By OLUSHOLA BELLO,
Stocks hit a four-month high earlier this week, lifted by gains in Nigeria’s largest indigenous energy conglomerate, Oando PLC, and improved investor sentiment towards the country’s recession-hit economy. The stock market had gained N117 billion by Tuesday this week to extend a bullish eight-day run, while Oando rose by 131%, its highest level in 18 months.
Analysts at Afrinvest Limited said the upbeat performance in the equities market was mainly driven by solid Q1 2017 earnings, as well as the knock-on effect of improved foreign exchange liquidity.
The upturn was significantly impacted by gains recorded in medium and large capitalised stocks. Oando, which remained at the top of the gainers list for five straight days led 33 other gainers on Thursday, including Access Bank, FBN Holdings, Guaranty Trust Bank, Dangote Cement, Nigerian Breweries, Okomu Oil, Zenith Bank and Stanbic IBTC.
Oando’s return to profitability and increase in share price is indicative of the successful implementation of its corporate initiatives focused on Growth across its operations; Deleverage via the divestment of non-performing assets; and Profitability, by focusing on dollar-denominated export earnings.
At the recently concluded Facts Behind the Figures session at the NSE, the ED Business Development, Nigeria Stock Exchange, Haura Jalo-Waziri spoke positively to Oando’s FYE 2016 and Q1 2017 financials; also speaking was Oando PLC’s Group Chief Executive, Wale Tinubu said, “The challenge we faced was the economic and sector downturn, we came clean to the market, created a 5-point plan and successfully delivered on every part of that plan.”
Meanwhile, managing director, Oando Plc yesterday said that the company would seek approval from the Federal Government for the refurbishment of one or two refineries.
The Company’s facts behind the figures at the Nigerian Stock Exchange (NSE) in Lagos, show that refurbishment of the refineries would enable the country to end fuel importation.
Tinubu stated that the company would take advantage of its indigenous status by participating in the Federal Government bid.
He added that militancy was affecting its production in the Niger Delta and that 2016 was also a challenging year for companies due to foreign exchange challenges.
He added that the company contended with problems of liquidity constraints, Naira devaluation and a slump in oil earnings due to low oil prices as well as insurgency in the Niger Delta.
According to him, the company has mapped out strategies to mitigate the foreign exchange challenges, as 90 per cent of its earnings focus will be on dollar, while 10 per cent will be in naira.