PRICING OF PUBLIC OFFERING IN THE NIGERIA CAPITAL MARKET A CASE STUDY OF SELECTED BANKS

PRICING OF PUBLIC OFFERING IN THE NIGERIA CAPITAL MARKET A CASE STUDY OF SELECTED BANKS

ABSTRACT

The objective of this study is to examine the pricing of public offerings in the Nigerian capital market:  A case study of Zenith bank, Guaranty Trust bank, Oceanic Bank, IBTC and Chattered Bank were used.  Data for the research were collected through primary and secondary sources namely the annual reports and account and offer prospectus of the respective banks, Securities and Exchange Commission, Nigerian Stock Exchange, Central Bank of Nigeria (CBN) banking supervision unit annual reports on the banks, textbooks, journals and seminar papers. The data were analyzed and presented using tables, simple percentage and ratios.  The hypotheses were tested using the computed ex-right price of shares and comparing it with the offer price. The findings of the study showed that public offers in the Nigerian capital market were not over- priced, offer for subscription and right issues are the most popular method offering securities in Nigerian capital market, the pre- offer price of shares is higher than the ex-right price and the offer price during the study period.