Monday, May 31, 2016 3.38 PM / TheAnalyst
Skyebank has remained unable to release its Q4'15 and Q1'16 earnings reports, long after the expiration of the extension of the grace period, without detailed and rational reasons/narratives for this prolonged delay of the announcement of earnings.
This silence continues to generate huge concerns within the investing community with many analyst issuing sell recommendations after our April 13, 2016 commentary - Why investors should expect a contained earning from Skye Bank
This situation has begun to water-down the renewed investors' loyalty as reflected in the share price trend of the bank recently. See Price analysis below.
Unlike StanbicIBTC Bank in the same position that made it an obligation to keep the investing community updated at intervals on the key technical reasons for the delay in its earnings reports for same period(s) under review.
Skyebank’s guidance (as it were) revealed no specific reason(s) to justify this prolonged delay and silence on the earnings announcements after the expiration of the NSE extension/grace period.
A negative earnings surprise, which is what has been the signal for a while, may as well be a deteriorating financial performance/position; one that is likely to be one of the key reasons while the delay remain prolonged than expected. This has provided the fuel or credence to the actions taken by analysts.
Curiously, there has been no reaction or statement from key regulators regarding this situation; suggesting same as a new normal for the otherwise complaint bank.
The growing number of enquiries from subscribers / users of market information on the issue, seeking for guidance; meant that an advisory was inevitable and one that points to a cautious position on the stock due to strong possibility of considerable reduction in the firm's fair value.
Price Trend Review
From technical standpoint, the share price is already losing uptrend momentum, with a significant surge in bearish volume after hitting N1.42kobo (Intra-day high) on 27th May 2016.
It was observed that the stock had failed to sustain the price recovery pattern, after posting 43.96% gain in the last 8weeks.
Technical analysis revealed growing speculative tendency towards the stock while it was discernable that a significant plunge in market value of the firm was imminent.
The stock remains under active bearish pressure since 2011, falling from its high of N10.00kobo recorded on January 6th 2011 to trade at N1.31 as at May 31st 2015, representing 86.96% fall in its market value.
Released Earnings Report
We await the details of our enquiry to the usually respondent management on the issue and will publish their advisory/guidance therefrom. For now, the benefit of doubt tag on the stock appears justified up to some days from here on.
1. Why investors should expect a contained earning from Skye Bank – Apr 13 2016
2. X-Compliance as at May 27th 2016
3. SKYEBANK Seeks Four-Week Extension to File its 2015 Audited Financial Statements
4. SKYEBANK Issues Earnings Guidance for Financial Year Ended 31st December 2015
5. SKYEBANK Stock is at an extreme oversold territory bears may lose control