Economy
Worry as Forte Oil Loses 40.26% Barely a Month After Otedola’s Exit
By Dipo Olowookere
The continued dwindling in the fortunes of shares of a once vibrant energy company, Forte Oil Plc, is giving its holders something to seriously worry about.
Last month, billionaire Nigerian businessman, Mr Femi Otedola, announced his exit from the firm after offloading his 75 percent stake to focus on another business venture, Geregu Power.
After his exit from the firm, there was a change in almost the entire management team of Forte Oil.
The oil and gas mogul, while he was announcing his departure from the company, had wished the new owners well, challenging them to take the firm to enviable heights.
“A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders.
“In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc.
But since this announcement on Wednesday, June 19, 2019, Business Post observed that Forte Oil shares have lost 40.26 percent at the stock market.
When Mr Otedola left Forte Oil last month, shares of the company were traded at the nation’s stock exchange at N34.65k per unit.
However, at the close of business on Friday, July 12, 2019, they were transacted at N20.70k each, indicating a decline of 40.26 percent or N13.95k.
This huge fall in less than a month is already making some shareholders of the firm to begin to doubt the future of the company.
They wondered why things have been on a free-fall since the departure of Mr Otedola, with insinuations that the businessman might have seen this coming and decided to speak to his legs.
But at the weekend, a source at Forte Oil informed Business Post that though the management and board of the company are greatly concerned by the performance of the firm at the stock market, they are working tirelessly to ensure things change for the better.
“Don’t think the board and management are doing nothing to make things better because this is their main agenda for now. You will begin to see positive changes.
“Remember, they just came on board and they need time to settle down. I can assure you that Forte Oil will bounce back,” the source, who profusely begged not to be named, told Business Post.
Recall that after taking over as the new Managing Director and Chief Executive Officer of Forte Oil Plc, Mr Olu Adeosun, urged shareholders of the energy firm not to offload their shares because better days were staring at them.
He gave this assurance while addressing newsmen in Lagos, saying the new owners of the company have big plans for the company and its shareholders.
According to him, “Our desire for our shareholders is the same as for our customers. We don’t want anyone to go. We want our shareholders to hold on to their shares because we believe, as a long term company, there is better value in the long term and we will return dividends to them.”
He had stressed that the new team plans to consolidate the achievements of the previous management and take advantage of the combined assets at its disposal to improve stakeholders’ wealth and ensures best quality service delivery to its numerous, boasting that Forte Oil Plc will be one of the best things to have happened in this country.
“This is because of the symbiotic strength we are bringing to the sector. It is a very complementary process. The core investors have a wide experience and strength in the upstream with massive exposure to the international trading market; they have a deep trading line with their bankers. They are bulk traders and they are bringing in products.
“Forte Oil has the third largest retail outlets in Nigeria. We are not buying from intermediaries again but we are buying directly from the bulk traders where other intermediaries are buying from.
“We will enjoy the benefits of economies of scale; we will enjoy the benefits of credit and also enjoy the benefits of the diversity of assets that Prudent Energy is bringing to the party,” he had told journalists last month.
Also recall that after its acquisition of Forte Oil, Chairman of Ignite and Chief Executive of Prudent Energy Services Limited, Mr Abdulwasiu Sowami, had said the investment was a of “strategic importance to support our quest of continuously adding value to the Nigerian oil and gas industry.”
According to him, “The next phase of Forte Oil’s growth will focus on increasing volumes, diversifying business operations, widening distribution networks and extracting potential synergies with partners. We look forward to working as part of the Forte Oil family to achieve this growth.”
By Adedapo Adesanya
Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.
In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.
During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.
It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.
There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc also finished the session as the most active stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.
By Dipo Olowookere
The bullish run on the Nigerian Exchange (NGX) Limited continued on Friday with a further 1.00 per cent growth buoyed by gains recorded by Guinness Nigeria, Champion Breweries, and others.
