Home Business News Oando shares rebound by 5.26% as stock market ends in negative territory

Oando shares rebound by 5.26% as stock market ends in negative territory

-

Oando Plc‘s share price bounced back by 5.26% at the end of the week after a frustrating seven days of trading, ushered in by the corruption and market abuse report of the Securities and Exchange Commission (SEC).

Oando‘s stock rallied back at the same period the Nigerian Stock Exchange ended trading session in negative territory.  The All Share Index closed at 30,432.39 basis points, down 0.31% while the oil and gas company’s share price ended the week with N4.

The company had dropped 9.52% on Monday to clock at N3.80 kobo per share. Oando then struggled to regain form, having lost 18.2% since Friday (May 31, 2019).

Why this matters: The court injunction that forbad Oando’s takeover by an interim management team seems to be finally having an impact on the company’s stock. Recall that the company had obtained the Federal High Court’s injunction preventing SEC‘s interim management from taking over the company. The rebound shows investors confidence is high on Oando‘s survival of the tussle with SEC.

What this means: Investors are no longer pricing the company’s stock low as there was an initial uncertainty around Oando‘s future when SEC moved to take over the management with Police officers shutting the building against the staff of the company.

Why Oando is fighting tooth and nail;

  • Firstly, a criminal charge can be brought against key members of the Board and Management of Oando Plc. Criminal charges in Nigeria are tough to win by prosecutors, but its fallouts are damaging to the accused; win or lose.
  • Secondly, an Interim Board will commence another round of investigation into the operations of the company. Experiences from past board takeovers show interim management hardly have sympathy for immediate past management and often lay on more allegations even when they are unsubstantiated.
  • Also, Oando’s history of complex related party transactions could be in the spotlight and may be spun in a way that is further detrimental to the existing board, their family, partners and friends. This may set the stage for even more legal squabbles.
  • In addition, current contracts, deals including obligations by Oando could come into scrutiny by an interim board, threatening the interest of business partners, customers, suppliers, debtholders, trade creditors etc.
  • Lastly, but certainly not the least, shareholders of Oando could lose their entire investment in the company. Regulatory induced board room takeovers could set off a chain of events that could render the company insolvent, inviting the likes of AMCON to take it over.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Coronation Research

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Popular

Rubies Bank

Rubies Bank – The Future is here

Rubies is a fully digital banking platform, offering zero fee banking targeted at millennials, young professionals, SMEs, quasi-financial institutions and FINTECH companies.
Should Gokada and Max.ng be afraid of ORide?

Should Gokada and Max.ng be afraid of ORide?

ORide is fast penetrating the market by leveraging on the N100 bonus offer to any destination of any distance within Lagos. This move has attracted the competitors’ customers, at least if not for anything, till the promo offer ends. 
Airtel Nigeria

Airtel eyes a £3.6 billion IPO valuation on the LSE and NSE

Airtel Africa Limited has declared its intentions to float his shares simultaneously on the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE)