Jul 24, 2007, 09:25 AM
It was clear that there was some manipulation in the build-up to the public offer by UBA. But share price sits at a pretty ~N20 above the share price. What's happening? What has changed? UBA is becoming notorious for bad customer service (apparently, STB + UBA as was, makes a bad mix...), yet, share price shows clear investor confidence. Who're the investors? A look at the volumes traded shows a trend that's rhyming with rumours. Has anyone heard about who's holding the bulk of UBA shares?
Jul 25, 2007, 07:17 PM
It is that notoriety from their history, that is still manifesting.
The UBA CEO is also a Director on the board of CSCS. FirstBank, highly esteemed and revered in the industry, was favorably granted massive concessions during the last offer. Oba Otudeko sits on the board of FirstBank, and the NSE. It could be argued, like i opined on the Firstbank thread, that FirstBank, having secured the necessary approval from SEC before the change in ISA-Underwriting Requirements, deserved to be exempted from the burden of the amendment. But then, FirstBank was allowed to derive massive savings from the reduction in cost of capital issues granted under the same ISA amendment.
Pre-merger STB revolutionised banking practices in Nigeria, but not without a price. The unprecedented growth stretched their banking sytems software; they had a very high turnover of manpower, disatisfied customers, got suspended by the Trade & Exchange dept of the CBN from forex trading for a while, ran afoul of the regulations a 2nd time, but they were pardoned from facing the dire consequences(license revocation) because of their sheer size, and the systemic collapse it could have led to in the industry. STB managed it cleverly. FCMB- on the other hand, made a mess of their infractions, and paid a heavy price.
Legacy-UBA? Well, theirs is only too well known.
As per investor confidence, UBA appears to have that in abundance, moreso in an atmosphere where public sector business has a direct positive bearing on investor confidence. We should also remember UBA "blazed the trail" of hitting the N1 Trillion mark in liabilities, declared N1 dps, and issued a bonus of 1 to 5. Disecting the books however reveals that the "liabilities" also included "contingencies"; and the reporting accounting period was 18months, which waters it down a bit, to the discerning few.
Just my own thoughts!
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