Nigerian Banks Extend Gains on Optimism for Dividends, Earnings

LAGOS (Capital Markets in Africa) – Nigerian banking index rises 2.7% Wednesday in Lagos, highest since June 2009 on closing basis; Volume is more than twice the daily average for the past three months.

• “Market is reacting to a possible turnaround in performance in 4Q,” saysOluwasegun Akinwale, analyst at Codros Capital
• With full-year results due soon, investors are buying banking stocks to be positioned for attractive dividend yields, Kayode Omosebi of Asset & Resource Management says by phone
• Expects rally in banking stocks to persist as long as oil prices stays above $50 and Nigerian production at 1.80m bpd, Akinwale says
• FBN Holdings climbs 10% to highest since June 2015; volume is almost triple the daily average for past three months as stock advances for 6th day, longest winning streak since June
  • Upbeat on FBN earnings outlook in 4Q
  • Better performance in oil and gas will help reduce NPLs in this industry at the bank
• Diamond Bank advances 9.3%, climbs for 7th day to highest since Aug. 3, 2016
• FCMB gains 9.1%, Most since Jan. 9 on 1.6 times daily volume for the past three months; UBA gains 6%
• NOTE: Dec. 5, Nigerian Stock Index Rises to 3-Year High as Banks Rally