By Nkiruka Nnorom
There seems to be fresh controversy over the takeover of Oando Plc following disagreements amongst investment experts over yesterday’s appreciation in the share price of the company on the Nigerian Stock Exchange, NSE.
At the end of trading yesterday, the shares rose by 5.26 per cent to close at N4.00 after investors crossed 6.2 million shares in 191 deals.
The shares had gone down by 9.52 per cent a day after the Securities and Exchange Commission, SEC, released the findings from the Deloite & Touche’s Report on alleged corporate governance breaches by the company and ordered its take-over by an interim management team.
Commenting on the development in the share price of the company, Charles Fakrogha, Chief Relationship Officer and stockbroker with Foresight Securities & Investment Limited, said the buy pressure that followed a court order restraining SEC’s action clearly demonstrates the confidence reposed in the management of the company by investors.
“You see court order restraining SEC from enforcing its sanctions; the matter is in court. You can also see shareholders reaction that they didn’t give Tinubu fair hearing, at least we can say that shareholders are in support. What we have is a bit of vote of confidence on the management, that is why the shares went up, in my own opinion,” Fakrogha said.
However, Mr. David Adonri, Managing Director/CEO, Highcap Securities, opined that the positive movement seen in the shares was artificial, saying that the reverse should have been the case.
He stated: “When you see this kind of movement in the market, you know it is the handiwork of some people trying to defend the stock to prevent it from collapsing. It is unnatural because the information that is available should lead to movement in an opposite direction, but when you see a positive reaction to a negative occurrence, you know that some interests are trying to defend that stock. They are making an artificial demand just to boost the price. So, what is happening is artificial; it is not real.”
Also commenting, Johnson Chukwu, Managing Director/CEO, Cowry Asset Management, said: “there is no reason why the shares should go up; those buying the shares do not have an understanding of the market.”