’ Toast

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November 02, (THEWILL) – The scramble for FBNH shares which upstaged the equity market in recent weeks abated Monday with the price of the Tier-1 financial services Group closing at N10.75 per share on the first trading day of the week/month. Data from the Nigerian Exchange (NGX) shows that the share price recorded a 2.7 percent drop from its previous closing price of N11.05 on Friday, October 29, a loss of N0.3.

The boardroom tussle as to who the Group’s single majority shareholder is triggered a rally in the equity market. The development coincided with the announcement of Mr Nnamdi Okonkwo, immediate past Group Managing Director of Fidelity Bank Plc, as the successor to Mr U.K. Eke, who retires as Group Managing Director of FBNH effective January 1, 2022.

The Board of FBN Holdings Plc also approved the appointment of Mrs Tope Orhionsefe Omage as a Non-Executive Director of First Bank of Nigeria Limited by the Board of FirstBank, subject to the approval of the CBN.

It has since been established that Mr Tunde Hassan-Odukale, who through direct and indirect shares, acquired 1.5 billion First Bank shares in 2021 alone built a majority shareholding in FBN Holdings Plc to gain controlling stakes in the firm.

Put together, all the shares linked to Hassan-Odukale bring his stake equivalent to 5.36 percent of First Bank’s total outstanding shares and make him the single largest shareholder. This is ahead of billionaire investor, Femi Otedola, who owns about 1.8 billion shares or 5.07 percent.

FBN shares began the year with a share price of N7.15 and has since gained 50.4 percent on that price valuation, ranking it 25th on the NGX in terms of year-to-date performance. Analysts say that shareholders can be optimistic about FBNH knowing the stock has accrued 34 percent over the past four-week period alone—sixth best on NGX.

FBN Holdings is the topmost traded stock on the Nigerian Stock Exchange over the past three months (Aug 3 – Nov 1, 2021). FBNH has traded a total volume of 4.51 billion shares—in 17,444 deals—valued at NGN 46.8 billion over the period, with an average of 71.6 million traded shares per session. A volume high of 603 million was achieved on October 14th, and a low of 1.74 million on September 1st, for the same period.

Reports show that over 1 billion units of FBNH shares were traded in eight days to October 29, amid the tussle between Femi Otedola and Tunde Hassan-Odukale over who emerges the single largest shareholder of Nigeria’s oldest bank.

Mr Paul Uzum, Stockbroker and Head of Securities Trading at Planet Capital described the power puzzle at First Bank as akin to a consuming fire. He said some players under-estimated the interest of other stakeholders who have stronger financial war-chest and that they will lose out.

“Board room maneuver has started. Very soon you get a full disclosure of what others own in FBNH. In all, minority shareholders are the winners. The scramble is not over. But the typical poor Q3 results from FBNH will attract more sellers,” Uzum told THEWILL in a note.

Asked to explain how the minority shareholders are the ultimate winners, Uzum said, “The price of the stock moved from below N7 (at the beginning of the year) to N12-levels; so they (minority shareholders) had opportunity to sell off at prices above the fair value.”

Another Stockbroker and Doyen of the Stockbrokers, Sam Ndata, said the gaining streak will not be for a long time.

Mr Boniface Okezie, National President, Progressive Shareholders Association said the investing public should expect a rise in FBNH shares soon, especially as the year runs to an end when profit hunters grab shares ahead of dividend declaration.

Okezie agrees that the way FBNH Board and Management handle the developing scenario will impact positively or negatively on the bank.

About the Author

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Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILLhttps://thewillnews.com
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

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