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
Seven price gainers flipped recent declines at the NASD Over-the-Counter (OTC) Securities Exchange, raising the alternative stock market by 2.19 per cent on Friday.
According to data, the market capitalisation added N51.24 billion to end N2.389 trillion compared with the previous day’s N2.338 trillion, while the NASD Unlisted Security Index (NSI) climbed 85.65 points to close at 3,994.32 points, in contrast to the 3,908.67 points it ended a day earlier.
Business Post reports that the advancers were led by MRS Oil Plc, which improved its value by N13.00 to N200.00 per share from N187.00 per share, FrieslandCampina Wamco Nigeria Plc gained N7.40 to settle at N91.55 per unit versus the previous day’s N84.15 per unit, Central Securities Clearing System (CSCS) Plc appreciated by N6.08 to N71.00 per share from N64.92 per share, Afriland Properties Plc added 66 Kobo to finish at N17.17 per unit versus N16.51 per unit, IPWA Plc rose 37 Kobo to N4.15 per share from N3.78 per share, First Trust Mortgage Bank Plc grew by 11 Kobo to N1.20 per unit from N1.09 per unit, and Food Concepts Plc went up by 10obo to N3.70 per share from N3.60 per share.
On the flip side, there were two price losers led by Geo-Fluids Plc, which depreciated by 28 Kobo to N3.32 per unit from N3.60 per unit, and Industrial and General Insurance (IGI) Plc dropped 5 Kobo to sell at 45 Kobo per share from 50 Kobo per share.
Yesterday, the volume of trades went down by 92.0 per cent to 3.7 million units from 45.8 million units, the value of transactions fell by 59.4 per cent to N84.5 million from N208.2 million, while the number of deals went up by 7.7 per cent to 42 deals from 39 deals.
CSCS Plc remained the most traded stock by value (year-to-date) with 32.6 million units exchanged for N1.9 billion, trailed by Geo-Fluids Plc with 119.6 million units valued at N470.3 million, and Resourcery Plc with 1.05 billion units traded at N408.6 million.
Resourcery Plc closed the day as the most traded stock by volume (year-to-date) with 1.05 billion units sold for N408.7 million, followed by Geo-Fluids Plc with 119.6 million units worth N470.3 million, and CSCS Plc with 32.6 million units worth N1.9 billion.
By Adedapo Adesanya
The Naira weakened further against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, February 20, by N4.97 or 0.37 per cent to N1,346.32/$1 from the N1,341.35/$1 it was transacted on Thursday.
Heightened FX demand tilted the market toward the downside yesterday, exerting upward pressure on rates despite efforts by the Central Bank of Nigeria (CBN) to stabilise the foreign exchange market.
Also in the official market, the domestic currency depreciated against the Pound Sterling during the session by N9.39 to sell for N1,815.25/£1 versus the previous day’s N1,805.86/£1, and lost N7.33 against the Euro to close at N1,584.62/€1 compared with the preceding session’s N1,577.29/€1.
The story was not different for the Nigerian Naira at the GTBank FX desk, where it depleted against the Dollar by N7 on Friday to quote at N1,356/$1 versus the N1,349/$1 it was sold a day earlier, but remained unchanged in the black market at N1,370/$1.
It was observed that risky sentiment among Foreign Portfolio Investors (FPIs) contributed to the FX market, amid fears of hot money flight due to capital gains tax and other factors.
As for the cryptocurrency market, it was mostly green yesterday in reaction to a Supreme Court verdict dismissing a fresh 10 per cent global levy by President Donald Trump.
The apex court on Friday described Mr Trump’s global tariff rollout as illegal. The decision did not clarify what should happen to tariff revenue already collected, and it doesn’t necessarily spell the end of the trade agenda, with multiple legal and executive avenues still available.
Litecoin (LTC) grew 2.7 per cent to $55.00, Cardano (ADA) appreciated 2.6 per cent to trade at $0.2815, Binance Coin (BNB) expanded by 2.6 per cent to $627.19, Dogecoin (DOGE) recouped 1.3 per cent to quote at $0.1, Ripple (XRP) jumped 0.7 per cent to $1.43, Solana (SOL) improved by 0.5 per cent to $84.15, and Ethereum (ETH) soared 0.1 per cent to $1,962.78.
However, Bitcoin (BTC) lost 0.2 per cent to sell for $67,850.49, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Dipo Olowookere
A further 0.99 per cent was gained by the Nigerian Exchange (NGX) Limited on Friday after a positive market breadth index supported by 53 price gainers, which outweighed 23 price losers, representing bullish investor sentiment.
During the trading day, the trio of Jaiz Bank, Fidson, and NPF Microfinance Bank chalked up 10.00 per cent each to sell for N11.00, N86.90, and N6.27, respectively, while Deap Capital appreciated by 9.96 per cent to N7.62, and Mutual Benefits increased by 9.94 per cent to N5.42.
Conversely, Secure Electronic Technology shed 10.00 per cent to trade at N1.62, Sovereign Trust Insurance slipped by 9.73 per cent to N2.32, Ellah Lakes declined by 7.91 per cent to N12.80, International Energy Insurance retreated by 5.56 per cent to N3.40, and ABC Transport moderated by 5.26 per cent to N9.00.
Data from Customs Street revealed that the insurance counter was up by 2.52 per cent, the industrial goods sector grew by 2.28 per cent, the banking space expanded by 1.43 per cent, the consumer goods index gained 1.23 per cent, and the energy industry rose by 0.05 per cent.
As a result, the All-Share Index (ASI) went up by 1,916.20 points to 194,989.77 points from 193,073.57 points, and the market capitalisation moved up by N1.230 trillion to N125.164 trillion from Thursday’s N123.934 trillion.
Yesterday, investors traded 820.5 million stocks valued at N28.3 billion in 63,507 deals compared with the 898.5 million stocks worth N38.5 billion executed in 61,953 deals, showing a jump in the number of deals by 2.51 per cent, and a shortfall in the trading volume and value by 8.68 per cent and 26.49 per cent apiece.
Closing the session as the most active equity was Mutual Benefits with 79.0 million units worth N427.1 million, Zenith Bank traded 44.0 million units valued at N3.8 billion, Chams exchanged 43.9 million units for N182.0 million, AIICO Insurance transacted 42.4 million units valued at N179.8 million, and Veritas Kapital sold 36.0 million units worth N90.6 million.
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