Conoil Plc, one of the petroleum marketing companies listed on the Nigerian Stock Exchange, has concluded plans to invest $50m in the expansion of its operations across the West African sub-region.
A competent source within the company said the investment was initiated to enable the company build new retail outlets across the West African sub-region, to enhance its earning and return to shareholders and the information has been made available to stockbrokers at the NSE.
The stock market, according to analysts, is already responding to the new development, as investors are already cashing in on the expected favourable returns from the company‘s investment in the West African oil marketing industry.
For instance, the equity for the second day running this week, emerged as one of the highest price gainers, as it added N1.1 to close at N40.10 per share at the end of trading on Wednesday. The equity had earlier recorded a growth of N1.90, up by the maximum five points, on Tuesday to close at N39.00 per share.
Stock analysts explained that the current fortune of Conoil‘s stocks in the market is not unconnected with the $50m investment drive by the company to establish mega retail outlets in the West African sub-region in a bid to extend its business portfolio and create a platform to diversify its earnings.
“The market is responding to stocks that show the fundamentals for good returns and Conoil is one of them,” a stock broker, Mr. Peter Aletor said, adding, ”Investors are still trying to digest the package and I can assure you, by time the full import of the offshore investment drive dawns, more investors will strive to take a position.”
”Investors‘ renewed confidence in the equity is only natural considering the company‘s pedigree as an organisation with a consistent dividend policy,” another broker said. According to a report form the company, Conoil was targeting West African countries where the downstream petroleum sector is fully deregulated.
The company, the report added, has earmarked about $50m (about N7.5 bn) for the offshore retail expansion project, where it plans to construct at least five mega stations each in Ghana and Togo under the first phase of the expansion programme