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Exchange downgrades Red Star Express to low-priced stock

Exchange downgrades Red Star Express to low-priced stock

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The Nigerian Stock Exchange (NSE) has reclassified Red Star Express Plc from a medium-priced stock to low-priced stock, underlining the decline in the share price of the logistics company.

The Exchange said the review of Red Star Express stock price trade activity over the most recent six- month period provided the basis for reclassifying the security from the medium priced stock group to the low priced stock group.

Red Star Express’ stock price dropped below the N5 threshold on September 17, 2018 and traded below N5 up till close of business on January 17, 2019. This indicated that Red Star Express stock price has traded below N5 in four out of the last six months. The reclassification took effect from January 28, 2019.

As a low-priced stock, stockbrokers would need 100,000 shares to move the share price of Red Star Express as against 50,000 shares needed for price change as a medium-priced stock. Also, the tick size for the company will change from five kobo to one kobo, implying that the share price will rise slowly going forward.

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

The high-priced stocks consist large-cap equities that are priced at N100 per share or above for at least, four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the Exchange.

The medium-priced stocks consist of 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.

The low-priced stocks, where majority of listed companies fall, consist 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.

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.

 

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