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Insider trading costs Zenith Bank’s Ebenezer Onyeagwu N41.03m



The Group Managing Director and Chief Executive of Zenith Bank, Ebenezer Onyeagwu, has increased his shareholding in the lender, six months after the previous acquisitions.

Onyeagwu engaged in the insider trading on November 22, 2021, according to a NGX company document seen by Ripples Nigeria. The GMD paid N41.03 million to acquire 1.70 million shares at an average price of N24.10kobo per share.

The investment banker acquired the shares in two tranches; 1.30 million shares at a cost of N24 per share, while the second was 402,762 shares worth N24.20 kobo per share.

Onyeagwu‘s recent acquisitions increased his networth in Zenith Bank to N1.16 billion when his current holdings, 48,202,762 shares are pegged against today’s closing stock price of N23.4kobo per share.

He has been on a shopping spree this year, acquiring five million ordinary shares in Zenith Bank in March. The investment cost Onyeagwu N112 million during the period.

Two months after, the businessman purchased 1.4 million ordinary shares in the lender for N32.2 million in May, analysis of filling to the Nigerian Exchange Group disclosed.

READ ALSO: Zenith Bank GMD, Onyeagwu, urges ‘high level’ regulation of Fintechs to curb startups’ excitement

The continuous investment in Zenith Bank by Onyeagwu shows the GMD sees a positive growth for the lender’s stock, and influence capital market sentiment in favour of the firm, as insider trading is a form of map that guides outside shareholders or prospective investors.

When an insider, who could be executives, staff, relatives or substantial shareholders like Onyeagwu, sell off their shares, it sends a negative outlook to the capital market, and may compel outsiders to follow suit.

However, when the insider conducts a share purchase, it encourages outsiders to go ahead to buy, as it’s a positive signal that boost investor confidence.

Insider trading involves a company’s executive, staff, substantial shareholder or their relatives – persons that have access to sensitive non-public materials – dealing in the firm’s stock.

Note that there are two types of insider trading, legal and illegal. Insider trading is legal when the transaction is reported to the Securities and Exchange Commission (SEC).

But its illegal when the insider uses non-public materials to trade and doesn’t report the transaction to the capital market authority.

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