Dangote cement takes shine off premium stocks in 8 months

By Joy Baba-Yesufu

Shares of largest cement maker, Dangote Cement Plc, Seplat Energy Plc, and Lafarge Africa Plc surpassed other premium stocks in returns for the eight months to August 30.
The NGX Premium companies are Access Holdings Plc, Dangote Cement Plc, FBN Holdings Plc, United Bank for Africa Plc, Lafarge Africa Plc, Zenith Bank Plc, MTNN Plc and Seplat Energy Plc.
Dangote Cement share price at N 532 at the end of the review eight months period grew by 66.3 percent. Likewise, Seplat Energy which stood at N3,730.10 per share as at August 30 rose in eight months by 61.5 percent.
At N 37.60 per share as at August 30, Lafarge Africa rose by 19.4 percent in eight months, underperforming the NGX-ASI which recorded positive return of 29.16 percent as at August 30.
The equities market’s value increased by N14.5trillion in the review period driven by a combination of listings and investors bargain appetite for stocks which pushed market’s value higher.
While the earlier mentioned premium stocks yielded positive returns, investors recorded negative returns in others premium companies like MTNN, Access Holdings, United Bank for Africa, FBN Holdings and Zenith Bank.
MTNN stood at N180 per share as at August 30, representing a decrease by 31.8 percent in eight months. Also, at N19 per share Access Holdings closed the eight months period, its share price decreased by 17.9 percent.
United Bank for Africa share price decreased by 10.5 percent in the review eight months period to N22.95. FBN Holdings share price at N 22.50 decreased by 4.5 percent in eight months. Zenith Bank which closed at N 38.25 as at August 30, was down by 1 percent in the review period.
Nigeria’s equities market decreased by 0.80 percent month-on-month (MoM) in the month of August while investors lost about N33billion as sessions of profit taking in cement makers stocks on the Lagos Bourse outweighed that of bargains.
Dangote Cement (-10 percent) and BUA Cement (-20.46 percent) were major draggers of NGX Industrial Index which closed the month negative (-13.08 percent). The NGX Banking Index rose by 6.52 percent in August, NGX Consumer Goods Index (+4.88 percent), NGX Insurance (+11.67 percent), and NGX Oil & Gas Index (+22.45 percent).
The market’s record negative in the review month was driven by investors who sold mostly industrial stocks like Dangote Cement and BUA Cement despite increased bargain oil & gas, insurance, consumer goods and banking stocks. The market’s positive return as at August 30 stood at 29.16 percent.

Looking ahead to September, we expect the banks’ H1’24 earnings and interim dividend announcements to improve market sentiment. In addition, the Oil and Gas sector is likely to see sustained bullish sentiment, following the positive momentum garnered by Oando’s acquisition and the positive impact of increased petroleum product prices on the earnings of downstream oil and gas players.