Ecobank shareholders concerned about share price fluctuations

Shareholders of Ecobank Ghana have raised some concerns about what they described as the frequent fluctuations in the share price of the bank on the local bourse.
The said although the share price performed well by the ending the year at GHC 3.19 as against GH3.0 in 2010, the price of the share has again dipped to GhC3.05 as at close of the first quarter.
A share price refers to the price of a single share of a number of saleable stocks of a company which makes buyers of the shares, shareholders in the company that issued the shares for sale.
Responding to the concerns of the shareholders about the fluctuations in the share price of the bank, the Managing Director of Ecobank Ghana, Mr Samuel Ashietey Adjei, described price fluctuations in share as a normal phenomenon in every stock market and should, therefore, be expected.
According to him, such movements tell how the bank, for instance, is performing on the exchange market.
He said the banks performance last year facilitated the movement of its share price from GHC 3.0 at the close of the year under review to GHC3.05 at the end of the first quarter this year and noted that there may be a further increase at the close of the year should the bank post further growth.
Mr Ashietey Adjei also explained that Ecobank is committed to ensuring growth in its business with the ultimate aim of becoming the largest and most profitable bank in Ghana.
“By this, we will be in the position to maximize returns on the investments of our shareholders” he added.
Some causes of share price movements
According to the Stock Market College several factors causes price movements of shares listed on a stock exchange market. It is not necessarily a normal phenomenon.
An increase in demand causes stock prices to go up, while an increase in supply also causes stock prices to go down. Again, investor sentiments also move stock prices in the short term.
Bank performance
Most shareholders were however full of praise for the bank for recording significant growth and announcing a dividend of 24 Ghana pesewas on every share.
In the 2011 financial year, the bank showed a strong performance by recording a profit after tax of GHC 72.381 million, representing an increase of 20 per cent over the previous year figure of GhC60,117 million.
The bank declared a dividend of Gh24p for the year under review as against Gh20p in 2010. Shareholders equity however dipped marginally from GhC227,646 million to GhC262,599 million.
Ecobank’s total assets almost doubled from GhC1,521,229 million in 2010 to GhC2,132,183 million in the year under review while loans and advances from the bank of saw some increase from GhC496,043 million to GhC849,893 million.
The bank’s customer deposits also saw a rise to GhC1,608,256 million last year to GhC1,116,332 million in 2010.
Total income by the bank increased by 30 per cent to GHC 243.5 million from the GHC 180 million 2010 figure with most of the revenue lines contributing to the growth.
For impairment charge of loans and advances, the bank recorded GhC6,167 million in the year under review against GhC5,762 million in 2010 while net trading income also more than doubled from GhC20,209 million in 2010 to GhC41,388 million.
Dividend income also went up from GhC453 million in 2010 to GhC682 million in the year under review.
The bank as at the end of 31 December 2011 had a number of 13,994 ordinary shareholders which shows a decrease from the 14,034 shareholders it had in 2011.