Caverton share price records major setback, sheds N3.77 in one day

The one-week-old listed company on the Nigerian Stock Exchange (NSE), Caverton Offshore Support Group Plc, on Tuesday suffered a major setback by shedding 39.68 per cent of its market value.

Investigations by the News Agency of Nigeria (NAN) at the close of trading showed that the company quoted at N9.50 per share lost N3.77 to close at N5.73 per share.

The oil exploration support company’s market capitalisation which earlier stood at N31.8 billion on May 20, when it was listed, dipped to N19.19 billion or a decrease of N12.61 billion.

Caverton had earlier made history by becoming the first Nigerian oil servicing company to go public with the listing of 3.35 billion shares of 50k at N9.50 per share.

Reacting on the Caverton share price depreciation, Mr Sehinde Adenagbe, Managing Director, Standard Union Securities Ltd, attributed it to overpricing of the stock.

Adenagbe said that the company was reacting to the reality of the market, stressing that, “investors invest where they are sure of product acceptability”.

He said that the company was yet to release any corporate action, adding that the trend might be reversed when the company releases its first quarter result.

Mr Adebayo Adeleke, Secretary, Independent Shareholders Association of Nigeria, said that the company was passing through a common experience.

Adeleke said that the share would find its level in the market place and swing to the tune of demand and supply.

The company for the financial year ended Dec.31, 2013 posted a turnover of N18.66 billion, against the N16.13 billion declared in the comparative period of 2012.

Its profit stood at N1.88 billion compared with the N1.36 billion achieved in 2012.

Total assets also stood at N39.31 billion, in contrast with the N38 billion recorded in 2012.

Caverton is one of Nigeria’s oil servicing companies providing support services to a range of multinational companies across aviation and marine services.(NAN)