Market Opens Negatively as Access Bank, Nestle, Oando, Others Decline

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Goddy Egene

The Nigerian equities market resumed trading with a decline as investors ignored the interim dividends declared by Access Bank Plc and Stanbic IBTC Holdings Plc and increased the sell off the shares.

As a result, the Nigerian Stock Exchange (NSE) All-Share Index fell by 0.21 per cent, to close at N27, 089.84, while market capitalisation shed N27.6 billion to close at N13.2 trillion. Having dipped by 1.38 per cent last week, some level of bargain hunting was expected this week. However, the market was about to close positively towards the end of trading before late sell-off in shares of Nestle Nigeria Plc, Access Bank Plc, Stanbic IBTC Holdings Plc and Oando Plc weighed down the index.

In all, 14 stocks lost value, while 15 added value. Livestock Feeds Plc led the price losers with 7.1 per cent, trailed by LASACO Assurance Plc with 6.9 per cent. NPF Microfinance Bank Plc went down by 6.4 per cent, while Nestle Nigeria Plc shed 5.7 per cent.

But the depreciation suffered by Stanbic IBTC Holdings Plc (2.7 per cent) and Access Bank Plc (1.4 per cent) came as a surprise for many analysts given the fact that both banks recently announced interim dividends. Stanbic IBTC recommended an interim dividend of 100 kobo while Access Bank Plc recommended 25 kobo per share.

It was expected that the investors could continue to demand for the shares of Access Bank in particular given its impressive results for the half year ended June 30, 2019.

Access Bank Plc last week gross earnings of N324.4 billion, indicating a growth of 28 per cent from N253.0 billion in the corresponding period of 2018.

The bank posted a jump of 62 per cent in a profit before tax (PBT) to N74.1 billion in 2019, compared with N45.8 billion recorded during the same period in 2018, while profit after tax rose 59 per cent to N63.01 billion, up from N39.6 billion in 2018.

Total assets went up by 31 per cent to N6.48 trillion as at June 2019 in comparison to N4.95 trillion in December 2018, while Capital Adequacy Ratio (CAR) remained solid at 20.8 per cent, well above the regulatory minimum.

Commenting on the performance, Group Managing Director/CEO, Access Bank Plc, Herbert Wigwe said: “Access Bank’s performance in H1 of the year reflects a sustainable business model coupled with effective execution as we make solid gains towards the achievement of our strategic goals.”

According to him, their focus on retail gained momentum during the period, as continued investments in their channels platform resulted in a 29 per cent contribution to gross fee and commission income, up 92 per cent from the corresponding period in 2018.