Feb. 27 (Bloomberg) -- Oando Plc, a Nigerian energy company, headed for its highest close in more than six weeks as investors bet the lows its shares reached early this month was overdone.
The stock jumped by the daily limit of 5 percent to 21.11 naira as of 12:22 p.m. in Lagos, the commercial capital. A close at this level would be the highest since Jan. 11.
Oando closed at 55 naira a share on May 11 and hovered near its lowest level in five years on Feb. 2 at 16.3 naira, according to data compiled by Bloomberg. The stock has fallen 4 percent this year compared with a 1.7 percent decline in the Nigerian Stock Exchange All-Share Index.
“Its price has fallen too low, compared with where it is coming from,” Emeka Madubuike, managing director of Lagos-based Compass Investments and Securities Limited, said by phone today.
Investors believe its price will rise again because “it is a well-diversified oil marketing company with several income streams,” Madubuike said.
Oando signed a 12-billion naira ($76 million) contract with Royal Dutch Shell Plc’s Nigerian unit, Meka Olowola, a spokesman for the company, said in a statement Feb. 6. Oando will deploy its OES Passion swamp rig, which can drill as much as 25,000 feet, to a Shell field in the Niger River delta for two years, Meka said.
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