Nigerian billionaire Femi Otedola gains $138 million on Friday as FirstHoldCo shares hit record high

First HoldCo rose 10% to a record 162.80 naira on Friday morning. Femi Otedola's holding passed 2 trillion naira for the first time, about $1.52 billion.

The move added about 182.6 billion naira to his stake in a single session, roughly $138.4 million. He owns 12,338,067,668 shares, about 27.6% of the company, and chairs it.

Ten percent is as far as a Nigerian stock can move in one day. The exchange stops trading once a share hits that limit, so the buying pressure had nowhere left to go by mid-morning.

What is driving it is a deadline.

First HoldCo joins the FTSE Frontier 50 after the close on Friday, one of only six Nigerian companies admitted. Funds that track the index have to hold it from Monday, which means they have to buy it now, and Friday is the last session in which they can.

That index is the narrow one. It takes the fifty most liquid stocks across the twenty-six frontier markets FTSE Russell covers, and it is the benchmark international money actually follows. The broader Frontier Index Series carries 375 stocks and admitted ten Nigerian names. Nigeria took six of the thirteen new places worldwide in the Frontier 50.

None of it would have been possible eighteen months ago. Nigeria returns to frontier market status on Monday, Sept. 21, after three years as an unclassified market.

The shares were already running before the index decision. First HoldCo had gained 194.4% in the year to Sept. 14, the strongest performance of any Nigerian bank, against 67.96% for the banking index and 56.35% for the broader market. The previous record, 159.90 naira, was set on Sept. 1.

Otedola has been buying throughout. He has filed purchase after purchase with the exchange and has said publicly that he intends to pass 51%. Sustained accumulation by a holder that size takes stock out of circulation and supports the price independently of what the bank earns.

The earnings have supported it too. First HoldCo posted a return on average equity of 31.63% in the first quarter and 30.37% at the half year, higher than any tier-1 bank in Nigeria or South Africa, against a Nigerian median of 24.80% and a South African median of 16.20%.

It is priced accordingly. First HoldCo trades at 1.91 times book value and 17.56 times earnings, against a Nigerian median of 1.01 and 5.65.

Those returns carry a question. The naira's collapse after the 2023 foreign exchange reforms produced large currency revaluation gains that flowed into Nigerian bank profits, and investors have struggled to separate them from recurring operating income. As the exchange rate steadies, banks have to show the money is coming from lending, fees and transactions.

First HoldCo is the parent of FirstBank, founded in 1894 and the oldest bank in Nigeria.