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According to The Will newspaper, investors have commended the recent reclassification of Fidelity Bank Plc stock from small price stock to medium price stock.
Giving his perspective on the development, Mr Boniface Okezie, the National Co-ordinator, Progressive Shareholders Association of Nigeria, commented, “Fidelity Bank has paid its dues in the financial services sector.
It has contributed immensely to the development of the small and medium enterprises (SME) sector yet pays dividends to the shareholders. Last year, it took the market by surprise by declaring a dividend of 50k per share which had not happened in previous years. The massive investment in ICT and effective branch network shows it is ready to serve the customers in a better way and make the shareholders happy”.
The NGX Limited, in a recent statement, said the reclassification became necessary because Fidelity Bank shares have been trading above the N5.00 mark since February 2023. Relying on rule 15.29 of the Rulebook of the Exchange, 2015 (Dealing Members’ Rules) NGX Limited noted that equities priced above N5 per share for at least four of the most recent six months of trading, or new security listings priced above N5 per share at the time of listing on NGX are classified as medium price stock.
“Fidelity Bank traded above the N5.00 mark on February 20, 2023 and has remained above the N5 mark up until close of business on 30 June 2023.This indicates that Fidelity Bank has been trading above N5 for at least four months in the last six months. Therefore, it should be reclassified from small price stock to medium price stock,” the NGX pointed out.
The development was an acknowledgement of Fidelity Bank’s robust contribution to the bountiful harvest that bargain hunters have enjoyed in the 62-year-old stock exchange in recent times, buoyed the bank’s corporate strategic plan.
Applauding the Nneka Onyeali-Ikpe-led organization, Prince Anthony Omojola, National Co-ordinator, Independent Shareholders Association of Nigeria (ISAN), asserted that, “Fidelity Bank is moving up in terms of performance. They have joined those paying interim dividends and they have also dipped their hand into big money tills for huge investment. They have borrowed big to be able to handle bigger contracts and be able to reap big. The reclassification is welcomed and I hope they will not disappoint us. If they are able to meet expectations, the benefit will be for Nigeria”.
On his part, Sam Ndata, Doyen of Nigerian Stockbrokers and non-executive director at UIDC Securities Limited commented, “This is a good development. If a company performs well, it will surely be rewarded to earn investors’ confidence. The NGX did very well by recognising and rewarding Fidelity Bank for the impressive performance of its stock”.
Fidelity Bank shares rose by 32 percent this year making it the nation’s best-performing bank share as of half year (June 30). On the back of this strong position, it plans to establish presence in at least five African countries after announcing the proposed acquisition of the London unit of rival Union Bank of Nigeria Plc. According to Onyeali-Ikpe, the bank is negotiating a second purchase which will be completed in the year.