The share price of Forte Oil Plc (formerly African Petroleum Plc) outperformed all other stocks in the market, recording an unprecedented growth of 1,395 per cent between January and yesterday. While the Nigerian Stock Exchange (NSE) All-Share Index (ASI) has recorded a year-to-date(YTD) growth of 37.39 per cent, Forte Oil soared by 1,395 per cent, a development that has led to calls by some operators for cautious upward movement in the share price.
The stock that is closest to Forte in terms of capital gain is Champion Breweries Plc with 289 per cent. The petroleum products marketing firm had opened the year with a share price of N7.73 and soared to N115.64 Tuesday.
Although some market operators said high demand for the shares due to bright future prospects of the company, has been responsible for the growth, others said given the challenging operating environment, Forte Oil’s full year results might not justify the high share price.
“Investors entering at this point with the hope of reaping fantastic returns at the end of the year should thread cautiously because the share price is already very high,” a stock dealer said.
Forte Oil recently declared profit before tax of N3.2 billion for the nine-month ended September 30, 2013, showing an increase of 258 per cent above N900 million in the corresponding period of 2012.Profit after tax similarly rose by 317 per cent from N700 million to N2.7 billion, while earnings per share rose to N2.54 per share, from N0.61 the previous year.
Group Chief Executive Officer of Forte Oil, Mr. Akin Akinfemiwa, had said the performance “is a testimony of our clear focus on our business transformation initiatives which include solid corporate governance and business ethics, enhanced safety health and environmental practices across all business lines and superior customer service delivery.”
He had assured that the firm remained committed to its mission of building a long-term successful company, boosting investor confidence by creating and sustaining robust returns to shareholders.
Meanwhile, trading at the stock market closed on a positive note as the ASI closed higher at 38,293.59, while market capitalisation N12.234 trillion.