Guinness Nigeria Plc’s share price fell by 10 percent to N63.00 in trading today recording the biggest percentage price slump in a decade. The Stock’s drop pushes the 14-day Relative Strength Index to 1.1 percent, below level of 30 that signals shares may have been oversold. The stock is down by 37 percent in past 12 months.
According to Analyst at Vetiva Capital, Onyeka Ijeoma, Investors may be taking position based on their expectations for H1 results.
Also an analyst at Renaissance Capital, Adedayo Ayeni, predicted that the H1 results will continue to show weakness in operating profit like in the first quarter. He further noted that Tariff increase on beer and spirits introduced by the government is affecting company’s earnings margin more than competitors.
“Guinness Nigeria does not have the type of brand that can carry it through the cycle” of intense competition in beer market,” Ayeni said.
