Oil Stocks Deliver Tiny, Negative Return in Nearly 10 Months
Holding listed oil companies’ stock is negative for any equity portfolio construction. Nigeria’s listed oil companies have disappointed their shareholders with unimpressive, negative year-to-date returns.
The oil index has been the worst performer, which has damaged investors’ wealth despite strong market performance.
Every investor who owns shares worth N10 million in these companies will be getting much less, and considering what the amount could have done elsewhere, there is an unquantified loss in relation to time.
The unimpressive oil index performance has been driven by weak sentiment rather than fundamentals, even in the midst of global commodity market uncertainties.
MarketForces Africa gathered that these NGX index underperforming listed oil companies are now under equity analysts’ watch, and there is a mix of buy and sell recommendations across Broadstreet.
Conoil, Oando Plc and Total Plc have broken their shareholders’ value, recording steep price depreciations due to investors jetting out from holding positions.
With about 10 months gone into the year, the maximum return delivered by the oil linked stock is 5.5%, trailing the country’s double digits headline inflation rate at significant distance
Some of the oil stock shareholders have lost more than 45% of the amount invested since the beginning of the year, with notable reasons being thin trading activities and strong shareholding concentration.
Aradel Holdings, Seplat Energy See Small Gains
While the Nigerian Exchange has delivered a 44.74% year-to-date return, the individual market value of the listed oil companies has fallen, except for Seplat Energy and Aradel Holdings.
Trading data from the Nigerian Exchange showed that Seplat Energy shareholders have gained 5.1% since the beginning of the year to date. – With a closing share price of N5,917.20.
Aradel Holdings Plc has gained 5.5% in about 10 months at a closing price of N631 in the stock market. Investors who staked bet on Conoil has lost 45.5% of the investment year to date.
The oil stock went down to N211.10 amidst uncertainties in the global market. After an impressive outing in 2024, Oando Plc has joined top losers in the equities market.
At the share price of N44 in the market, Oando Plc shareholders have lost 21.8% for betting on the energy stock. The stock becomes a casualty of sell-side investors as management fails to gain shareholders’ trust.
In contrast to overall market direction, Total Plc shareholders have lost 8.3% of the amount invested in the oil company since the beginning of the year.
The company’s share price settled at N 640 ahead of earnings release. # Oil Stocks Deliver Tiny, Negative Return in Nearly 10 Months AXA Mansard Jumps by 12% as Investors Bet on Earnings Outlook
