NIGERIA – The Nigerian Stock Exchange (NSE) reclassified Nigerian Breweries Plc stock from its previous high-priced stock to medium-priced stock following a fall of the brewer’s stock price below the required High-Priced Stock threshold.
According to Beverage Industry News, NSE issued a circular that the downgrade was as a result of a review it conducted on Nigerian Breweries price trade performance for the past six months.
The bourse classifies quoted companies into three categories, high-priced, medium-priced and low-priced, based on their market price.
NSE’s High-priced stocks consists of large-cap equities that are priced at N100 ($0.28) per share of above for at least for 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 priced at between N5 – N100 per share for at least four of the last six months, or new security listings priced at the same bracket at the time of listing on the Exchange.
On the other hand, low-priced stocks, where majority of listed companies fall, consists of equities that are priced at between 1 kobo to N5 per share within the last four of the last six months, or new security listings priced at the same bracket at the time of listing on the Exchange.
Following the reclassification, stockbrokers would need 50,000 unit shares to move the brewer’s share to a compared to 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.
As per the NSE, stocks under low-priced group shall have price change with minimum volume of 100,000 units for an upgrade.
According to the Exchange, Nigerian Breweries’ stock price dropped below the N100 threshold on August 31, 2018 and trading at this level 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 which have seen their special pricing status downgraded in the past few years include Guinness Nigeria Plc and Seven-Up Bottling Company.
The overall, performance of a company however, plays a key role in its classification in the stock market which is reflected in its stock price.