Diamond Bank rose to the highest in a month as investors looked for stronger profit from the Nigerian lender on increasing loans to small- and medium-sized businesses in Nigeria.
The stock advanced 0.8 percent to 6.35 naira by the close in Lagos, on Thursday, the strongest level since Sept. 9. Almost 6.2 million shares were traded, equal to 58 percent of the three-month daily average.
Nigeria started a N220 billion ($1.4 billion) microfinance fund to expand access to finance for small and medium enterprises as the nation moves to reduce dependence on oil revenue, Governor Lamido Sanusi said Aug. 15.
Diamond Bank has been lending to small businesses in Africa’s most populous nation, according to Vetiva Capital Management Ltd.
“We like the bank’s leadership in the small and medium enterprises sector, which offer high yields,” Pabina Yinkere, head of research at Lagos-based Vetiva, said.
Its target price for the shares is N10.30 naira, he said. Diamond Bank’s first-half profit rose to N12.6 billion from N9.9 billion naira a year earlier, it said on July 31. The company said on May 30 it planned to raise $550 million by issuing shares or debt to finance an increase in lendin
