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Wema Bank Drops Most in Eight Years on Price Bets: Lagos Mover

Feb. 14 (Bloomberg) -- Wema Bank Plc, a Nigerian lender, dropped the most in more than eight years as some investors bet that full-year earnings would be insufficient to sustain the price.

The shares retreated 9.6 percent, the most since September 2004, to close at 1.70 naira in Lagos, Nigeria’s commercial capital. About 9.14 million securities traded, or 150 percent of the three-month daily average volume, according to data compiled by Bloomberg. The stock decline ended a 21-day record rally.

“Many investors are selling the bank’s shares and the demand is no longer sufficient to hold the price at the previous high level,” David Adonri, chief executive officer of Lagos-based Lambeth Trust and Investment Co., said by phone. “It is not certain if the bank’s full-year result will be good enough to sustain the bullish price.”

Nigerian banks are expected to release their full-year results starting this month after the Central Bank of Nigeria changed to a December common year-end for all the country’s lenders as part of reforms.

Wema Bank posted a loss of 1.8 billion naira ($11.4 million) for the nine months through September compared with a profit of 1.2 billion naira a year earlier, it said in a Jan. 4 statement on the Nigerian Stock Exchange website. Revenue rose to 19.8 billion naira from 17.4 billion naira.

The stock has more than tripled this year, compared with a 19 percent rise in the Nigerian Stock Exchange All-Share Index.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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