Stanbic IBTC, GTB, Zenith likely to emerge best performing banking stocks HY 2017

Shares of three banks, Stanbic IBTC, UBA and Zenith are gradually inching to end first half of year 2017 as best performing stocks in the banking sector in Nigeria’s capital market.

As at the close of trading Thursday, June 15, Stanbic IBTC shares had recorded price appreciation of N15.69 year-till- date. Similarly, the prices of GTB and Zenith Bank shares had appreciated by N12.00 and N8.50 respectively compared to the first day of trading in the year.

Stanbic IBTC currently holds a market capitalisation of N310 billion, a P/E ratio of 9.29, while Zenith’s market capitalisation is put at N719 billion, with N4.47 earnings per share 5.13 P/E ratio. GTB on the other hand, has a market capitalisation of N1.05 trillion with N5.16 earnings per share and 6.93 P/E ratio.

“These banks have a model that is working and delivering returns on investment,” says Tosin Oyawale, a Lagos based Stockbroker.”

“If you look at their books you will realise that they have delivered value over the years, and with them, it’s a steady growth, that’s what the investors are looking at,” he noted.

According to Buchi Ejiogu, head of research and Strategy at Equator Capital, “what’s driving these stocks is the value they bring to the market. Stanbic IBTC has practiced banking in the conventional way, they have invested in the right direction and have continued to be profitable while remaining lean and focused.”

He added that he won’t be surprise that the shares of the three banks will end the year better priced.

Of 157 listed companies, which traded on the first day of 2017, only 45% of them recorded appreciation in their share-value-year till date as at June15. Outside the banking sector, Seplat, Dangote Cement, and Presco are the top performers.

The capital market continued with its impressive performance on Friday June 16, with a gradual recovery of some of the losses recorded in the first few months of the year.

In Q1 2017, the average daily value traded across all products on the NSE, increased by 47.58% to N3.56 billion ($11.61 million), from N2.41 billion ($12.16million) in the previous year. However, the average daily volume traded declined by 45.18% to 308.94 million units from 563.53 million units in Q1 2016, indicating more high value/low volume trades in Q1 2017 compared to the previous year.
At the end of the quarter, the average PE ratio of the Exchange’s listed equities stood at 18.83 compared to 13.98 in the previous year. The equity turnover velocity also increased by 3.45 percentage points to 10.28%, from 6.83% in Q1 2016.

The dividend yield for the 52-week period ended March 31, 2017 was 5.97%, compared to 6.93% for the previous year. On a sectorial basis, bank equities dominate the volume chart.