By Joke Kujenya
AS THE bank’s capital-raising efforts continue to gain momentum, investors are rushing to secure shares of Fidelity Bank Plc.
The ongoing rights and public offers have seen massive subscriptions, reflecting the strong interest from various investor categories.
Recent market activity shows Fidelity Bank as the top performer on the Nigerian Exchange (NGX) for the week.
The bank recorded a turnover of 1.73 billion shares worth N18.27 billion across 1,579 deals.
This accounted for 51% of the total volume and 35% of the total value traded on the NGX during the week.
The overall market saw a turnover of 3.39 billion shares valued at N52.30 billion across 44,814 deals.
Despite a generally negative trend in the market, Fidelity Bank’s share price appreciated by 0.05% to close at N10.75 per share.
This is in contrast to the NGX All Share Index (ASI), which dropped by 0.46%, and the NGX Banking Index, which fell by 0.48%.
The positive performance of Fidelity Bank’s shares reflects strong investor confidence, driven by the bank’s ongoing rights and public offers.
Analysts widely consider Fidelity Bank’s offers as highly attractive, with the bank receiving “buy” recommendations in most investment research reports.
At the current offer prices, Fidelity Bank is expected to deliver immediate double-digit gains of between 11% to 18% for investors.
This makes the bank’s offers stand out among competitors, providing substantial returns.
The bank initially launched a N127.1 billion hybrid offer, which included a rights issue of 3.2 billion ordinary shares at N9.25 per share and a public offer of 10 billion ordinary shares at N9.75 per share.
Due to overwhelming demand, the bank received approval to issue an additional 8.2 billion shares to accommodate oversubscription.
The rights issue size was doubled to 6.4 billion shares, while the public offer was expanded to 15 billion shares.
The application period for the offers closes on August 12, 2024.
With a minimum subscription requirement of 1,000 shares or N9,250 for the rights issue and N9,750 for the public offer, a broad range of investors can participate.
Afrinvest West Africa highlighted the cost advantages of subscribing to the rights and public offers, noting that the issuing company covers transaction costs.
This is more favorable compared to secondary market purchases, where buyers bear additional charges and levies.
Investment experts at Arthur Steven Asset Management project that investors in Fidelity Bank’s offers could see up to a 57% capital gain over a short period.
They emphasize the bank’s strong performance, with a return on equity of 23% and consistent increases in dividend payouts over the past three years.
Fidelity Bank’s balance sheet shows a strong position, with total assets growing from N2.1 trillion to N6.2 trillion, making it the sixth-largest bank in Nigeria.
The bank’s total deposits also exceed N4 trillion, ranking it among the top six in the industry.
