Analyses of investor sentiment and other factors point to the price of Nigeria-based online marketplace Jumia Technologies soaring through 2021 and beyond, London Loves Business reported.
The price of Jumia’s American Depository Receipt (ADR) at the close of trading on Jan. 3, 2020, was $6.51. On Dec. 31, 2020, Jumia’s ADR closed at $40.35. At the close of business Thursday (Feb. 4, 2021) it closed at $64.24.
ADRs are equity securities that let U.S. investors trade easily in foreign companies.
London Loves Business pointed to several factors analysts have cited for Jumia’s surge. One reason is that mobile internet adoption in parts of Africa stands to double over the next few years. Should this trend come to fruition, Jumia’s user base would likely expand.
Moreover, according to analysts cited by London Loves Business, internet penetration — and with it, business opportunities for Jumia — stands to increase dramatically in Africa over the coming years. The increase is likely to be especially significant in countries where Jumia is the strongest, according to the report.
Finally, for vast unbanked populations in Africa, the Jumia Pay digital wallet option could offer new ways to use the online marketplace, the report stated.
Investment website The Motley Fool speculated Jumia’s price may be soaring in part because of the performance of a food delivery service the company operates.
A Motley Fool writer wrote this month that a big reason for the rise of Jumia’s stock price could be that during 2020, the company became more of a logistics business — and less of a retail business. The writer noted that an advantage to being in logistics rather than in retail is the greater ease of scaling a logistics company.
Jumia Chairwoman and Head of Institutional Affairs Juliet Anammah, in an interview with PYMNTS in spring 2020, listed another factor in Jumia’s long-term favor: human nature.
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