Nigerian Stock Exchange downgrades NB’s Stock to Medium-Priced Status

The Nigerian Stock Exchange (NSE) on Tuesday reclassified Nigerian Breweries stock from its special status of high-priced stock to medium-priced stock after the leading brewer’s stock price fell below the required threshold for continuing to be held as a high-priced stock.

In a circular, the Exchange said that a review of Nigerian Breweries price trade activity in the last six months provided the basis for the reclassification of the company’s stock from high-priced to medium-priced.

The NSE classifies quoted companies into three categories, high-priced, medium-priced and low-priced, based on their market price.

High-priced stocks consists of large-cap equities that are priced at N100 per share or above for at least four of the last six months, or new security listings that are priced at N100 or above at the time of listing on the exchange.

Medium-priced stocks are medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the Exchange.

Low-priced stocks are where majority of listed companies fall, consisting of equities that are priced at one kobo per share or above but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the Exchange.

As a medium-priced stock, stockbrokers would need 50,000 shares to move the share price of Nigerian Breweries as against 10,000 shares required for a high-priced stock. Also, the tick size for Nigerian Breweries has changed from 10 kobo to 5.0 kobo, implying that the company’s share price movement will be slower.

Stocks under high-priced group shall have price change with minimum of 10,000 units; stocks under medium-priced group shall have price movement with a minimum of 50,000 units while stocks under low-priced group shall have price change with minimum volume of 100,000 units.

According to the Exchange, Nigerian Breweries’ stock price dropped below the N100 threshold on August 31, 2018 and traded below N100 up till close of business on December 31, 2018. This indicated that Nigerian Breweries’ stock price has traded below N100 in the four out of the last six months.

Other Notable beverage companies that have seen their special pricing status downgraded in the past few years include Guinness Nigeria Plc and Seven-Up Bottling Company. The demoting of a company’s stock from special-pricing status is connected to the overall performance of the company, which is reflected in its stock price.

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