NSE Lifts Suspension On Oceanic, Afribank, Three Others

Lagos: After a trading session more than the two-week full suspension initially placed on the five banks whose executive managements were sacked on August 14, 2009, the Nigerian Stock Exchange (NSE) on Tuesday lifted the action, following which there was trading on their shares.

Full suspension is a situation where there is no trading on the shares of a quoted company on the NSE, as a result of maybe, a company’s desire to undertake a share reconstruction or an announcement of intention to delist. On the other hand, trading continues on the shares of a company in the case of a technical suspension, which is usually imposed in the case of a company’s desire to undertake a public offer or rights issue.

The five: Afribank Nigeria, Intercontinental Bank, Oceanic Bank International, Finbank and Union Bank of Nigeria, were placed on full suspension on Monday August 17, following the sack of their executives by the Central Bank of Nigeria (CBN) to prevent panic selling of their shares by investors. Such transactions, it is believed, could have seriously eroded value, thereby further worsening the fate of small investors, most of who are already groaning under the weight of the crash in the value of their investment in the market.

Although shares of the five banks were traded on Tuesday, none except Finbank recorded as much as one million shares, while price movement occurred in just three of them- Union Bank, Oceanic Bank and Finbank. Union Bank lost the full 5.0 per cent allowed per session, shedding 63 kobo, after investors exchanged its 188,839 units for N2.260 million in 49 deals. Oceanic Bank’s 24 kobo was however higher than the band limit, as it represented 5.34 per cent, a situation that may require explanations by the exchange, while Finbank dropped seven kobo or 4.51 per cent. In 15 deals, 443,335 shares of Oceanic Bank were traded for N2.083 million; just as 2.135 million units of Finbank changed hands for N3.16 million in 19 deals. Price changes in Afribank and Intercontinental Bank were not possible, going by the rule on the exchange that requires minimum units of 50,000 shares for investors to raise or drop the price of any stock during trading. Afribank recorded

5,878 shares valued at N29.154 million in 11 deals, and Intercontinental Bank- 23,450 units exchanged for N154.535 million.

Sola Oni, Assistant General Manager and head, Corporate Affairs at the NSE, explained that Tuesday’s lifting of the suspension, which should have been effected on Monday followed the satisfaction by the NSE and indeed the stockbroking community that stability has since returned to the banks. The suspension, which the CBN Governor, Sanusi Lamido Sanusi, wanted to last three months, as explained by Prof. Ndi Okereke-Onyiuke. The CBN Governor, she noted was however persuaded by the arguments to the contrary she put forward, along with Ms. Daisy Ekineh, acting Director-General of the Securities & Exchange Commission, at the meeting of the Financial Sector Regulatory Committee, at the weekend after the CBN action, following which the suspension was limited to two weeks. The period was to enable the regulators monitor investors reaction to the sack of the five bank chiefs.

A decision on whether to lift the action entirely or downgrade it to technical suspension, was to have been taken last week, after a meeting of the regulatory chiefs, including Senator Udoma Udo Udoma, chairman of the SEC, Aliko Dangote, President of the NSE, along with their chief executives and the CBN Governor. The suspension would then have taken effect from Monday, but for the absence of Sanusi, who travelled for a road show in London, mid-last week, accompanied by the chief executives of the five affected banks, to explain the recent action of the CBN to the international financial community. Specifically, the meeting attended by officials of the five correspondent banks, was reportedly to assure all that the steps taken are in the best interest of the affected banks and to ensure that they do not fail.

Mrs. Okereke-Onyiuke had told journalists on Friday last week that contacts would be made with the others expected to attend the meeting where the decision on whether to lift the suspension would be taken. It could not however be ascertained on Tuesday whether the meeting held prior to the lifting of the suspension, or whether contacts had been made with the apex bank before the action, since the NSE assured that it would not be done in the absence of the CBN Governor.

Oni did not however say whether the meeting did hold before the lifting of the suspension.