By Dipo Olowookere
The stocks of Vitafoam Nigeria Plc have been reclassified from low price category to the medium price level by the Nigerian Stock Exchange (NSE).
A notice issued by the exchange to stockbrokers today disclosed that the change in the price band of the company’s shares is with effect from Monday, September 14, 2020.
According to the NSE, the reason for upgrading the price category of Vitafoam Nigeria was because the equity value has appreciated above the N5 price band for four months in the last six months at the exchange.
Business Post reports that shares of companies listed on the NSE are classified into three stock price groups of high priced, medium priced, and low priced stocks, according to their market price in line with the NSE’s pricing methodology framework.
Based on the framework, securities of quoted firms must have traded for at least four out of the most recent six month period within a stock price category’s specified price band to be classified into the category.
The exchange said Vitafoam Nigeria Plc stock price appreciated above the N5 price level on Monday, May 4, 2020, and traded above N5 up till closing of business on Monday, September 7, 2020, indicating that the equity value of the foam maker in the country has remained above N5 in four of the last six months.
Based on the pricing methodology of the local bourse, the share price of Vitafoam has been pushed to the medium price level.
“This reclassification also necessitates the attendant change in the tick size change from N0.01 kobo to N0.05 kobo – in line with Rule 15.29: Pricing Methodology, Rulebook of The Exchange, 2015 (Dealing Members’ Rules).
“Resultantly, Vitafoam Nigeria Plc will be reclassified from the low priced stock group to the medium priced stock group with effect from September 14, 2020,” the notice sent to “dealing members” and sighted by Business Post today said.
