Oando Nigeria Gains as Chapel Hill Starts Coverage: Lagos Mover

Oando Plc, a Nigerian energy company, climbed the most in more than two weeks after Chapel Hill Denham Securities initiated coverage saying that its move into exploration and production may boost earnings.

The company’s shares advanced 3.5 percent to 13.80 naira at 12:53 a.m. in Lagos, the commercial capital. A close at that level would be the biggest gain since Jan. 21, according to data compiled by Bloomberg. Chapel Hill Denham rated the stock a hold with a 12-month target price of 13.85 naira.

“We are positive on the medium-term outlook of Oando,” Ikechukwu Iheanacho and Muhammad Mamman-Daura, analysts at at Lagos-based Chapel Hill Denham, wrote in a note to clients today. “Oando’s strategic move toward increased participation in exploration and production could improve profitability if it is successful, as it would translate to higher group profit.”

Oando received regulatory approval in December for a rights offer to raise 54.6 billion naira ($347 million) to repay a loan used to purchase exploration and production assets and fund acquisitions.

The company’s shares have risen 11.7 percent this year, compared with a 18.8 percent rise in the Nigerian Stock Exchange’s All-Share Index.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.