A capital market expert has attributed investors renewed interest in petroleum stocks to increase in dividend anticipation and crude oil price rally due to outcome of November OPEC meeting.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Limited, made this known in an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.
Omordion said traders had resorted to downstream oil and gas stock because of strong corporate earnings released by some of the companies and anticipation of better reward for the year ending Dec. 31, 2016.
He said the deal by oil producers to cut output by 1.7 million barrels per day at November OPEC meeting effective 2017 contributed to the price rally of petroleum equities on the nation’s bourse.
Omordion explained that the recent NIPCO acquisition of 60 per cent stake in Mobil Nigeria Plc from its parent company- ExxonMobil contributed to the development.
He said that ongoing negotiation with companies for divestment of Total Nigeria downstream assets from its core investor contributed to the price rally in the sector.
According to him, market’s presumption of low price for Forte oil caused the current increase being experienced by the equity.
He urged market players who were not already in these stocks to be mindful of expected profit taking in no distance time.
“The price appreciation has not only caught the interest of traders but also long-term investors, indicating that this sector might lead the bull transition in 2017,” Omordion said.
Omordion, however, called on the Federal Government and its agencies to do the needful by embracing friendly policies that would save the economy from further decline in the New Year.
NAN reports that Total Nigeria Plc which opened trading on Dec. 5 at N250.76 had recorded a price growth of N53.68, representing 21.41 per cent to close trading on Dec. 6 at N304.44 per share.
Also, Forte Oil increased by N14.04 or 21.51 per cent to close trading on Dec. 6 at N79.30 against the week’s opening price of N65.26. (NAN)
