₦13,050 in 2004: DID MY GTCO INVESTMENT BEAT INFLATION AFTER 22 YEARS?
By Asalu Adegboyega Yinka
As a student of Accounting at the Federal Polytechnic, Offa, Kwara State, in 2004, I invested ₦12,000 to purchase 960 units of Guaranty Trust Bank (GTBank) shares at ₦12.50 per share on the secondary market.
In addition to the purchase price, I paid ₦750 registration fees to the stockbroking firm and ₦300 brokerage commission, bringing my total investment expenditure to:
₦12,000 + ₦750 + ₦300 = ₦12,050
Over the years, GTBank rewarded shareholders with several bonus issues. Based on my records, the original 960 shares increased by 2,447 bonus shares between 2006 and 2011, bringing my total holding to approximately 3,407 shares without additional capital investment.
The cumulative gross dividends received from 2004 to date amount to ₦174,963 excluding the deduction of 10% withholding tax.
Today, GTCO is trading at ₦129.90 in the equity market. The stock opened the year at ₦90.70, has recorded a 52-week high of ₦156.95, and has delivered a year-to-date return of approximately 43.11%.
If I decide to exit my entire position at ₦129.90, my 3,407 shares would be worth:
3,407 × ₦129.90 = ₦442,569.30
Adding the accumulated gross dividends:
₦442,569 + ₦174,963 = ₦617,532
Therefore, based on these assumptions, the investment would have generated a total value of approximately ₦617,532
against an original expenditure of ₦13,050,
₦617,532 − ₦13,050 = ₦604,482.
After 22 years, the question is not simply how much the investment has gained in nominal terms, but whether it has preserved and increased my purchasing power after accounting for inflation.
This investment did not merely preserve purchasing power; based on these figures, it substantially beat inflation.
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