Strategic investor takes controlling stake in Wema Bank

..Triggers massive transaction volume on bank’s shares
•Shareholders okay move, indices down by N40b

Strong indications emerged yesterday that a strategic investor assumed to be Adebutu Kensington, is taking controlling stake of Wema Bank Plc, given the quantum of transactions executed on its shares on Monday and Tuesday.

Specifically, at the close of trading on Monday, June 17, transactions in the shares of Wema Bank topped the activity chart with 2.7 billion shares valued at N1.71 billion.

This volume of shares traded by the bank lifted total volume, as turnover rose 1,867.26 per cent to 2.86 billion units, valued at N3.92 billion, exchanged in 3,360 deals.

Also, similar massive transactions were recorded in the shares of the bank on Tuesday, June 18, which traded 2.4 billion shares valued at N1.48 billion, resulting to 1.65 per cent rise in turnover to 2.91 billion units, valued at N11.225 billion, exchanged in 3,324 deals.

The share price of Wema Bank, which stood at 0.60kobo at the close of trading last week Friday, rose to 0.63kobo on Wednesday, adding 0.03 gain.

A stockbroker familiar with the transaction executed on Monday and Tuesday told The Guardian that such a big-ticket transaction in Wema Bank shares is a strong indication that a strong strategic investor is taking controlling ownership of the bank.

He said: “There were large volumes on Wema shares transaction on Monday and Tuesday. A strategic investor suspected to be Adebutu Kensington is taking controlling ownership of Wema Bank.”

In his reaction to the development, the President, New Dimension Shareholders Association, Patrick Ajudua, said whatever it will take to make the bank more competitive is a welcome development.

“Whatever it will take to reposition the bank in order to compete with its peers is a welcome development for minority shareholder. You will recall that there is a movement in trading of the bank shares in last three days, which is an indication of possible boardroom changes. Also, it is just recently that the bank is able to declare dividend after 14 years. So I welcome the new development.”

Also, the President, Progressive Shareholders Association of Nigeria, Boniface Okezie, said: “If the man has the capacity to run the place as a core investor he is welcome on board, but I must also warn that the management must be allowed to operate with free hands with less interference.”

Meanwhile, the Nigerian equity market extended sell pressure to the third trading session of the week, following price depreciation in Nestle Nigeria, Seplat Petroleum Development Company (Seplat), and 17 others.

Wednesday, the All Share Index (ASI) decreased by 46.08 absolute points, representing a decline of 0.15 per cent to close at 29,772.72 points. Similarly, the market capitalisation lost N20 billion to close at N13.120 trillion.

The downturn was impacted by losses recorded in the bellwethers, amongst which were; Nestle Nigeria, Seplat, Presco, Conoil and MTN Nigeria.

Analysts at Cordros Capital, stated: “In the absence of a positive catalyst, we guide investors to trade cautiously in the short term. However, stable macro-economic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term.”

However, market breadth closed positive, with 21 gainers versus 19 losers. Forte Oil recorded the highest price gain of 10 per cent to close at N34.65 per share. NEM Insurance followed with 9.87 per cent to close at N2.45, while Thomas Wyatt Nigeria appreciated by 9.68 per cent to close at 34 kobo, per share.

Dangote Sugar Refinery gained 9.09 per cent to close at N12, while Ecobank Transnational Inc (ETI) garnered 7.84 per cent to close at N11, per share.
On the other hand, Consolidated Hallmark Insurance, Presco, and Prestige Assurance led the losers’ chart with 9.09 per cent each, to close at 20 kobo, N50 and 50 kobo, per share, respectively.

AXA Mansard Insurance followed with 6.28 per cent to close at N1.79, while Conoil went down by 5.87 to close at N21.65, per share.

The total volume traded fell 57.7 per cent to 1.23 billion shares, worth N67.89 billion, traded in 3,441 deals. Transactions in the shares of Forte Oil topped the activity chart with 973.25 million shares valued at N64.38 billion.
Prestige Assurance followed with 53.86 million shares worth N26.93 million, while eTranzact International traded 42.05 million shares valued at N100.08 million.

Guaranty Trust Bank traded 34.01 million shares at N1.05 billion, while FBN Holdings transacted 31.54 million shares worth N220.23 million.