Nigerian equities market ended the week on a negative note as All-Share Index, ASI and market capitalisation climbed down by 0.83 percent and 0.80 percent to close the week at 24,228.79 basis points and N8.336 trillion respectively, according to the Nigerian Stock Exchange, NSE weekly stock market report.
Similarly, the report said all other Indices finished higher during the week, with the exception of NSE Premium Index, NSE 30 Index, NSE Banking Index, NSE Insurance Index and NSE Pension Index that depreciated by 0.83 percent, 3.01 percent, 0.35 percent, 2.45 percent, 1.25 percent and 1.25 percent respectively.
At the close of the week’s trading on the Nigerian bourse, the NSE update affirmed that a turnover of 4.476 billion shares worth N11.742 billion in 14,124 deals were traded last week by investors compared to a total of 1.202 billion shares valued at N9.641 billion that exchanged hands in the previous week in 13,712 deals.
It reported that the Consumer Goods Industry measured by volume led the activity chart with 3.331 billion shares valued at N5.695 billion traded in 2,511 deals; thus contributing 74.42 percent and 48.50 percent to the total equity turnover volume and value respectively. The Financial Services Industry followed with 1.008 billion shares worth N3.752 billion in 8,730 deals. The third place was occupied by the Oil and Gas Industry with a turnover of 55.332 million shares worth N416.383 million in 1,024 deals.
According to the NSE, trading in the shares of Fast Moving Consumer Goods, FMCG, firm, Tiger Branded Consumer Goods Plc, financial HoldCos, FCMB Group Plc and FBN Holdings Plc measured by volume accounted for 3.736 billion shares worth N4.872 billion in 2,443 deals, contributing 83.47 percent and 41.49 percent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 14,844 units of Exchange Traded Products, ETPs, valued at N14.134 million executed in 29 deals, compared with a total of 93,518 units valued at N1.158million transacted in the previous week in 48 deals.
In terms of bond, the NSE reported that a total of 4,990 units of Federal Government Bonds valued at N5.799 million were traded in 2 deals compared to a total of 150,000 units of Federal Government Bonds valued at N169.326 million transacted in the preceding week in 2 deals.
In terms of price changes, 21 equities appreciated in price during the week, lower than 22 recorded the past week. On the contrary, 35 equities depreciated in price, lower than 37 reported the previous week, while 134 equities remained unchanged, 131 recorded in the previous week.
There is no doubt that the financial sector has remained the driver of Nigerian capital market, because of the liquidity nature of their shares, but while some stocks are gaining strength, others are losing steam.
One of the banks yet to recover from the massive dumping recorded by the market in recent time is Unity bank, which is expected by crises section of analysts to have doubled its post reconstruction price by now to N5,00 per share.
As at the close of trade on the Nigerian Stock Exchange, NSE, Friday, February 26, 2016, the bank’s equity price reclaimed its previous position as the least priced stock in the banking subsector of the finance sector with N0.66 per share, with a turnover of 789,705 shares valued N 523,215.30 in 13 deals.
However, at the end of transaction on the floor of the NSE on Friday July 31, 2015, Unity Bank Plc. traded at N2.10 per share, and recorded turnover of 2,195,913 shares valued at N4, 237, 899.00 transacted by investors in 32 deal.
This reflects that barely one year after the bank concluded its share reconstruction and attained a post reconstruction price of N2.50, it has been unable to muster investor confidence and interest to further build on the gains of the reconstruction to attain target equity price growth.
While Unity bank attracted equity price of 66 kobo per share, Wema Bank which commands reasonable pricing of N1, 00 per share, without a any history of equity price reconstruction in recent time, Wema bank is positioned ahead on FCMB which attained a new low of N0.87 per share.
For the week ended February 05, 2016, the bank recorded a total of 10,507,715 shares worth N7, 201,371.84 in 83 deals, trading at N0.66 per share. At the end of transaction on July31, 2015 the bank recorded a turnover of 7,264,924 valued N14, 523,886.32 in 83 deals at the post share reconstruction price of N2.10 per share on 11.69 billion shares outstanding, against 50 kobo per share equity price pre reconstruction.
The above showed the level of losses suffered by investors in the bank over a short period of six months, reflecting erosions of gains expected to be achieved through equities reconstruction embarked upon by the bank.
From a loss position of N13 billion in 2013, the management of the bank led by led by Mr. Henry James Semenitari, turned around the bank’s fortune, ending the 2014 financial year in After taxes, net profit stood at N10.69 billion.
Unity Bank’s total outstanding shares of 116.89 billion ordinary shares of 50 kobo each, was reconstructed in the ratio of one-for-10 exchange ratio, the bank posts share reconstruction emerged with 11.69 billion ordinary shares by, cancelling about 105.2 billion ordinary shares. The share reconstruction was concluded on April 15th, 2015.
Could the bank be among some banks in the country to be acquired by stronger banks or seeking to merge with a better bank?, its legacy merger history could continue to pose a challenge.
