Stock Price of Aradel Holdings drops by N336bn in first trading week of listing

Investors in Aradel Holdings Plc, have seen a loss of N336 billion of their investment in the first trading week of its debut listing on the Nigerian Exchange Limited (NGX).

The company’s stock price depreciated by 11 per cent or N77.30 per share in the first week of trading activities to reduce its market capitalization from N3.05 trillion it was listed by introduction on NGX to close to N2.72 trillion on Friday.

As gathered by WESTERN POST, the company that was listed at N702.70per share joined the top three losers on the Exchange when its stock price dropped by 11 per cent to close at N625.40 per share.

The stock price reached a peak of N820 per share the following day it was listed on Exchange over surge investors demand.

However, the momentum shifted on the third day as investors began selling off their shares. Aradel Holdings’ stock price dropped sharply, closing at N772per share, down from N820 per share at the start of the day’s trading.

The Exchange had announced the listing of Aradel Holdings’s 4,344,844,360 ordinary shares of 50 kobo each at N702.69 per share on its main board.

The listing marked a major milestone in the oil and gas sector’s participation in Nigeria’s stock market.

The sharp decline in Aradel Holdings’ stock price has raised concerns among investors, highlighting cautious sentiment in the market.

Capital market analysts have pointed out that while Aradel Holdings’s listing initially brought excitement, the decline in share price underscores the importance of investor caution trading.

The Vice President, Highcap Securities Limited, Mr. David Adnori said the development reflects an increase in the number of shares due to the share split, stressing that the company is undergoing share correction on NGX.

He stated that the split has provided shareholders with additional shares, allowing them to realize profits.

“At the new price level, many shareholders are taking profits. Additionally, it seems the stock may have been overpriced by the market or management, having been listed at N702.00 per share.

“The rally over the two days was expected before today’s correction. However, this doesn’t change the company’s strong fundamentals.

He added that, “Aradel Holdings maintains impressive corporate governance, and the market is looking forward to the company’s third-quarter results. There’s a strong possibility of an interim dividend, depending on management’s decisions.”