Just one week after the CBN fine, the shares of MTN Group trading on the Johannesburg Stock Exchange has so far dropped by -31.06%.
Of the Four banks fined by the CBN, two (2) are listed entities on the floor of the Nigerian Stock Exchange. They equally recorded a relative drop in their share prices.
DIAMONDBNK share price was the most hit with -9.35% drop while STANBIC recorded a moderate -3.09% loss.
Source: NSE, Proshare Reseaarch
The Managing Director of Highcap Securities, Imafidon Adonri, said: “The banking index declined yesterday.
Previously, we saw some recoveries in the sector. But today (Thursday), the information has eroded investors’ confidence in the sector.”
He admitted it was appropriate to sanction banks that contravene CBN rules on transactions but expressed fear that the huge fine might impact negatively on the banks’ balance sheet.
“My fear is that the sanction appears to be severe. The punishment is capable of destroying the banks.
If there is a way the CBN can reduce the sanction, it will be welcomed.
“It is the people that committed the offence, not the bank. The severity of the sanction is not in order.
If anything happens to the banking sector, it sends a lot of panic to the market.”
Some economic experts are also of the view that this type of sanction may scared away potential foreign investment;
SOURCE: http://successfbi.com/mtn-share-price-drops-by-31-06-just-one-week-after-cbn-fines/