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Investors eye FBN, UBA, Access Bank as stocks hit new low

By BusinessNews Staff on January 17, 2015

As the Nigerian equities market continues to trend downwards leading to a buy opportunity in many stocks, investors are focusing on the banking sector given its upside potential in the near future.
Following the bearish performance of the market in 2014, many of the banking stocks suffered major decline, apart from three, all the other stocks shed between 15 per cent and 50 per cent.
The decline in the prices of banking stocks have continued in first two weeks of 2015, a development market operators have said is a buy opportunity for some discerning investors.
THISDAY checks showed that FBN Holdings Plc, United Bank for Africa Plc and \Access Bank Plc are top on the radar of investors.
However, investors preference for these stocks may not be unconnected with a recent report by analysts at Afrinvest Securities Limited.

According to the analysts, while the equities market has started on a bearish note, there are significant buy opportunities because several stocks have potential to make between double and three-digit percentage returns over the next 12 months.
They said FBN Holdings has the possibility of appreciating by 177.5 per cent during the period, while UBA has the potential upside value of 174.7 per cent.
According to analysts, FBN Holdings’ share price could rise to N22.17 over the next 12 months while UBA could hit N10.41.
Other stocks with potential for three-digit growth included FCMB Group Plc, with possible appreciation of 162.6 per cent, Diamond Bank, 133.1 per cent; Access Bank, 124.8 per cent; Skye Bank, 120.8 per cent.
After losing 16.1 per cent, the market has suffered another 16 per cent since the beginning of the 2015.
Analysts at Afrinvest attributed the bearish market situation to weak macroeconomic fundamentals pointing out that the steep decline in crude oil price and increasing Nigeria’s vulnerability were making investors to be anxious.
Afrinvest’s stock recommendation may further encourage investors’ participation in the bank’s ongoing rights issue. UBA is raising funds from existing shareholders through a rights issue that will close on February 5, 2015.
UBA plans to use the net proceeds of the N13b rights issue to strengthen its business units across Africa. UBA had in 2013 launched a new business development plan aimed at consolidating the bank’s position as a leading pan-African global financial services group. The three-year business development plan codenamed Project Alpha was designed as the group’s next focus of strategic transformation and it contained key transformation initiatives.
Group Managing Director, UBA, Mr. Phillips Oduoza, said the new business plan was designed to consolidate the group’s strategic positioning and fully capture the opportunities from Africa’s economic renaissance.

[ThisDay]

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