Geregu, United Bank for Africa (UBA) and Transnational Corporation (Transcorp) Plc made the list of companies’ stocks to watch this week, thanks to the activities of Femi Otedola and Tony Elumelu in the stock market.
Femi Otedola, the majority investor in Geregu Power Plc, sold 2.82 million shares last week, to take out N820.67 million from his N694.45 billion investment in the firm.
The reason for the sale is not known, however, it comes at a period Otedola said his N250 billion offer to buy Transnational Corporation (Transcorp) Plc was rejected.
Otedola is also planning on acquiring another power plant through his investment company, Amperion Power Distribution Limited, which holds the indirect shares of the investor in Geregu Power.
Although the sale slightly reduces Otedola’s ownership stake in Geregu to 95.44 per cent from 95.55 per cent, the sale could affect the capital market’s confidence in Geregu, as decisions of majority shareholders are maps minority investors use to guide their actions – so investors need to trade with caution as the capital market resumes this week.
Last week, Tony Elumelu, the Chairman of United Bank for Africa (UBA), acquired additional 70 million shares in the company on Tuesday.
Since reports emerged of his share acquisition, the capital market has renewed its interest in UBA, with high demand raising the company’s share from N7.95 kobo to N8.25 kobo between Tuesday to Friday.
Within four days, the investment value of UBA’s shareholders increased by 4 per cent on the back of Elumelu’s share acquisition.
This placed the company among last week’s gainers, and UBA will resume this week with the same momentum, however, investors need to trade with caution, as profit-takers could milk the gains from the previous week, resulting in losses.
Transnational Corporation (Transcorp) Plc share has recovered from the loss that greets the exit of Femi Otedola in the first week of May.
At the end of trading last week, Transcorp’s share rose by 33.51 per cent, as the capital market ignored Otedola’s bombshell, which revealed why he tried to wrestle control of Transcorp from Tony Elumelu, the firm’s majority shareholder.
While Otedola’s revelation disclosed that he had a win-win plan for Transcorp shareholders, it also showed that Elumelu has a great deal of belief in the firm’s growth prospect, considering a whopping N250 billion offer from Otedola was rejected.
Nevertheless, Transcorp has halted its loss and resumed its bullish run, however, profit-takers could be on the prey, so investors need to trade cautiously following the bullish run.
Culled from ripples Nigeria