Investors react over Zenith bank’s fresh capital raise.

The recent release of Zenith bank Nigeria Plc. 2016 Financial Year result, followed by the release of information on its intention to raise fresh N100 billion capitals, has continued to trigger market reactions.

Business Times, however, notes that there have been mixed reactions trailing the release of the two vital information from the lender.

Reacting to this development, a Lagos- based stock broker, Paul Ezum, said that the two announcements from the bank almost at the same time impacted on its equity pricing.

He said that when the bank’s result was released, people believed that the bank did very well and that there is the need for them to take position in the bank, others however felt that the time for them to offload has come and they used that opportunity to sell while many others placed buy mandates.

Ezum observed that news about the intention of the bank to raise N100 billion fresh capitals filtered in, a cross section of investors started feeling otherwise.

“Some of the investors who have started buying the shares either to reap from expected price gain, based on the heard action that will follow dividend proposal, realized that the announcement of intention to raise fresh capital after paying dividend may affect pricing started pulling back”, he said.

On the other hand, Mr. Godwin Anono a retail investor and Chairman Standard Shareholders Association of Nigeria, noted that the bank offering dividend and also declaring its intention to raise fresh capital has been the tradition seen in the market “giving with one hand and taking with the other”

He, however, gave thumbs high for the bank for its sustained dividend policy, saying that the proposed intention by the bank to raise funds will succeed, because of its pedigree in rewarding investors. “The offer will succeed, because they have been consistent in paying dividend.

The chances of the offer scaling through is high” He said that because of the confidence investors have in the bank, if they chose to raise the fresh funds from bond, rights or secondary market, investors will subscribe because they have maintained a credible pedigree which usually drive investment decisions.