Profit Taking Hits Banking Stocks On Nigerian Bourse

Profit Taking Hits Banking Stocks On Nigerian Bourse
Trading on the floor of The Nigerian Stock Exchange Market

The banking sector suffered profit, making the Nigerian Stock Exchange (NSE) Banking Index to close as the sole loser. While other sectoral indices went up, the NSE Banking Index declined due to depreciation in the prices of Stanbic IBTC Holdings Plc,  Ecobank Transnational Incorporated  and Guaranty Trust Bank Plc. The stocks went down by 5.0 per cent, 3.2 per cent and 1.2 per cent. However, United Bank for Africa Plc was marked down by 8.7 per cent.

While the NSE Banking Index went down, the NSE Consumer Goods  Index appreciated by 1.3 per cent. It was boosted by gains recorded by Nestle Nigeria Plc (2.2 per cent); Guinness Nigeria Plc (5.0 per cent), Nigerian Breweries Plc (0.7 per cent) and PZ Cussons Nigeria Plc (4.0 per cent).

According to analysts, the positive sentiment on Guinness Nigeria Plc  is due to the decision of the parent firm, Diageo to increase its stake from 54.3 per cent to 70 per cent.

Guinness Nigeria Plc, had notified the NSE of the intention of the parent firm through its wholly owned subsidiary, Guinness Overseas Limited.

According to the Company Secretary of Guinness Nigeria, Sesan Sobowale, the company will maintain its listing on the NSE after the process.

“If Diageo decides to proceed with the proposed transaction, it is intended that, subject to regulatory approval, Guinness Overseas will launch a partial tender offer at a price not higher than N175.00 per share in cash, giving all shareholders the opportunity to elect to sell some or all of their shares in the company.

“At the maximum offer price, the proposed offer would represent a premium of 36 per cent to the 30-day volume weighted average share price and 40 per cent to the company’s closing share price on September 8, 2018. Guinness Overseas may also seek to acquire shares in the market at a price not higher than the offer price of N175 per share. Diageo would encourage those shareholders that wish to divest their holdings in Guinness Nigeria to make contact with Stanbic IBTC Stockbrokers Limited,” the company said.

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