Companies operating in the Nigerian oil and gas sector have dominated trading activities in the capital market in the last week as investors mop up oil shares amid President Bola Tinubu’s reform in the sector.
Tinubu had in his inaugural address on May 29 announced the removal of fuel subsidy, a move that would allow marketers to charge market-reflective costs for the products in the country.
Before the announcement, companies largely relied on regulated fuel prices announced by the Nigerian National Petroleum Company (NNPC) Limited.
The policy aligns with the oil companies’ push for the removal of fuel subsidies in Nigeria.
Following the president’s announcement, the pump price of Premium Motor Spirit (PMS) also known as petrol increased from N189 per litre during the subsidy era to over N500.
It marks the beginning of a new era for Nigeria where fuel has been subsidised since the 1970s and ushered in improvement in oil firms’ revenue and growth prospects.
Between May 29, when Tinubu announced his plan to reform the oil sector and June 5, companies listed in the capital market have made a whopping N40.53 billion, according to Ripples Nigeria market analysis.
The breakdown of companies and their benefits:
Conoil shareholders saw a 60.27 percent growth in their investments during the period as demand for the firm’s stock pushed up the equity price from N47.95 kobo to N76.85 kobo.
This handed the investors a N20.05 billion gain and raised the company’s market valuation from N33.27 billion to N53.33 billion.
Shareholders in Eterna pocketed N4.10 billion after their investments grew by 45 percent following Tinubu’s announcement of a reform in the oil sector.
In the same vein, Eterna’s market capitalization increased from N9.12 billion to N13.23 billion on the back of strong demands which pushed up the firm’s share price from N7 to N10.15 kobo.
MRS investors witnessed 32.8 percent growth in their investments in the company.
This represented a N4.59 billion gain for MRS investors and lifted the company’s valuation in the stock market from N13.98 billion to N18.58 billion.
Total shareholders recorded an 11.7 percent increase in their investments following a N9.94 billion gain by the company.
Ripples Nigeria gathered that Total also benefited from the surge in demand for oil shares with its equity capitalization rising from N84.54 billion to N94.48 billion.
This followed the growth in its share price from N249 kobo to N278.3 kobo per share due to increased demand.
Ardova shares were also sought after by investors in the capital market and this pushed up the price from N17.35 kobo to N17.8 kobo.
Consequently, shareholders in Ardova earned about N586.11 million due to the demand for the firm’s shares.
Ardova’s market valuation also appreciated by 2.59 percent from N22.59 billion to N23.18 billion.
However, Ardova is on its way out of the stock market after the majority investor, Ignite Investments, offered to buy out the minority shareholders in the firm.
Oando, a company that is also seeking to exit the stock market, recorded a 1.78 percent rise in share price from N5.6 kobo to N5.9 kobo during the period.
The increase in Oando’s share price handed investors a N1.24 billion gain and raised the company’s market capitalization from N69.61 billion to N70.85 billion.
Seplat on its part traded flat at N1200 with a market valuation of N706.13 billion.
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