Negative Signal: Board Director, Sola David-Borha, Sells Off All Shares In Stanbic IBTC

The Non-executive director at Stanbic IBTC, Sola David-Borha, sold off all her shares in the financial institution three months after she was re-elected by the shareholders of the company.

David-Borha sold 615,812 units of shares she held in Stanbic IBTC to take out her N38.92 million investment in the firm on Thursday, 31 August 2023, a corporate document obtained from the Nigerian Exchange Limited (NGX) on Friday showed.

She has been in Stanbic IBTC for almost three years. David-Borha is also the fifth highest shareholder among the board of directors as of the second quarter of 2023, based on the firm’s financial statement.

David-Borha’s sell-off is crucial considering the position she holds at Stanbic IBTC. She was also the former Chief Executive Officer and Chairman of the company before she became a non-executive director. 

Sell-off by a member of a board could send a negative signal to the capital market, affecting the confidence of minority shareholders and prospective investors towards Stanbic IBTC shares.

The capital market uses the share movement of directors and substantial shareholders to determine their activities in the stock market. A sell-off by a major investor or board member could spur minority shareholders to do the same and vice versa.

David-Borha’s decision to sell her shares comes amid a period when Stanbic IBTC share value is on a decline, with the share losing 6.47 per cent in August. 

Stanbic IBTC’s share price dropped from N69.5 kobo per share to N65 within August, as profit-takers milked the growth of the firm’s share between January to July 2023 when shareholders recorded a 107.77 per cent increase in their investment value. 

Between January to July, the share price rose from N33.45 kobo to N69.50 kobo on the back of increased demand for Stanbic IBTC shares in the capital market. 

However, since August, the share has been on a downward path, with the price dropping by N4.5 kobo as the third quarter heads into its last month.