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GTCO Plc has surpassed the N1 trillion mark in market capitalization as investors in equities continue to favor value and growth stocks ahead of the second-quarter earnings season, according to data from the Nigerian Exchange (NGX).
Following the suspension of Godwin Emefiele as the Central Bank of Nigeria (CBN) governor, Nigerian equities have experienced a significant rally, with expectations of improved and healthier financial sector regulation.
Banking stocks have witnessed strong revaluation, although stockbrokers have noted that Nigerian stocks are still trading below their emerging market peers. GTCO’s share price has been repriced and settled at N34.40 per unit on Tuesday.
By the end of the trading session, the financial service group’s market valuation stood at N1.012 trillion, and market analysts anticipate a higher earnings debut for the second quarter, despite potential risks associated with its foreign and oil and gas loan concentrations.
Joining the trillion naira valuation “club” has increased the number of tier-1 banks in that category. Zenith Bank was the first to achieve a market valuation of N1 trillion, priced at N1.067 trillion, as reported on the local bourse’s website.
Equity analysts have suggested that GTCO may experience higher revaluation gains in the second quarter of 2023 due to a sharp devaluation of the local currency. CardinalStone Research states that the group has a positive net foreign currency position.
GTCO Plc’s estimated net open US dollar position is around $1.5 billion, while Zenith Bank has approximately $1.4 billion. However, GTBank may face challenges due to its high exposure to foreign currency and significant reliance on oil and gas loans.
In the first quarter of 2023, the group’s net interest income rose steeply to N82.15 billion, a significant increase from N52.70 billion, driven by higher interest rate adjustments in Nigeria. A strong return from its interest-earning assets contributed to a growth in pretax profit, reaching N74.09 billion compared to N54.29 billion in the same period last year.
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