Access Holdings Market Value Slides to N18.50 – Market Note

Nigeria’s largest commercial banking group, Access Holdings Plc, was among the financial services stock that drove the banking index down on Monday on the Nigerian Exchange.

The share price of Access Plc declined slightly to N18.50 on Monday, losing about 5% of its market valuation in the last seven trading sessions on the domestic bourse. Transactions on Access Plc accounted for 6.31% of share volume traded on the Nigerian Exchange on Monday.

About 24 million shares exchanged hands in the market, data from the local bourse showed. But the trade volume was negative for the stock, reducing the market value of Access Holdings Plc to about N658 billion.

The market anticipates the financial services group to release its earnings results before the deadline set for listed companies. The group is trading at a 40% discount to its 52-week high in the equities market.

With a plan to sell 17.7 billion shares, Access Holdings Plc has opened its rights issue to shareholders at N19.75 per share, the financial services group said at its signing ceremony held in Lagos.

According to stockbrokers, the rights issue trading above stock market price give investors an option, with possibility that market price would outrun rights issue price over sustained demand in the open market.

As one of the top lenders that benefited from the devaluation of the naira to boost earnings performance, analysts have said a 70% applied rate on FX gains would affect Access Holdings Plc. In its latest commentary note, Moody’s explained that the move is credit negative for banks under its coverage universe, including Access Plc.

The Nigerian Presidency announced a one-off 50% windfall tax on Nigerian banks’ foreign-currency revaluation profits in 2023 to raise funding for infrastructure and other critical spending as part of a N6.2 trillion ($4 billion) addition to the 2024 budget.

The government expects the tax to be implemented as part of a bill amending the country’s Finance Act 2023, which was sent to the legislature for approval. The approved adjustment set a one-off 70% rate for FX gained backdated to January, 2023.

In its published commentary note, Moody’s said the tax will significantly reduce the profits available to banks for problem-loan provisioning and transfers to retained earnings, which form part of regulatory capital, both credit negative for the sector. #Access Holdings Market Value Slides to N18.50 – Market Note

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