Surge in Investors’ Interest Lifts Zenith Market Capitalisation Above N1tn Mark on NGX

Kayode Tokede

Following investors’ renewed interest amid the Central Bank of Nigeria’s (CBN) foreign exchange reform, the share price of Zenith Bank Plc gained 3.22 per cent week-on-week (WoW) to push its market capitalisation across the N1 trillion mark on the Nigerian Exchange Limited (NGX).

The stock price of Zenith Bank closed trading last Friday at N32 per share, from the N31 per share it opened for trading as it gained N31.4 billion in five-day.
The market capitalisation as of the financial instituton as of June 23, 2023, closed at N1.005 trillion from N973.29 billion, surpassing Guaranty Trust Holdings Company that closed at N925.6 billion in market capitalisation- the second most capitalised banking stock on the NGX.  

So far, investors who invested in Zenith Bank, the most profitable bank in Nigeria have gained N251.17 billion, when the stock price opened for trading this year at N24 per share.
Some capital market analysts attributed Zenith Bank’s 3.22 per cent WoW gain to director dealings.
The bank in a notification on NGX disclosed that Provident Fund purchased Zenith bank stocks worth N404.8 million by value and by 12,734,104 volume last week.

However, Zenith Bank has now joined MTN Nigeria Communication (largest company in market capitalisation) , Airtel Africa, Plc, Dangote Cement Plc, BUA Foods Plc,  BUA Cement Plc with market capitalisation in trillion of naira on the bourse.
The six companies contributed 67 per cent or N21.560 trillion to market capitalisation that closed June 23, 2023 at N32.237 trillion.
As at June 23, 2023, MTN Nigeria retained its status as the most valued company on the NGX as its market capitalisation declined to N5.404 trillion, followed by Dangote Cement that outpaced Airtel Africa.

Dangote Cement, the second most capitalised cement producer on the NGX, has a total market capitalisation of N4.90 trillion, while Airtel Africa depreciated by N83.43 billion WoW to close at N4.76trillion in market capitalisation.
The stock price of BUA Cement added 4.65per cent WoW as it closed at N90 per share, taking its market capitalisation to N3.05 trillion.
Commenting on the development, the Vice President, Highcap Securities Limited, Mr. David Adnori, in a chat with THISDAY, attributed hike in Zenith Bank performance on banking stocks rally amid unification of the foreign exchange and fuel subsidy removal.

“These two policies have awakened the fundamentals of the macro-economy and it reflected in the Zenith Bank’s stock lately.  These policies are masterstroke as market stakeholders have been clamouring for it a long time.
“We have been clamouring for full unification of the foreign exchange so that there will be clear rates for everyone to see.
“With the unification of foreign exchange, we have seen the full value of Naira and if the naira is floated, it means foreign direct investors can seamlessly come-in and exit the stock market.”

While reacting to the unification of foreign exchange, the President Association of Capital Market Academics of Nigeria (ACMAN), Prof. Uche Uwaleke commended the unification of exchange rates which makes room for a more transparent foreign market.