CHI Share Price Offers Entry Opportunity to Investors

The share price of Consolidated Hallmark Insurance (CHI) Plc fell by 27 per cent to 35 kobo per share due to high sell pressure. However, market operators said the new price offers discerning investors a buy opportunity to invest in company that recently raised N500 million to boost its operations.

Despite being a regular dividend paying firm, the share price had stagnated at 50 kobo, which its par value. However, the new pricing methodology of the Nigerian Stock Exchange (NSE), which allows stocks to fell below their par value, made the stock to decline to a record low of 35 kobo last week.

But considering the future prospects of the company, market operators said the new price offers a good entry opportunity to investors.

CHI Plc recently successfully raised N500 million from existing shareholders through a Rights Issue. The right issue was the first time CHI would access the market 10 years after listing on the exchange.

The Group Managing Director of CHI) Plc Mr. Eddie Efekoha, had called on shareholders to take advantage of the offer and continue to enjoy good returns on their investments in the future.

According to him, the insurance firm has been paying dividend regularly over the years and would continue to reward shareholders. He said the company had grown its gross premium from N1 billion to N6 billion and had paid a total of N1.1 billion in dividends.

“As part of five year strategic plan, we need to raise capital. The Rights Issue is being done at a very discounted rate. We are offing it at 50 kobo but valuation has put the worth of shares above that offering price. We are using the offer to say thank you to our existing investors for having remained with for the last 10 years. we need to say thank you by pricing it at par value,” Efekoha had said.

The GMD said the funds would be used invest in opportunities they have identified.

“Apart from other areas, the National Insurance Commission (NAICOM) is considering micro insurance, we believe as a company that has been given licence to do general business, we have equally applied for a licence to do micro life. So for a start, that will be one of ways to apply this money. We are inching to grow our retail business. As part of our strategic plan, there are some businesses that are connected to what we do. We might talk about the life, there is equally health insurance, we are going into that as well,” the MD said.