By Dipo Olowookere
C & I Leasing Plc has been downgraded from the medium price stock category to the low price stock level by the Nigerian Stock Exchange (NSE).
The action was announced to stockbrokers by the management of the exchange and the lowering of the company’s stock price group became effective Thursday, October 22, 2020.
In a circular, the NSE explained that the reclassification followed the drop in the equity price of the firm below the N5 price level on June 10, 2020, till the close of business on October 13, 2020.
The stock exchange in Nigeria operates a pricing methodology framework that classifies shares of quoted organisations into three groups; high-priced, medium-priced and low-priced.
These categories are purely based on their market price and according to the rules, securities must have traded for at least four out of the most recent six month period within a stock price group’s specified price band to be classified into the category.
In the case of C & I Leasing, it has remained below the N5 price band for four of the last six months, resulting in the latest development.
“Dealing members are hereby notified of the reclassification of C & I Leasing Plc from the medium-priced stock group to the low-priced stock group, in line with the NSE’s pricing methodology framework.
“Equity securities of quoted companies on the Nigerian Stock Exchange (NSE) are classified into three stock price groups or categories: high-priced, medium-priced and low-priced stocks based on their market price.
“In this regard, securities must have traded for at least four out of the most recent six month period within a stock price group’s specified price band to be classified into the category.
“Accordingly, the review of C & I Leasing Plc stock price trade activity over the most recent six-month period provides the basis for reclassifying the security from the medium-priced stock group to the low-priced stock group.
“This reclassification also necessitates the attendant change in the tick size change from 5 kobo to one kobo in line with Rule 15.29: Pricing Methodology, Rulebook of the exchange, 2015 (dealing members’ rules).
“C & I Leasing Plc stock price dropped below the N5 price level on June 10, 2020, and traded below N5 up till closing of business on October 13, 2020.
“This indicates that C & I Leasing Plc stock price has traded below N5 in the last 6 months. Resultantly, C & I Leasing Plc was reclassified from the medium-priced stock group to the low-priced stock group with effect from October 22, 2020,” the notice seen by Business Post said.
Business Post reports that shares of C&I Leasing closed flat at N4.40 each on the exchange on Thursday. As at press time, it was still flat at N4.40 per unit.
Adedapo Adesanya