Nigeria’s Seplat Shares Hit More Than 2-Year High In Upbeat Market

Shares in Seplat hit a more than two-year high on Friday after Nigeria’s largest oil and gas company said this week it had recovered lost crude output after force majeure was lifted on the Forcados export terminal.
Seplat shares climbed 10.25 per cent on Friday to N468 ($1.49) per share, a level last seen in March 2015. It was the fourth consecutive day in which the shares had risen sharply.
The main index climbed 0.9 per cent to 33,246 points by 1233 GMT, extending a rally from the 25,000-level in April and crossing the 33,000-mark for the first time since June 2015. Rising oil output has boosted sentiment.
Royal Dutch Shell lifted force majeure on exports of Nigeria’s Forcados crude oil on Wednesday, bringing all of the West African country’s oil exports fully online for the first time in 16 months.
On Wednesday, Seplat said in a statement that the lifting of the force majeure helped it to successfully reinstate gross production at its oil mining licences (OMLs) 4, 38 and 41 to levels last seen before the terminal’s closure.
Traders said the news raised confidence in the company’s ability to improve profitability and drove up the shares.
Nigeria, grappling with its first recession in 25 years on the back of low oil prices and attacks on Niger Delta energy sites, is expected to record increased revenue with the resumption of oil exports through Forcados.
“The prospect for economic recovery is brighter now with all Nigeria’s oil export fully back, while the stock market will also benefit from the expected increase in dollar earnings,” said one trader, who asked not to be named.
Nigerian shares have rallied as more dollars have become available. Officials at the Nigeria Stock Exchange said May data showed signs that offshore investors were starting to return after a fall in their activity in April.
“Going forward, we expect the current bullish theme to dictate sentiments as a flurry of positive developments in the economy continue to spur demand for Nigerian equities,” says United Capital in a research note to clients.
© Reuters News

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