Nigerian Bank Stocks Fall Most in Two Months on Foreign Exit
The Bloomberg NSE Banking Index (NGSEB10), which tracks the performance of the 10 most capitalized lenders, declined 1.9 percent to 255.52, it’s lowest since at least July 2008, by the 2:30 p.m. close in Lagos. The index is down 36 percent this year compared with a 21 percent decline in the Nigerian Stock Exchange All-Share Index. (NGSEINDX)
“Nigerian banks have cleared most of their non-performing loans and the issue of recapitalization is over,” Abiola Razaq, a Lagos-based banking analyst with Vetiva, said by phone today. “We will continue to see this type of selloff due to investors’ inability to differentiate between the Nigerian banking sector and others in the emerging markets.”
A debt crisis in 2008 and 2009 forced the central bank to fire eight chief executives of the country’s 24 lenders and set up the Asset Management Corp. of Nigeria, or Amcon, to stabilize the industry by buying the banks’ bad debts. Amcon has acquired bad debts worth 3.14 trillion naira ($19.4 billion), chief executive officer Mustafa Chike-Obi said Nov. 28.
Diamond Bank, which has operations in four other African countries, fell 4.9 percent to 2.5 naira, its lowest since at least May 2005. Fidelity Bank dropped 4.7 percent to 1.21 naira, also the lowest since at least May 2005.
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