FCMB Share Offer Opens at N14 per Share
17 October, 2007
If you are looking to buy some growth stocks from the primary market, the just-opened First City Monument Bank (FCMB) share offer might just be a important opportunity to evaluate. The Nigerian bank is out to further boost its financial strength through a N76 billion capital injection. For those seeking opportunities in emerging markets, FCMB should deserve a look-in. Not only is the Nigerian economy looking good to break into higher tempo, its banking sector has undergone a rigourous fundamental reform that has given birth to a vibrant, much better capitalised banking system. FCMB is one of the deposit money banks that weathered the consolidation exercise, absorbing two other banks in the process.
Performance track record has remained healthy on key indices, making an investment opportunity in FCMB worth serious consideration. Capital growth since January 2006 has been a phenomenal 340%. While investors are always expected to carefully research stocks to ensure they invest wisely, the resilience, dynamism and bent for top standards that have been the hallmark of the bank would easily place it in good reckoning. It's founder and chairman remains one of the doyens of the banking industry in Nigeria, with a huge repertoire of experience to draw from. As the bank gears up for another phase of growth, this could be a good point to get on board.
The offer is open from Tuesday, October 16, 2007 to Tuesday, November 13, 2007. It is at N14 per share, a N3.45 or 24.64% discount on its traded price, technically suspended at N17.80 and then adjusted for dividend to N17.45. The total offer volume is 4.5 billion units and, in line with current capital market requirements, is 80% underwritten. Part of the package is to also raise the sum of $100 million or N12.6 billion from the international market, through the issuance of unlisted Global Depository Receipts, creating 900 units of shares.
The bank's aim is to deepen and expand it's consumer and investment banking markets, with an eye on market dominance. FCMB has been a key operator in the investment banking sector, a track record that it looks bent on driving further. Its current branch network of 135 across Nigeria is a reach it plans to extend with part of the funds it's working to raise. It also expects to boost working capital and position itself with more capacity for bigger ticket transactions. Training infrastructure and ebanking solutions will also be in the pecking order for fund injection, to enhance its capacity to meet envisaged growth in operations.
Banks in Nigeria have recorded remarkable transformation sequel to their substantial recapitalisation in 2005. FCMB has been one of the success stories, recording a stout growth in shareholders funds to N31.10 billion. Gross earnings grew 154% to N24.7 billion in 2006. Total deposits rose by the same rate to hit N263 billion, while pretax profit was up by 104% from N3.6 billion to N7.4 billion. Its reported first quarter results for the current year are showing further improvement, with a 137% growth in pretax profit. If the projections in the offer prospectus for earnings growth and dividend payout over the coming years are met, investors will expect to reap heavily from their investment.
FCMB has opened its share offer with a blitz of publicity. With the hours and days already counting off, investors in Nigeria who have shown a rapidly growing appetite for stock investments have one more opportunity to explore. Given the improving fundamentals of the Nigerian economy, today's investments may just prove golden if the economy fully zooms forward as the potentials would strongly point to. What is clear is that FCMB has shown a huge capacity to stand shocks and thrive and may just be breaking into a bigger phase of operation.
You can access the offer prospectus and application form,
straight from the banks website.
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