It is however expected that the winging formula injected by Seminatari, may have evaporated with the architect.
Unity Bank Plc is the Largest Merger and Consolidation in the History of the Nigerian Banking Industry with the merger of nine financial institutions, representing nine legacy issues which may have been resolved at the emergence of the bank or still lingering.
For instance, in 2010 barely five years after the consolidation exercise, share crisis erupted in the bank, as aggrieved shareholders of Centre Point Bank Plc, one of the banks that merged to form Unity bank dragged the bank and some of its principal officers to court over alleged unfair treatment in the merger arrangement.
In 2012, it was reported that a security printing firm, South Beach Company Limited, dragged the bank before a Lagos High Court in Igbosere claiming a total sum of N143 million over an alleged breach of agreement and negligence which resulted in monumental business loss.
Cross sections of analysts have argued that Semenatari may have been brought into the bank for two purposes, to restore the bank to profitability and reduce its outstanding share volume which did not give room for profitability.
Meanwhile, a source said that exit of Semenitari was one of the board’s pre-emptive move based on the future direction of the bank, after a successful turnaround by Semenitari. It
“Furthermore, none of the banking regulatory institutions in the country, CBN, Nigerian Deposits Insurance Corporation, NDIC, or Securities and Exchange Commission, SEC, has raised any concern over happenings in Unity Bank” the source added.
On August 12th , 2015, the Central Bank of Nigeria, CBN confirmed the appointment of Mrs Oluwatomi Somefun as Unity Bank Managing Director, Chief Executive Officer. Prior to her appointment, Tomi was the Executive Director responsible for Lagos and South West Regional Operations, and oversight on Treasury and Financial Institutions Division.
On February26, 2015, CBN approved appointment of four non-executive dissectors by the bank. The non-executive directors are Mrs. Yabawa Lawan Wabi, Mr. Dauda Iliya and Mrs Priya Heal, while Mr. Sam Okagbue is the independent director.
The confirmation of Somefun as MD of the bank by CBN came barely one year after the Seminatari was confirmed MD of the bank by the apex regulator. Semenitari replaced Mr. Rislanudeen Muhammad, who held forth in acting capacity since the departure of Mr. Ado Yakubu Wanka as he resigned in August 2013.
The scenario above showed that Unity Bank for a period of two years, August 2013 to August 2015, has recorded a turnover of five CEOs or in acting capacity, an average of two CEO every year. These officers are Mr. Rislanudeen Muhammad who served as Acting CEO, Mr. Ado Yakubu Wanka served as CEO, Mr. Henry James Semenitari, and Aisha Azumi Abraham, appointed Acting Managing Director/CEO of Unity Bank Plc pending resolution of ongoing crisis.
Mr. Henry James Semenitari, s resignation paved way for Aisha Azumi Abraham, appointment as Acting Managing Director/CEO of the Bank. Within 2015, the bank enjoyed the services of Seminatari, Azumi Abraham, as acting CEO and Tomi, the current GMD.
Dr. Faruk Umar, a shareholder’s right advocate, urged the bank’s CEO to work and sustain the positive performance the bank recorded recently. “We are happy that the board chose an insider as the new MD. We urge her to sustain the performance of the bank, block any leakages and ensure good corporate governance,” he said.
Capital market experts and stakeholders expressed concern on the ability of the bank to resolve the crisis which led to the sudden exit of Seminatari as the GMD of the bank.
Semenitari’s unexpected exit from the bank showed the bank’s attempt at reacting to brewing internal crisis of which Aisha Azumi Abraham was called to hold forth as the substantive MD, pending resolution of the crisis.
This throws more questions than answers on the ability of the bank to have sustained declining trend even after share reconstruction, which cancelled nine shares out of every ten shares held by shareholders, cancelling about 105.2 billion ordinary shares.
Unity bank like other deposit money banks listed on the Nigerian Stock Exchange, NSE, regulated by the Central Bank of Nigeria, CBN, Nigerian Deposits Insurance Corporation, NDIC, Securities and Exchange Commission, SEC.
It is believed in many quarters that a financial institution which has the interest of taking custody of public/private sector funds could not be involved in trial and error, as the immediate past CEO had barely spent 18 months on the saddle as managing Director.
Unity Bank Nigeria has over the years sustained a trend that depicts prolonged repositioning exercise. This has received different forms of interpretation in the market and generated a company centric hearsay.
The Central Bank of Nigeria, CBN, in January 09, 2014 letter to Unity Bank of Nigeria Plc, conveyed its approval of the appointment of Mr. Henry James Semenitari as the managing director and chief executive officer of Unity Bank.
Meanwhile, returning to the pre- reconstruction price of N0.50 per share could negate the expected gains of the reconstruction. Also, the consequences of unstable or inconsistent management team of a financial institution constantly, and alleged unending internal legacy crisis could trigger a hearsay inimical to the company’s development.