Fidelity Bank Plc has experienced a remarkable increase of over 20% on the Nigerian stock exchange, benefiting from a bullish trend that propelled its share price past the N13.00 threshold by the third week of September.
This surge is attributed to the bank's hybrid offering, which included a rights issue and an Initial Public Offering (IPO) initiated on June 20, 2024.
The hybrid offering consisted of 10 billion ordinary shares priced at N9.75 for the public and 3.2 billion shares at N9.25 for existing shareholders, successfully raising a total of N127.1 billion.
Following a phase of price stabilization from June to August, which coincided with the completion of the hybrid offering, Fidelity Bank's shares have appreciated by over 20% month-to-date (MtD) in September.
The bank has sustained a robust bullish trend since August 2018, when its stock fell below N2. Since that time, the stock has appreciated by more than 680%.
At the start of 2024, trading commenced at a peak of N10.85, with 900 million shares traded. However, concerns regarding recapitalization efforts impacting several major Nigerian banks led to a slight decline to N9 per share in April.
Nevertheless, the stock regained its upward trajectory, experiencing a brief correction after reaching a low of N9.00.
Following the completion of the hybrid offering in August, Fidelity Bank’s share price surged once more, achieving an increase of over 20% by the third week of September.
A key factor contributing to the recent increase in share prices is the bank's successful hybrid offering, which paves the way for its forthcoming private placement.
Launched in June, the hybrid offer experienced significant demand, prompting an extension that added 8.2 billion shares to the offering.
Out of this total, 5 billion shares were sold through the public offering, while 3.2 billion were allocated via the rights issue. This robust demand led to a surge in market activity, with over 2 billion shares traded in June and 3 billion in July.
As the hybrid offer wrapped up on August 12, the stock began to stabilize, but trading volumes surged notably by mid-September.
Weekly trading volumes reached 27 million shares, enabling the stock to surpass the N13.00 mark and maintain its upward momentum.
In a recent communication to investors, the bank’s Managing Director, Nneka Onyeali-Ikpe, expressed gratitude for the overwhelming response to the capital raise.
“With the completion of the Combined Offer, I am pleased to report that we have not only met but exceeded our initial capital-raise target for the first phase of this initiative,” she stated, noting that the level of investor confidence in the bank is both “gratifying and humbling.”
The combination of rising investor confidence and strong market engagement continues to foster a positive outlook for Fidelity Bank’s stock.