By Munachimso Obienyi
Following the current rising interest rates, insecurity and other economic challenges in the country coupled with uncertainty in the global economy, the value of seven bank stocks trading on the floor of the Nigerian Exchange Limited (NGX) depreciated in the third quarter (Q3) of 2022.
Sources revealed that activities on the NGX, which opened the quarter at N27.935 trillion in market capitalisation and 51,817.59, an index at the beginning of trading on July 1, 2022, closed on September 30, 2022, at N26.451 trillion and 49,024.16 index points, hence earning a quarter to date loss of about N1.484 trillion or 5.39 per cent.
A further check revealed that the NGX Banking Index, which measures the performance of the banks quoted on the floor of the Nigerian Exchange depreciated by 4.67 per cent during the quarter, from 397.79 index points to 379.20 points.
According to data obtained from the NGX which focused on the poor-performing bank stocks during the period under review, the new generational banks which include; GTCO Holdings Plc, Access Holdings Plc, FBN Holdings Plc, Stanbic IBTC Plc, Zenith Bank Plc, UBA Plc, and FCMB Group Plc, made a cumulative loss of N291.830 billion in market capitalisation.
These stocks were selected based on their price performance from quarter to date and are represented by the percentage loss. The decline recorded in the banks’ stocks is coming after the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted to increase the Monetary Policy Rate (MPR) twice, from 13 per cent to 15.5 per cent. The MPR was earlier, in May, increased by 150 bps.
In addition, the Committee also voted to increase the Cash Reserve Requirement (CRR) to a minimum of 32.5 per cent last month. It will be recalled that the domestic bourse was in positive momentum from the previous year (2021) to the first half (H1) of 2022 with a return of 21.3 per cent.
