Fidelity Bank shares gains over 20% a month after hybrid offer 

Fidelity Bank Plc has soared by over 20% on the Nigerian stock market, riding a bullish trend that saw its share price climb above the N13.00 mark by the third week of September.

This rally follows the bank’s hybrid offer of rights issue and Initial Public Offering (IPO) launched on June 20, 2024.

The hybrid offer comprised 10 billion ordinary shares at N9.75 for the public and 3.2 billion shares at N9.25 for existing shareholders, raising a total of N127.1 billion.

After a period of price consolidation from June to August, coinciding with the conclusion of the hybrid offer, Fidelity Bank shares have gained over 20% month-to-date (MtD) in September.

Share Price Trends

Fidelity Bank has maintained a strong bullish trend that dates back to August 2018, when its stock dropped below N2. Since then, the stock has gained more than 680%.

It began 2024 trading at a high of N10.85, with 900 million shares changing hands. However, uncertainties tied to recapitalization efforts affecting many large Nigerian banks caused a slight dip to N9 per share in April.

Despite this, the stock resumed its upward momentum, briefly correcting after touching a low of N9.00.

Following the conclusion of the hybrid offer in August, Fidelity Bank’s share price surged once again, gaining over 20% by the third week of September.

Drivers of Bullish Sentiment

One of the likely drivers of the latest share price surge is the bank’s successful hybrid offer which sets the stage for its upcoming private placement.

The bank’s hybrid offer, which launched in June, saw substantial demand, leading to an extension of the offer by 8.2 billion additional shares.

Of these, 5 billion were sold via the public offer, and 3.2 billion through the rights issue. This high demand caused market volumes to spike, with over 2 billion shares traded in June and 3 billion in July.

By the time the hybrid offer concluded on August 12, the stock began consolidating, but trading activity picked up significantly by mid-September.

Weekly volumes reached 27 million shares, which propelled the stock past the N13.00 level, continuing its upward trajectory.

Chairman’s Statement

In a recent message to investors, the bank’s Managing Director, Nneka Onyeali-Ikpe, expressed her appreciation for the strong response to the capital raise.

“With the conclusion of the Combined Offer, I am delighted to announce that we have met and surpassed the capital-raise target we set for ourselves in the first phase of our capital-raise exercise,” she said, adding that the level of investor confidence in the bank was “gratifying and humbling.”

Rising investor confidence, alongside strong market participation, continues to drive bullish sentiment around Fidelity Bank’s stock.