Oct. 10 (Bloomberg) -- Diamond Bank Plc rose to the highest in a month as investors looked for stronger profit from the Nigerian lender increasing loans to small- and medium-sized businesses in Africa’s second-largest economy.
The stock advanced 0.8 percent to 6.35 naira by the close in Lagos, Nigeria’s commercial capital, the strongest level since Sept. 9. Almost 6.2 million shares were traded, equal to 58 percent of the three-month daily average.
Nigeria started a 220 billion-naira ($1.4 billion) microfinance fund to expand access to finance for small and medium enterprises as the nation moves to reduce dependence on oil revenue, Governor Lamido Sanusi said Aug. 15. Diamond Bank has been lending to small businesses in Africa’s most populous nation, according to Vetiva Capital Management Ltd.
“We like the bank’s leadership in the small and medium enterprises sector, which offer high yields,” Pabina Yinkere, head of research at Lagos-based Vetiva, said by phone. Its target price for the shares is 10.30 naira, he said.
Diamond Bank’s first-half profit rose to 12.6 billion naira from 9.9 billion naira a year earlier, it said on July 31. The company said on May 30 it planned to raise $550 million by issuing shares or debt to finance an increase in lending.
The stock has advanced 29 percent this year, compared with a 31 percent gain in the Nigerian Stock Exchange All-Share Index.
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