GTCO Plc Reaches Trillion Naira Market Cap Milestone on NGX, Propelling Banking Stocks in Nigerian Equities Market
Segun Agbaje, GTCO GMD
Nigerian Equities Surge as GTCO Joins Exclusive Market Club
GTCO Plc, one of Nigeria’s leading financial service groups, has reached a significant milestone by surpassing the one trillion naira mark in market capitalization. This achievement comes as investors eagerly position themselves in value and growth stocks in anticipation of the upcoming second quarter earnings season, according to data from the Nigerian Exchange (NGX).
The Nigerian equities market has experienced a remarkable rally in recent weeks, gaining momentum following the suspension of Godwin Emefiele as the Central Bank of Nigeria (CBN) governor. Market participants are optimistic about the prospects of a healthier financial sector regulation under new leadership.
Banking stocks, in particular, have witnessed a substantial re-rating. However, industry experts inform Daily Global News that despite the ongoing rally, Nigerian stocks still lag behind their emerging market counterparts. Nonetheless, GTCO’s share price has been subject to strong repricing, settling at N34.40 per unit on Tuesday.
At the end of the trading session, GTCO’s market valuation stood at an impressive N1.012 trillion. Analysts predict that the company is poised to deliver higher earnings for the second quarter, despite the inherent risks associated with its foreign oil and gas loan concentrations.
By joining the trillion naira valuation “club,” GTCO becomes one of the tier-1 banks in this elite category. Zenith Bank, priced at N1.067 trillion, was the first bank to achieve this feat, as reported on the Nigerian Stock Exchange’s official website.
Equity analysts informed Daily Global News that GTCO is expected to experience a considerable revaluation gain in the second quarter of 2023 due to the sharp devaluation of the local currency. According to research conducted by CardinalStone, the group demonstrates a positive net foreign currency position.
GTCO Plc’s net open US dollar position is estimated to be around $1.5 billion, slightly surpassing Zenith Bank’s $1.4 billion. Nevertheless, GTBank may encounter challenges stemming from its significant exposure to foreign currencies and its substantial reliance on oil and gas loans.
In the first quarter of 2023, GTCO recorded a net interest income of N82.15 billion, reflecting a significant increase from N52.70 billion in the corresponding period of 2020. This growth in interest earnings assets played a vital role in supporting the company’s pretax profit, which rose to N74.09 billion from N54.29 billion in the same period last year.
As GTCO Plc continues to strengthen its position in the Nigerian market, its 37% exposure to the oil and gas sector and 57% reliance on foreign currency loans remain areas of scrutiny. Market observers will be closely monitoring the company’s performance in the coming months, as the Nigerian financial landscape evolves.
