By Dipo Olowookere
One of the oil companies listed on the Nigerian Stock Exchange (NSE), Eterna Plc, has been reclassified by the regulator.
The firm, which used to be a low-priced stock, has been upgraded to the medium-price category by the stock exchange.
Not too long ago, some companies trading their securities on the exchange were classified into three categories; high-priced, medium-priced and low-priced stocks, based on their market price.
For the high-priced stocks, they are large-cap equities that are priced at N100 per share or above for at least four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the NSE.
However, the medium-priced stocks comprise medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the local bourse.
The low-priced stocks, where majority of listed companies fall, consist of equities that are priced at one kobo per share or above, but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the NSE.
With Eterna being upgraded, it gives company’s shares additional liquidity that will enhance price discovery for the downstream oil and gas firm.
As a medium-priced stock, stockbrokers could move the share price of Eterna with a minimum volume of 50,000 shares as against 100,000 minimum shares required for low-priced stocks.
According to the NSE, Eterna gained above the N5 mark on January 8, 2018 and traded above N5 up till close of business on June 29, 2018, which indicated that Eterna has traded above N5 in at least four out of the last six months and therefore, would be reclassified from low-priced stock to mid-price stock.
