FBN Holdings Records 473m Shares At 65% Premium In Off Market Trade

After days of robust growth in its share price, stockbrokers sold a total 573,567,857 units of FBN Holdings Plc at N10.05 per share on Thursday.

Of this volume, a significant 473m shares changed hands in an Off market trade during the session by way of a cross-deal by FBN Quest Securities Limited (representing both the ‘sell side’ and ‘buy side’ in the transaction) at N16 per unit, representing a premium of 64.95 percent of previous day’s closing N9.70 share price.

During the day, the price made a new 52-week high of N10.65 per share, and a N9.50 low for the session, before closing at N10.05.

Experts say off-market trades require a prior agreement between the buyer and seller to execute on a listed security at an agreed price and quantity. Requirements for executing off-market trades include a two-party limit and the use of a broker licensed by an exchange.

When contacted, an official of the NGX Corporate Communications unit promised to make some findings and revert, but did not respond as promised.

On September 6, 286.184m units of FBN Holdings were traded at N7.48; followed on September 20, by 496.318m shares at N7.50 each; while six days later, the group’s 325.355m units were exchanged at N7.65 per unit; before the latest one.

Commenting on the deal, Ambrose Omordion, Chief Research Officers, Investdata Consulting Limited, explained that “off-market transactions anywhere in the world are normal and legal, just as premium transactions, but in this case, FBN Holdings and FBNQuest Securities are the same group, which is called self-dealing. Self-dealing at a premium of 65 percent against the previous day’s price of N9.70, given that FBNQuest represented the buyer and seller in this case. The deal was consummated without prior notice to shareholders and the investing public of plans to undertake a share buyback, could be interpreted as manipulation. Otherwise, the operator and regulators (NGX and the Securities Exchange Commission) need to provide explanations that would assure investors that the market remains transparent, and in the process boost investor confidence.”

Market analysts and investors are seemingly agitated by the development, given the belief that the cross-deal price suggests the direction of the stock, going forward.