Some stockbrokers in the Nigerian capital market have observed encouraging signs of high investor participation in the ongoing public offerings and rights issues by banks.
The stockbrokers in an exclusive interview with Nairametrics noted the widespread public awareness about these offers, expressing confidence that most banks will be fully subscribed, if not oversubscribed
Nigerian banks are currently intensifying efforts to bolster their capital reserves in response to the Central Bank of Nigeria’s recent announcement on new minimum capital requirements.
These measures aim to strengthen the country’s financial system and enable lenders to play a more significant role in boosting economic growth.
Banks that have commenced a new offer
GTCO Holdings Plc, Access Holdings Plc, and Fidelity Bank Plc are financial institutions that have recently launched new offers, having secured clearance for their offer prospectuses and registration of offer shares by the Securities and Exchange Commission, Nigeria (SEC Nigeria).
Guaranty Trust Holding Company Plc has announced the opening of its public offer for the subscription of 9,000,000,000 ordinary shares at 50 kobo each, priced at N44.50 per share, with a total value of N400.5 billion.
Access Holdings Plc is currently engaged in a capital-raising initiative totalling N351 billion through a rights issue to existing shareholders. This rights issue includes the offering of 17.772 billion ordinary shares at N19.75 per share.
Fidelity Bank has initiated its public offer of 10 billion ordinary shares at 50 kobo each, priced at N9.75 per share. Additionally, the bank is conducting a rights issue of 3.2 billion ordinary shares at 50 kobo each, priced at N9.25 per share, aiming to raise N127.10 billion.
However, there is no available data confirming the offer participation levels even as banks continue to invest in massive promotions.
What stockbrokers are saying
Managing Director of Arthur Steven Asset Management Limited and former President of the Chartered Institute of Stockbrokers (CIS), Mr. Olatunde Amolegbe in an exclusive interview with Nairametrics highlighted a surge in interest and inquiries regarding the ongoing bank rights issues and public offers.
He noted that the response, particularly from retail investors, is significantly higher than usual, indicating a robust engagement with these financial instruments.
He emphasized the widespread public awareness about these offers, expressing confidence that most banks will be fully subscribed, if not oversubscribed.
“This heightened interest suggests that the public is well-informed and actively participating in the investment opportunities presented by the banks,” he said.
However, Amolegbe also pointed out that it is still too early to make accurate predictions about the final levels of subscription.
According to him, many of the current offers have several weeks remaining, and the full extent of investor participation will only be clear once the subscription period closes.
He noted that the banks themselves are leveraging their strong networks and marketing teams to effectively communicate their stories to the investing public.
“Meanwhile, stockbrokers are playing a crucial role by providing the necessary investment advice and analysis to potential investors.
This collaborative effort is aimed at ensuring that investors are well-informed and confident in their investment decisions,” he said.
Also, in an interview with Nairametrics, the Executive Vice Chairman of Hicap Securities Limited, Mr David Adonri observed encouraging signs of investor participation in the ongoing public offerings and rights issues by banks.
Adonri shared his perspective based on his current understanding of the market dynamics.
“From my minimal knowledge, I think investors are participating well in the current banks’ public offerings and rights issues,” Adonri remarked.
He highlighted the positive trend in investor engagement, noting that the response so far suggests a healthy interest in these financial instruments.
However, Adonri also emphasized the importance of waiting until the offerings close before making any definitive predictions about the levels of subscription.
“Not until the offerings close, one cannot predict the levels of subscription,” he cautioned.
Adonri said his comments reflect a cautious optimism within the financial community, as market participants closely monitor the progress of these bank offerings.
“The eventual subscription levels will provide a clearer picture of investor sentiment and confidence in the banking sector, influencing future market strategies and financial planning,” he said.
Victor Chiazor, Analyst and Head of Research at FSL Securities Limited said it will be challenging to determine the exact level of investor participation until the offer period closes.
He noted that investors have the flexibility to access the offers through any stockbroking firm, making it difficult to gauge the overall response prematurely.
“The full picture of investor engagement will only become clear once the subscription period has ended and all data from various stockbrokers have been consolidated,” he said.