Data showed that the consumer goods space expanded by 1.53 per cent during the last trading session of the week, as the insurance counter grew by 0.51 per cent, and the industrial goods sector marginally gained 0.01 per cent.
However, the banking index depreciated by 0.54 per cent due to a pocket of profit-taking, and the energy industry shrank by 0.09 per cent, while the commodity sector closed flat.
Guinness Nigeria gained 10.00 per cent to trade at N217.80, Morison Industries rose by 9.84 per cent to N4.69, Champion Breweries jumped by 9.69 per cent to N14.15, Austin Laz grew by 9.66 per cent to N2.27, and C&I Leasing appreciated by 9.62 per cent to N5.70.
Conversely, eTranzact lost 10.00 per cent to finish at N12.60, Chellarams slumped by 9.00 per cent to N13.20, Eunisell depleted by 9.89 per cent to N75.15, Africa Prudential moderated by 9.77 per cent to N12.00, and DAAR Communications decreased by 9.18 per cent to 89 Kobo.
The busiest stock on Friday was Access Holdings with 107.6 million units sold for N2.2 billion, Consolidated Hallmark traded 59.9 million units worth N245.8 million, Zenith Bank transacted 48.2 million units valued at N3.1 billion, Transcorp Power transacted 42.8 million units for N13.1 billion, and Champion Breweries exchanged 36.4 million units valued at N510.2 million.
At the close of business, a total of 602.8 million units worth N30.7 billion exchanged hands in 20,550 deals yesterday, in contrast to the 529.7 million units valued at N12.3 billion traded in 18,159 deals on Thursday, representing a surge in the trading volume, value, and number of deals by 13.80 per cent, 149.59 per cent, and 13.17 per cent apiece.
Business Post reports that the All-Share Index (ASI) soared during the session by 1,485.89 points to 149,436.48 points from 147,950.59 points and the market capitalisation moved up by N945 billion to N95.264 trillion from N94.319 trillion.
By Adedapo Adesanya
An intervention of the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market eased the pressure on the Naira on Friday.
The apex bank sold forex to banks and other authorised dealers in the official window to defend the domestic currency, helping to calm the FX demand pressure, with the Nigerian currency appreciating against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.11 per cent or N1.57 to sell at N1,454.50/$1 compared with Thursday’s closing price of N1,456.07/$1.
Also, the domestic currency improved its value against the Pound Sterling in the official market yesterday by N3.95 to close at N1,946.15/£1 versus the previous day’s N1,950.11/£1 but lost 10 Kobo on the Euro to quote at N1,706.46/€1 compared with the N1,706.36/€1 it was exchanged a day earlier.
At the black market segment, the Nigerian Naira maintained stability against the Dollar during the session at N1,470/$1 and also traded flat at N1,463/$1 at the GTBank forex counter.
Despite the sigh of relief, demand pressures outweighed the robust supply from the CBN and inflow from offshore players looking to participate at the OMO bills auction.
Gross FX reserves increased for the twenty fifth consecutive week, growing by a strong $396.84 million week-on-week to $45.44 billion.
As for the cryptocurrency market, it was down on Friday as pressure remained after Federal Reserve chair Jerome Powell’s speech on Wednesday, which hinted at a possible rate cut pause in January. As a result, markets now expect only two rate cuts in 2026 instead of three.
However, Chicago Federal Reserve President Austan Goolsbee, who was against a December rate cut, said he expects more in 2026 than the current median projection.
Ethereum (ETH) slumped by 5.1 per cent to $3,090.61, Solana (SOL) declined by 4.5 per cent to $132.79, Cardano (ADA) depreciated by 3.8 per cent to $0.4103, and Dogecoin (DOGE) dropped 2.5 per cent to trade at $0.1373.
In addition, Bitcoin (BTC) lost 2.4 per cent to sell at $90,342.74, Litecoin (LTC) tumbled by 1.9 per cent to $81.86, Binance Coin (BNB) fell by 0.6 per cent to $886.93, and Ripple (XRP) slipped by 0.5 per cent to $2.02, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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