Our opinion on the current state of OANDO(OAO)

Oando PLC (OAO) is an oil and gas company with significant operations in Nigeria and listings on both the Johannesburg Stock Exchange (JSE) and the Nigerian Stock Exchange. The company's shares present a high-risk investment profile for several reasons that are intrinsic to its operational context and the nature of its industry.

**1. Commodity Price Volatility:** As an oil and gas company, Oando's financial performance is heavily dependent on the fluctuating international prices of oil. This exposes the company to global market trends and economic cycles over which it has little control.

**2. Political and Economic Instability:** Operating primarily in Nigeria adds another layer of risk due to the country's political instability and economic fluctuations. This environment can affect operations and profitability through changes in regulation, fiscal policies, and other governmental actions that could impact the business.

**3. Thinly Traded Shares:** Oando’s shares are thinly traded, which can result in liquidity issues for investors. This means buying or selling shares without affecting the price can be difficult, potentially complicating entry and exit strategies for private investors.

**Recent Financial Performance:**
- **For the year ending 31st December 2020:** Oando reported a substantial after-tax loss of 141 billion naira, indicating a downturn in business performance with a 17% drop in turnover.
- **For the year ending 1st December 2021:** The company saw a reversal in fortunes, albeit on a much smaller scale, reporting a profit of 34.7 million naira.
- **For the year ending 31st December 2022:** The company returned to a loss, posting an 81.2 million naira deficit.

**Regulatory and Trading Issues:**
- On 3rd April 2024, Oando’s share trading was suspended on the JSE, pending the publication of its year-end results for 2022 and interim results for 2023, reflecting regulatory concerns and potentially significant issues in financial reporting or operational performance.
- Trading remains suspended as of the latest updates, with the share price last recorded at 9 cents.

Given these circumstances, Oando represents a highly speculative investment. The combination of high operational risks, political and economic instability in its primary region of operations, commodity price dependence, and recent financial performance makes it a precarious choice for private investors seeking stable returns.

Investors should exercise extreme caution, considering both the macroeconomic factors affecting the oil and gas sector and the specific challenges facing Oando. It is advisable to closely monitor developments related to the company’s regulatory issues, financial health, and the broader Nigerian political and economic environment before considering an investment in such a volatile entity.