Zenith Bank Shares Offer: Opportunity Or Hype?

What do my fellow capital market investors on Nairaland think? Is the Zenith Bank offer oversold or is it an oppurnity ??

1)  Zenith is one of the top companies whose share price has not gone below its offer price.
2)  Their IPO was 566% oversubcribed in 2004 ( The had to refund over N20 Billion naira)
3)  Their shares which was initially sold for N10.90 now sales for N19.64 but is being offered @ N16.90
4)  From 6th they will be coming to the market to raise an unprecedented N50 Billion from the
     market and there is talk that 70% is already prefentially allocated.

Would we continue to see a run away share value growth (Due to high demand) or wuld the share value plunge after this over-confident gamble and glutting the market with shares?

I think that -
1. It's a great oppurtunity and investment.
2. Those who couldnt buy in 2004, now have the oppurtunity.
3. With the reduced price, there's bound to be solid ROI (return on investment) in coming years !

As far as I am concerned, bank business is funny business, so I would never invest in a bank unless I'm purchasing a controlling share.  Unfortunately, the 25 billion naira requirement makes that extremely hard.

Zenith Bank has cultivated an image of being rock-solid, and since bank business is all about perception I would rate them as a solid bank.  However, I wonder why such a solid bank with deep pockets and rich customers, which has met the 25 billion naira capital base requirement, would still need public funds in order to expand their branch network.  This confuses me.

If since 2004 their share have been able to gaing just 1.8%, that's not so much of a gain. Considet google.com,their IPO share price was $300 but as at today it stands at   $381.

Just as Seun has pointed out why are they still running to an over-saturated market to raise capital.



You only need 10% to have a controlling share in any copany. But that will make you to be vulnerable to insider trading charges.

zenith bank is ok.

Bank business is about raising money, they can do so via an stock offering or deposit taking. In the case of Zenith they are doing both. The thing to watch for is the fact that this is a private company going public and some people are going to get damn rich with your money (forget the branch expansion story) which is different from deposits and paying you fixed interest over time. The question to ask is will they then work at creating value like they did when it was a private bank?

Zenith at the end of the day is an excellent bank which has performed consistently over time but the investment decision should be based on fundamentals. Is Zenith going to pay you dividends and grow value better than alternative investments. Note: The talent pool at Zenith is very limited, if they lose some key players, regardless of size they will get into trouble. That is not the case with banks like GTB, Access and a few others where the processes succeed individuals.

So look at the basics. I have not done this myself as I have no intention at buying Zenith at this point. But remember GTB, it came out very well and slumped after the insiders had made their money. I would, given the Nigerian market avoid periods of hype and promotion.

GTB slumped to as low as N8.60 after their offer that opened @ N10.60 before showing growth signs to trade now strongly @ about N13.00. Several other shares experienced the same thing, even STB(IPO N4.00, Slumped N3.25, PO N7.00).

On the other hand, we could consider Fidelity Bank which did their private placement @ N1.25, IPO @ N2.50 and riched a high of N3.75 ( a magic buy for speculators) and still has growth value.

Zenith has show consistent growth value just like First Bank (last PO in 2003 N18.00, Trades now @ above N32.00 :100%). Such Bank Blue chips favours long term buyers and not speculators.

Beyond the hype and marketing, what is the real value of the stock? Is the share underpriced (If so a time to buy) At what price do we hope to sale in say 6 months time? If we buy now will the price deep lower ?? or skyrocket?? what will you bet on?

Long term investors should be looking @ earnings per share over time while speculators should wondering how fast their ROI will take to get above 40%


Seun, money is everything they can never get enough..... they need to get bigger and get more branches to have more high-net-worth individuals deposit in them. Shore up their caiptal base to $1 Billion Dollars (N129 Billion) to get Federal reserve of "$500 million or above" Imagine what having that untouched by the government for 3-6 months will do for the bank!
But that above are for those waiting for dividends @ the end of the financial year!!

But how good is investing in stock when the ultimate goal is to wait for dividend.

now check this out
the people that bought shares @ 10.90naira per unit are enjoying almost 100% increase @this time
lets say u bought shares worth 20,000,000naira your shares now would be worth almost 40,000,000 because the shares now sell 4 19.90@the stock market.
so u see zenith bank has double their profit after tax in less than 2 years
i think its a good deal believe me!

Pendelite and Ralex are right on the issues presented but I don't think we should buy shares just for the sake of buying it or as someone  to avoid the "mistakes" of our parents.It is important that you check out the management team of the company before you buy the shares and the Banking Sector in Naija now is going through some transformations so be very careful what you buy.

That said, any time from now, I expect that Zenith Shares should go through its own down  process (it ) before a stable price can be reached so know why you're buying it........as a long term inverstment or just to make money in the short term.If it's for the short term........you should have bought large chunks at the initial IPO and be thinking of selling any time from now.

20 million naira is not our level abeg@ MONEL
give an example of what the average nairaland member would associate with

ps: how comes some people in your bnk don't know if u offer internet banking  n how long will i wait to confirm my login in details? 

hmmmmmmmmmmmmmm, Zenith bank shares, right?
Its ok, while the dance lasts. Atleast for the name snd reputation, Yes its a good buy.
Bit definitely not in the long run. If u ever need a bank share 4 a long term goal. My advice: Go for First bank and GTB.
Aside that, why don't u wait for Transcorp offer, did u get the idea, there is a govt interest in that upcoming homegrown Multinational coy, It will get a big boost!

@tjwealthy
there is no small investment buddy,

Oportunity or hype?

Look at this.

IPO was =N=10.90. 

One week after it opened on the floor of NSE, it hit =N=20.00

Implication: If you bought shares worth =N=109,000, it climbed to =N=200,000 in the first week.

A speculator (short term trader) would have made close to =N=100,000 without sweat!

It currently stands at =N=16 plus.

Anyone who sells now will make at least =N=5.00 per share bought then.


If you decide to invest long term, bonus shares and increase in share price that is bound to occur over the years due to the bank's excellent performance and profitability will mean that your share value will increase by the power of compound interest over the years.

THIS IS NO HYPE! BUY THOSE SHARES NOW!!!

Brokerage fees are 3.75% of the total for most firms, which is minimal.

Let us watch the share price by December and we will know  who is right.

I once challenged  a broker on Flour Mills, which was 14.00 at the time. She laughed and told me to face my profession as I knew nothing about shares (so she thought).

One and a half years later and the share is now 28.00.

So who is right after all?

Generally,the Nigerian Stock Exchange is one of the most stable in the world. Some schools of thought claim the Exchange is deliberately stage managed to favour some powerful individuals. For example, ideally the introduction of Sharia law in some states post 1999, would have reduced the share prices of Guiness and Nigeria Breweries PLC. However, 1999 investors in those 2 companies have reaped at least 150% return on investment, showing that Sharia which actually reduced sales in some states, didnt affect the ROI. A friend in the US, who recently acquired an MBA  from Wharton, took a loan of $100,000 in 2002 and invested it in the NSE. His investments are now worth about $380,000 at last count and he has paid about 70% of the loan, solely from the proceeds from Nigeria. Please once you have a good broker, I urge you to invest in the Stock Exchange.  If you're not in Nigeria and/or you're not sure of a broker, check out IBTC, City Securities Limited, BGL, Greenwich Trust.

WARNING- He knows the market, you need a broker who really knows the market. He also benefitted alot from the Public Offers that were floated between 2002-2005.