Investors count losses as NSE suspends trading on Skye Bank shares

Investors who invested in Skye Bank shares last week may have started counting their losses after Nigerian Stock Exchange (NSE) announced the suspension of bank share following the withdrawal of the bank’s operating license by the Central Bank of Nigeria (CBN).
Some investors waiting to make more gain following the 14.93 percent capital appreciation by the bank’s shares were shocked with the sudden revocation and suspension of trading in the bank’s shares by NSE, starting from Monday.
According to the data from the NSE, with the CBN action, a total of N10.687 billion will be taken away from the NSE market capitalization on Monday morning, being the value of Skye Bank’s shares listed for trading.
Investors traded 2,931,537 units of Skye Bank shares in 47 deals on Friday, when it closed at 77 kobo per share, after gaining 4.05 per cent.
The trading brought total transactions on the bank’s shares for the week to 52,486,693 shares worth N34.239 million in 362 deals, making it the second most traded stock in the banking sub-sector after Guaranty Trust Bank’s 255.645 million units worth N8.313 billion.
The bank recently raised investors’ hope on August 14, 2018, when in a regulatory filing with the NSE, its management promised to submit its backlog of financial statements covering 2016, 2017 and half-year 2018.
Investigation showed that Skye Bank’s problems started after it used short-term funds to buy local bank Mainstreet Bank in 2014, for which it failed to raise fresh cash.
It had been in talks with shareholders and investors to raise capital but suspended plans after weak oil prices hit the capital markets and drove foreign investors away.
The CBN designated it as one of Nigeria’s systemically important banks due to the size of total deposits held after it acquired Mainstreet Bank.
This meant it had to increase its capital ratio to 16 percent, the industry average.
Meanwhile, investors last week traded a turnover of 1.370 billion shares worth N19.503 billion in 16,076 deals against a total of 960.940 million shares valued at N18.329 billion that exchanged hands previous week in 16,896 deals.
The Financial Services Industry led the activity chart with 1.077 billion shares valued at N14.846 billion traded in 9,527deal, contributing 78.62 per cent and 76.12 per cent to the total equity turnover volume and value respectively.
The Services Industry followed with account of 78.255 million shares worth N351.507 million in 474 deals.
The third place was Consumer Goods Industry with a turnover of 53.842 million shares worth N2.691 billion in 2,370 deals.
Trading in the top three equities namely–Guaranty Trust Bank, Access Bank Plc and Zenith Bank Plc accounted for 600.731 million shares worth N13.027 billion in 2,656 deals, representing 43.84 per cent and 66.80 per cent to the total equity turnover volume and value respectively.
The NSE trading result showed that the two market indicators appreciated by 0.66 per cent as market capitalisation of listed gained N77 billion to N11.880 trillion from N11.892 trillion traded the previous week.
The Nigerian Stock Exchange All Share Index also increased by 212.58 basis points to 32540.17 from 32327.59 reported the previous week.
In the same vein all other indices finished higher with the exception of the NSE ASeM, NSE Insurance and NSE Lotus indices that finished lower by 1.51 per cent ,4.90 per cent and 0.26 per cent respectively.NSE Corporate Governance added 22.22 to 1272.63 points, NSE Premium grew by 7.79 to 2,338.51, The NSE Main Board advanced by 13.54 to 1452.15, NSE 30 Index went up by 16.42 to 1462.15 piints, NSE Banking Index rose by 10.45 to 401.35 points, NSE Consumer Goods Index inched up by 7.28 to 762.21 points, NSE Oil and Gas index climbed by 7.34 to 289.80 points, NSE Industrial Goods up by 36.82 to 1549.76 while NSE Pension index surged by 22.13 to 1219.17 points.
A review of the transactions for the week showed that 50 equities appreciated in price 13 recorded the previous week.
The investment further showed that 25 quoted companies depreciated in price, lower than 58 equities of the previous week, while 94 equities remained unchanged lower than 98 equities recorded in the preceding week.
Analysis of the trading activities indicated that Union Diagnostic Clinical Services Plc led gainers table during the week, increasing by 26.67 per cent or N0.08 kobo to close at N0.38 kobo.
First Aluminium Nigeria Plc followed with a gain of 23.33 per cent or N0.07 kobo to close at N0.37 kobo, Forte Oil gained 22.86 per cent or N4.00 to close at N21.50 kobo.
Other companies appreciated in price were Regency Assurance Plc 18.18 per cent UAC of Nigeria 16.26 per cent, Union Bank of Nigeria Plc 16.00 per cent, Skye Bank Plc 14.93 per cent, Lafarge Africa Plc 13.53 per cent, Prestige Assurance Plc 10.42 per cent, Linkage Assurance Plc 8.47 per cent.
On the contrary, Standard Alliance Insurance Plc topped losers chart for the week, dropping by 20.00 per cent or N0.05 kobo to close at N0.20 kobo, Axamansard Insurance Plc trailed with a loss of 18.13 per cent or N0.44kobo to close at N1.86 kobo while Red Star Express Plc fell by 17.43 per cent or N0.95 kobo to close at N4.50 kobo, other firms recorded price depreciation were Cornerstone Insurance16.67 per cent, John Holt Plc 8.62 per cent, Universal Insurance 8.00 per cent, Capital Insurance Plc 8.00 per cent, Consolidated Hallmark Insurance 6.25 per cent , Niger Insurance 6.06 per cent and Diamond Bank Plc 5.43 per cent.
Also traded during the week were a total of 29,750 units of Exchange Traded Products (ETPs) valued at N449,662.50 executed in 2 deals, compared with a total of 41,358 units valued at N1.148 million that was transacted last week in 8 deals.
A total of 9,710 units of Federal Government Bonds valued at N9.587 million were traded this week in 19 deals compared with a total of 43,000 units valued at N42.491 million transacted last week in 36 deals.