Price depreciation suffered by Nigerian Breweries Plc, United Bank for Africa Plc, Ecobank Transnational Incorporated and Access Bank Plc among others made the stock market to close negatively yesterday.
The Nigerian Stock Exchange (NSE) All-Share Index, which had appreciated 0.39 per cent on Tuesday, shed 0.25 per cent to close at 30,642.35 yesterday.
Although 20 stocks shed value compared with 24 gainers, the market closed bearish due to the losses by heavy weights. Conoil Plc and AXA Mansard Insurance Plc led the price losers’ chart that also had stocks such as Nigerian Breweries Plc, ETI, FBN Holdings and UBA. The petroleum products marketing and insurance firms went down by 10 per cent apiece. Chams Plc lost 9.0 per cent , while A.G Leventis Nigeria Plc shed 7.4 per cent.
Dangote Sugar Refinery Plc and Regency Alliance Insurance Plc depreciated by 5.3 per cent and 4.7 per cent in that order. Continuing profit taking sent Diamond Bank Plc to close 4.2 per cent lower. The stock had a bullish run last week as its price jumped 56.9 per cent due to renewed demand by investors who reacted positively to national banking licence issued to the bank by the Central Bank of Nigeria (CBN).
Prior to last week, Diamond Bank shares suffered serious value erosion following speculations of its likely acquisition by another bank. However, the speculations were denied by the financial institution, a development that was followed by the approval its application by CBN to convert from an international bank to a national bank.
According to the bank, the move follows its decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017 and Diamond Bank UK, the sale of which is currently in its final stages.
“The change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10 per cent as against 15 per cent required for international banks. This creates room for the bank to deploy more capital for stronger growth in the quarters ahead through additional investment in technology platforms, customer acquisition and expansion of loans to the critical sectors of the economy.”
And in apparent positive reaction to these developments, some investors increased their demand for the shares of Diamond Bank Plc, which bolstered the stock by 56.9 per cent. However, profit taking has set in since the beginning of the week, hence the negative close yesterday.