- Gubernatorial: Shares of Otedola’s Company Forte Oil Rises
The stock price of Forte Oil has climbed to almost a month high since the billionaire owner, Femi Otedola, was rumoured to be contesting for Governor of Lagos state, the commercial hub of Nigeria.
The stock rose 10 percent to close at N22 on Wednesday, bringing its total gain since September 12, when the news of Otedola’s political ambition first came to limelight, to 16 percent.
The stock performed better than the industry average of 0.32 percent to emerge as one of the top 3 best-performing stocks for the third consecutive day.
Still, it is hard to attribute the rebound in the company’s stock to fundamental factors as the company has been struggling for a while and net profit has dropped by 75 percent from N333.74 million recorded in H1 2017 to N95.55 million in H1 2018.
“The rally is clearly not driven by fundamentals, so perhaps this is a case of investors cheering the likelihood of Otedola contesting and probably even winning,” a Lagos-based pension fund manager said.
“The company is not doing well, so it’s hard to separate this rally from market sentiments,” the person, who did not want his name in print, added.
Publisher of Ovation, Dele Momodu, tweeted on Tuesday, September 12, that Femi Otedola will be running for Governor of Lagos State, Africa’s sixth largest economy, under the platform of People’s Democratic Party (PDP).
“Lagos 2019 promises to be interesting. PDP offers Femi Otedola governorship ticket,” Momodu tweeted.
Otedola held 1.02 billion shares in Forte Oil as at the end of 2017, valuing his holdings in the company at N22.44 billion, up N3.17 billion from an initial valuation of N19.27 billion as at Sept. 12.