RIPPLES NIGERIA
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
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.
Eterna
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
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.
