Fidelity Bank Plc experienced a significant drop in its market value on Thursday, losing N14.4 billion on the Nigerian Exchange Ltd. (NGX). This decline coincided with the launch of the bank’s N127.1 billion rights issue and public offer.
The bank’s stock, which began trading at N10.85, fell by 45 kobo or 4.15%, closing at N10.40 per share. This decrease was driven by sell pressure from investors reacting to the new share offerings.
Fidelity Bank initiated a combined rights issue and public offer to comply with the Central Bank of Nigeria’s (CBN) recapitalization directive. The acceptance and application period for these offers began on June 20 and will conclude on July 29.
The rights issue includes 3.2 billion ordinary shares at 50 kobo each, offered at N9.25 per share, totaling N29.6 billion. This offer is in the ratio of one new ordinary share for every 10 ordinary shares held as of January 5, 2024. Additionally, the public offer comprises 10 billion ordinary shares at 50 kobo each, priced at N9.75 per share, totaling N97.5 billion.
Despite the significant offer, Fidelity Bank sold 162.1 million shares worth N1.73 billion on Thursday, a noticeable drop from the 1.1 billion shares valued at N11.3 billion traded in the previous session. This brought the bank’s total market capitalization to N332.93 billion.
Overall, the NGX stock market closed flat. The market capitalization, which opened at N56.478 trillion, inched up by 0.002%, closing at N56.479 trillion. Similarly, the All-Share Index saw a slight increase of 0.002%, moving from 99,840.95 to 99,842.94, boosting the Year-To-Date (YTD) return to 33.53%.
The market’s positive performance was supported by gains in key equities, including Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Unilever Nigeria, Guinness, Julius Berger, and Transnational Corporation. Market breadth also closed on a positive note with 35 gainers against 17 losers.
Champion Breweries led the gainers, rising by 9.88% to close at N3.56 per share. Conversely, Transcorp Hotel led the decliners, dropping by 10% to close at N90 per share.
Market activity showed a higher trade turnover compared to the previous session, with transaction values increasing by 53.64%. A total of 1.3 million shares valued at N25.33 billion were exchanged in 8,364 deals, compared to the 1.38 billion shares worth N16.48 billion traded in 9,899 deals previously. FBN Holdings dominated the activity table, with 871.08 million shares valued at N19.12 billion.
