Ripples Nigeria
First City Monument Bank Group earned N135.40 million in an insider trade by property investor, Primrose Investment Limited, in August 2021.
The real estate firm picked up from where it left off in July, as the company made series of investments into FCMB Group.
Primrose Investment invested N65.2 million into FCMB Group to acquire 21.1 million ordinary shares in seven tranches from August 4th, 5th, 6th, 10th, 12th, 26th and 27th of 2021.
Why Primrose investment in FCMB is important
Aside from increasing the liquidity of FCMB, insider investment, such as that of Primrose acquisitions, usual sends a signal to other investors in the commercial bank and capital market to take action.
When a large buy-in like Primrose is done, this motivates other investors to pump money into such company, hence, renewing investors’ interest in the shares of the firm, and appreciates the entity’s stock value – which means more cash to shareholders.
Although, there are illegal insider trading, but those made public is not considered as one. An investment made by a substantial shareholder or third party, which is what Primrose Investment is to FCMB, must be made available to the public and other shareholders.
A private insider trading is considered fraudulent, as the investor could have gained vital information that will favour its investment in a firm, hence, the reason such investment is not made public.
Breakdown of Primrose investment into FCMB
The 21,123,071 shares was purchased at an average price of N3.0916 per share. The breakdown of the acquisition showed that the first tranche was N21.83 million for 888,555 units of the firm’s share.
Another 534,516 units were purchased at N3.0762 in the second tranche, totalling
The second tranche was N1.64 million for 534,516 units, the next was N15.80 million for 5,100, 000 units, the fourth tranche was N15.73 million for 5,000,000 units.
Primrose Investment added another N1.54 million to acquire 500,000 units of shares, and increased the investment by N1.80 million for the acquisition of 600,000 units.
The seventh tranche by the property company was N7.59 million for 2,500,000 units of shares – bringing the total investment into FCMB Group to N65.27 million.
This is aside the N70.2 million Primrose Investment pumped into FCMB Group two months ago for an ordinary share of 22 million.
