First Bank joins elite group of stocks on Nigerian exchange
FBN Holdings, one of Nigeria's longstanding banks, achieved a significant milestone as its share price surpassed the N1 trillion market capitalization on Wednesday. This achievement followed consecutive gains of approximately 10%, propelling the share price to new heights during the week. With this, FBNH officially joins the esteemed group of SWOOTs, denoting Stocks Worth Over One Trillion Market Capitalization.
As of 10:34 am, FBNH experienced a notable increase of 9.91%, equivalent to N2.65, reaching a market capitalization of N1.056 trillion. Noteworthy members of the SWOOT category include Dangote Cement, Airtel Africa, MTN, BUA Cement, BUA Foods, Seplat, and most recently, Zenith Bank and GTCO.
In the year-to-date performance for 2023, FBN Holdings has exhibited exceptional growth, boasting a 160% increase since the year's opening at approximately N11.15. With the share price closing at N29.4 per share on Wednesday, FBNH's market capitalization stands at N1.055 trillion, underscoring its remarkable performance and market valuation.
Historically, the banking sector has thrived in environments marked by inflation and interest rate hikes, making it a favorable sector for investors. Three of the country’s largest lenders have joined the SWOOTs this year. So far, several factors have contributed to this impressive performance including the policies to harmonize different exchange rates and the floating of the naira. While banking stocks in Nigeria are on track to have one of their best years, analysts think they are still underpriced. The sector has seen a significant increase in profitability over the years despite challenging economic conditions. Despite these positive developments, the stocks are undervalued compared to their potential. Market experts are optimistic about the sector's prospects from a macroeconomic perspective. This indicates there is room for further growth and potential opportunities in the sector for equity investors.