Since the Central Bank of Nigeria published its circular on bank recapitalisation on 28 March, the NGX Exchange’s bank index has fallen 23.4%.
The market thinks that rights issues are in the offing and that equity dilution is on the cards. True enough, but has the correction gone far enough? In aggregate, we think it has. Markets do not like rights issues, as shareholders suspect dilution to the value of their shareholdings.
Analysts at Coronation Asset Management opined.
