Rescued Banks' Shares Appreciate Over Recapitalisation Prospects - Investors in the Nigerian stock market rekindled their interest in the rescued banks' shares last week following the reassurance by the Central Bank of Nigeria (CBN) that all the affected banks would be recapitalised. Market analysts also stated that the performance of some of the affected banks' stocks was also buoyed by the release of their full year results for the 2010 financial year end last week. Some also argued that last week's announcement of the signing of Memorandum of Understanding (MoU) by one of the affected banks also rubbed off positively on its peers in that category. There had been insinuations that disagreements between the Board of Directors of some of the affected banks that were yet to sign an MoU and their preferred investors may derail the recapitalisation process. THISDAY findings showed that Oceanic Bank International Plc's share price which stood at N1.71 per share as at last Tuesday advanced significantly in four trading sessions to N1.96 per share at closing bell on Friday. In the same vein, while Union Bank of Nigeria Plc grew by 9 per cent to N3.28 per share as at Friday, as against the N3.01 per share it was last Tuesday, the share price of FinBank Plc which sealed an MoU with another local bank; First City Monument Bank Plc (FCMB), climbed by 10 per cent to 76 kobo per share on Friday, as against its last week's position of 69 kobo per share.

In the same vein, just as Intercontinental Bank Plc's share enjoyed a 9.23 per cent growth to N1.42 per share as at closing bell on Friday, compared with the N1.30 per share it attained last Tuesday, Afribank also rose to N1.82 per share on Friday, from N1.71 per share last Tuesday.

Analysts forecast that the market will continue to ride on the back of positive banking sector reforms, which according to them will significantly boost in activities and price appreciation.

The CBN had created the Asset Management Corporation of Nigeria (AMCON) to restore them to zero shareholders funds and make them attractive to investors.

CBN Governor, Mallam Sanusi Lamido Sanusi, stated last Thursday that all of rescued will definitely find new investors.

"I don't think there is any that will never get sold. Four are certainly on their way to mergers, two more have suitors, very good suitors, but we couldn't agree on commercial terms. Our first option is to get private sector partners. But in the absence of that happening, we can easily plug the hole, capitalise them, put in management, let the banks run for a year or two, and then do it later," Sanusi was quoted to have told CNBC Africa television.

Obinna Chima

This Day/10/05/2011