For closing at -13.20 per cent in the first four months of 2025, the Nigerian Exchange Limited (NGX) Oil & Gas Index has maintained its position as the worst performing indicator on the bourse amid the overall stock market growth in the period under review.
Investors’ return on the NGX has appreciated by 2.79 per cent in the first four months of 2025 but NGX Oil & gas index, NGX Insurance Index and NGX Industrial Index have continued to depreciate as investors trade stocks in the sectors with caution.
THISDAY analysis of trading numbers showed that the NGX Insurance Index and NGX Industrial Index dropped by 6.10 per cent and 5.80 per cent in the first four months of 2025, respectively.
With a return of 170 per cent in 2024, the NGX Oil & Gas Index outperformed the NGX Banking Index, NGX Consumer Goods Index, among other indices as the best performing index, attributable to reforms by the federal government.
But the index has been on a downturn over the past few years, recording negative returns to shareholders. For instance, in 2018, the NGX oil and gas declined by 8.61 per cent. This indicates that, on average, investors in this sector experienced a negative return of 8.61 per cent for the year.
Similarly, the sector declined by 14.6 per cent in 2019. Also, in 2020 and 2021, the index recorded a loss of 13.03 per cent and 8.73 per cent, respectively.
However, succour came the way of investors as the sector witnessed a turnaround in performance, achieving a gain of 98.3 per cent in 2023.
Despite posting positive 2024 unaudited result and accounts for period ended December 2024, investors’ negative sentiment have continued to rock the listed Oil & Gas companies.
So far in 2025, the three fundamentals stock in NGX Oil & Gas have seen downward momentum as two appreciated and one trading flat since 2024.
An investigation by THISDAY revealed that Etern Plc, Totalenergies Marketing Nigeria Plc, two listed Oil & Gas companies appreciated in stock price, while Seplat energy Plc has remained flat at N5,700 per share since 2024.
The stock price of Eterna closed April 30, 2025 at N49.95 per share, gaining 106 per cent YtD from N24.30 per share it closed for trading in 2024. On the other hand, Totalenergies Marketing Nigeria moved to N705 per share as of April 30, 2025, up by one per cent when compared to N698 per share it opened for trading in 2025.
On the flipside, MRS Oil Nigeria Plc closed trading April 30, 2025 at N157.50 per share, about 28 per cent decline from N217.80 per share, while the stock price of Oando Plc dropped to N42.05, a decline of 36 per cent from N66 it closed for trading in 2024.
In addition, the stock price of Aradel Holdings Plc fell to N448 per share, a decline of 25.1 per cent from N598 per share, while Conoil Plc closed April 30, 2025 at N331.20 per share, a decline of 14.5 per cent from N387.20 per share it opened for trading this year.
Commenting on Aradel Holdings, Investment Banker & Stockbroker, Mr. Tajudeen Olayinka said, “the company’s stock dropped because the entry price or introduction price was fundamentally hurtful. The price of the stock is going through the usual market correction.”
Other analysts linked the performance of the sector in 13.20 per cent YtD to late filing of 2024 result and accounts and declaring dividend payout to investors.
On his part, the Vice President, Highcap Securities Limited, Mr. David Adnori, said, “The Oil & Gas sector was propelled in recent times by Oando. Oando’s stock price appreciated significantly and when Aradel Holdings was listed, the price was very high and it drove the index growth in 2024.
“However, since the beginning of the year, Oando and Aradel Holdings have taken a serious beating. The NGX Oil & Gas Index worst performance has to do with listed companies not with the industry itself. Investors’ confidence around Oando dropped and Aradel Holdings could not sustain the high tempo which it migrated from NASA to NGX,“ he added.
The Managing Director, Globalview Capital Limited, Mr. Aruna Kebira, had attributed the downward movement in the NGX Oil & Gas index to profit-taking in Oando.
He said, “The management of Oando proposed a bonus of one new ordinary share for every 12 existing ordinary shares and other listed companies’ bonuses have a terminal date of 90 days. The management put a bonus for three years, which is to be credited for 36 months. Investors felt the management of Oando was taking them for granted and opted to take profit.”
He added that the poor performance in the NGX Oil & Gas is based on investors’ sentiment that Conoil, among others may declare a dividend that is not commensurate with their 52-week high.
“Investors believed that the dividend they are expecting from listed Oil & Gas companies cannot be commensurate with their prices. So they are exiting ahead of the dividend payout. Investors can exit quietly now when the dividends are not declared,” he said.
Credit: ThisDay
