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Nigeria's SEC sets up interim management team for Oando
Oando’s shares are down 9.5 per cent today. This comes as Nigeria's Securities and Exchange Commission announced that it has set up an interim management team to oversee the company and conduct an Extraordinary General meeting to appoint new directors before the 1st of July. Baba Ibrahim, Managing Director of Mainstreet Securities joins CNBC Africa to discuss this and other stories impacting Nigeria's equities market.
Mon, 03 Jun 2019 13:48:04 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Oando's shares plummeted by 9.5% following the SEC's decision to appoint an interim management team and call for new director appointments by July 1st.
- Investor confidence in Oando has been shaken, with the market exhibiting caution and uncertainty regarding the company's future.
- The broader market sentiment has been negatively impacted by Oando's situation, leading to subdued performance across various sectors and a lackluster market momentum.
Nigeria's Securities and Exchange Commission (SEC) has set up an interim management team to oversee the operations of Oando, a major player in the country's equity market. This decision comes as Oando's shares tumbled by 9.5% today, causing ripples of concern among investors and stockbrokers alike. The SEC has also called for an Extraordinary General Meeting to appoint new directors by the 1st of July. The move follows the SEC's request for the CEO, deputy CEO, and certain board members of Oando to resign. Baba Ibrahim, the Managing Director of Main Street Securities, provided insights into this development and its impact on the market.
The market reaction to the news surrounding Oando was a mix of uncertainty and caution. Oando's stock initially remained flat before experiencing a slight uptick later in the trading session. However, investor confidence in the company has been shaken, resulting in the stock hitting a low of 580. The ongoing turbulence surrounding Oando has left many market participants wary and unsure of the company's future. The market sentiment is reflective of the overarching concerns about the stability and governance of Oando amidst the SEC's intervention.
Ibrahim highlighted the significance of the appointment of the interim management team, viewing it as a positive step towards restoring investor confidence. The market response to this development has been relatively optimistic, with stakeholders placing trust in the experience and track record of the appointed individuals. The anticipation of the full composition of the interim management committee has raised hopes of a potential turnaround for Oando. Ibrahim expressed confidence that the market is unlikely to witness further significant declines and expects a rebound in the coming days.
The repercussions of Oando's situation were also felt by other companies in the market, with Seplat Energy Plc experiencing a similar downturn of over 9%. The broader market sentiment has been negatively impacted by the uncertainties surrounding Oando, leading to a lackluster performance across various sectors. The upcoming earnings season is expected to be a key determinant of market movement, with companies like Zenith Bank, GT Bank, and Nigerian Breweries likely to influence market dynamics.
Looking ahead, Ibrahim emphasized the importance of the impending financial results and the ensuing market response. As companies enter their closed periods in preparation for the earnings releases, market participants are positioning themselves for potential opportunities. Despite the prevailing challenges in the global market landscape, Ibrahim remains hopeful for a market recovery post the current volatility. The prevailing economic uncertainties at the international level, from South Africa to China, have also contributed to the cautious outlook in Nigeria's equity market.
In conclusion, while the events surrounding Oando have sparked apprehension and instability in Nigeria's equity market, the appointment of an interim management team signals a proactive approach by the SEC to address governance issues. The market's response to these developments underscores the need for strategic interventions to restore stability and investor confidence. As stakeholders navigate through this period of uncertainty, the upcoming earnings season and global economic trends will play pivotal roles in shaping the trajectory of Nigeria's equity market.
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