If you have been following Seplat shares since November last year and decided not to buy the stock then you perhaps have missed out on one of the biggest rallies of this never to be forgotten stock market volatility. Seplat began its slide back in October when it became obvious that oil price was beginning on a slippery plunge that will take it to below $50 just weeks later. Seplat shares wasn’t spared as the stock slid from as high as N640 as at October 2 2013 to as low as N265 by the end of 2014. Seplat’s fall was reflection of the dire consequences of a drop in oil prices as the market continued a rout on stocks that will last deep into the new year.
Why the rebound?
In a twist of fate Seplat will begin in rebound towards the end of January 2015 as the stock began a rally that will take it to above N400 for the first time since November 28, 2011. The rally began after the share price dropped to as low as N252 taking it to levels that had never been seen. The share price was so cheap it was trading below its earnings per share at some point which was somewhat of an anomaly. A gradual crawl back of value was to ensue.
However the main rally coincided with news that it was planning to acquire Afren even though the deal fell through last week. Another news that will aid the stock was announcement that it had completed the acquisition of OML 53 from Chevron. Seplat shares closed Wednesday at N414 and by all indications may hold its support at above N400. It is still far from its high of N640 and may not hit that spot anytime soon. Nevertheless this is a comeback story and typifies how volatile this market can be.
