Eyebrows Raised as Key Investor in UAC Nigeria Sells 40 million Stocks

June 24, 2020
UAC Nigeria UACN

By Dipo Olowookere

News of a major shareholder in UAC of Nigeria Plc selling up to 40 million units of the company’s stocks recently has caused some raised eyebrows.

Some members of the investing community who spoke with Business Post on the matter said trades like this by a key investor of a firm like UAC Nigeria call for concern.

Last Wednesday, June 17, 2020, a “substantial shareholder” in UAC Nigeria, Blakeney LLP, freed its portfolio with 40 million units of the firm’s stocks.

According to a notice from the organisation, the shareholder sold the equities at a unit of N7, amounting to N280 million.

Since the global health crisis, Coronavirus, thickened in Nigeria in March 2020, the consumer goods sector of the economy, which UAC Nigeria also has a presence in, has been greatly hit.

Though the industry boomed in April when governments, corporate bodies, politicians, individuals and others distributed food items as palliatives to Nigerians because of a five-week lockdown imposed in Abuja, Lagos and Ogun States to suppress the spread of the virus, things took a worse turn when the restriction was eased in May.

In June, most businesses were allowed to operate, while citizens were told to use face masks whenever they were in public places.

But the buying power of consumers has made it difficult for the sector to boom like it did in April despite allowing them to go about their normal business activities.

Some firms have had to cut the salaries of workers and in other cases, the staff strength has been reduced, affecting the consumer goods industry, while those in few sectors yet to allowed to operate like the aviation and education sectors have not paid salaries to their employees.

“The volume of the shares sold by Blakeney is substantial and it is expected to make investors want to ask questions,” an active participant in the nation’s stock market, Mr. Adegbite Oloyede, submitted.

For Mrs Modupe Adediran, “Selling 40 million units of your holdings in a company says a lot about some things we retail investors do not know about. So, the worry is expected.”

“This is a normal situation and it is nothing new,” a stockbroker, who asked not to be named, said, but stressed that, “I will just advice investors to keep a close tab on the stock.”

Recall that last month, Business Post reported that Blakeney offloaded 10 million units of UAC Nigeria shares in two separate transactions.

In the first trade, the company sold 6 million stocks at N6.20 each, while for the second tranche, it sold 4 million units at about N6.21 each, raking about N62.0 million from the sales.

UAC Nigeria, a leading diversified company, operates in foods and beverage, real estate, paints and logistics sectors of the economy. Yesterday, the consumer goods index, was the heaviest loser at the market, going down by 1.38 percent.

At the market on Tuesday, June 23, 2020, UAC Nigeria was one of the nine price gainers, appreciating by 5 kobo or 0.71 percent to sell at N7.05 per unit.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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