ETI; 1 bank on 3 Exchanges & not 1 price on 3 Exchanges

Dear Africa interested individuals;
                                                                I got thinking today when I saw the different price trends for ZCCM on the Lusaka Stock Exchange and NYSE Euronext.  Why are prices on majority of African stock exchanges not fully reflective of present day operational, structural and event specific developments?  Let us welcome Ecobank Transnational Incorporated (ETI) into the picture.

ETI trades on the Nigeria, Ghana & BRVM stock exchanges.   ETI on the Nigeria Stock Exchange closed on September 21st, 2015 at $0.093, $0.094 on the BRVM exchange and $0.076 on the Ghana stock exchange (GSE.)  ETI's price on the GSE is 18% - 19% less than that on the NSE & BRVM respectively. Clearly, Ghanaian investors do not rate ETI equitably and the reason may not be farfetched.

Ecobank Nigeria was delisted from the NSE in January 2012.  Just prior to delisting, ETI was trading at a price approximately 5X greater than that of Ecobank Nigeria. The eventual sharing formula between ETI and Ecobank Nigeria shareholders was 1 ETI share in exchange for 5.16 Ecobank Nigeria shares.

Ecobank Ghana (EBG) is listed on the GSE alongside ETI.  Ecobank Ghana as at December 31st, 2014, made up only 7% of the assets of the ETI group.  Despite this fact, Ecobank Ghana's share price is 26X more expensive than that of ETI on the GSE (7.84 Cedi to 0.30 Cedi.)  This coupled with the pricing discount on ETI on the GSE, reflects a disconnect between investors on the GSE and ETI.  This disconnect did not happen on the NSE when both were still listed as at December 2011.  The largest bank in Ghana is apparently more relevant to Ghanaian investors than Africa's largest bank (which Ecobank Ghana is a subset of) by reach to the extent that ETI's price on the GSE could not align with the two other African stock exchanges.  

The GSE is currently under review for addition to the MSCI Frontier Markets Index. Anomalies of this nature will not help its case.  I guess it's time for shareholders of ETI across all three exchanges to be able to buy ETI on one stock exchange and sell on the other.  East Africa keeps coming together while West Africa keeps drifting apart even as low as one company's stock price on three West African stock exchanges refusing to speak with one voice.  West Africa remember that the sun sets in the West; you have to set the pace.  It is time to go back to the drawing board.   

        Tell others to tell others about this Africa Research Blog; the financial truth is here.  

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