Economy
Dangote Cement Shares Fall Amid Dispute With BUA Cement
By Dipo Olowookere
The shares of Dangote Cement seem to be suffering heavily on the floor of the Nigerian Stock Exchange (NSE) as a result of the lingering crisis the firm has with one of its main competitors at the market, BUA Cement.
Late last year, BUA Group wrote an open letter to President Muhammadu Buhari, accusing Dangote Cement, owned by Africa’s richest man, Mr Aliko Dangote, of conniving with top government officials of the Ministry of Mines and Steel, including using thugs and agents of the state to ensure that its (BUA Cement) operations in Okpella, Edo State, were disrupted despite a suit pending before a Federal High Court due for hearing on December 5 and 6, 2017.
The Ministry of Mines and Steel is headed by a former Governor of Ekiti State, Mr Kayode Fayemi.
The letter, titled ‘A Cry for Help: Wanton Abuse of Power by a serving Minister geared towards sabotaging operations of BUA Cement,’ was dated December 4, 2017.
Executive Chairman/CEO of BUA Group, Mr Abdulsamad Rabiu, had urged the President to urgently intervene and investigate what it called the acts of sabotage against BUA Cement operations by Dangote Group.
He had stressed that, “The actions of Dangote Group with the collusion and connivance of highly placed officials of government especially the Minister is directed towards destroying the business of BUA cement with the ultimate goal of creating a monopoly in the cement industry in Nigeria and control the entire cement industry and market in the country.
“This with due respect should not be allowed in a democracy and a free market. Allowing such eventual monopoly is not only inimical to the growth of the cement industry and its attendant effect on the cost of construction and housing delivery to the mass of Nigerians, but also the economic wellbeing of the nation as a whole.
“It is worrisome that Dangote Group with all its visibility and international reputation is displaying such utter lack of respect for and trust in the Nigerian Judiciary.”
Days later, Dangote replied BUA Group, accusing the firm of using thugs and security operatives to carry out illegal mining activities on its mines site.
Dangote’s Executive Director, Mr Devakumar Edwin, while reacting at a press conference in Lagos, had said, “It is appalling that BUA Group in the midst of overwhelming facts want the public to believe that Dangote Group is after its business when in actual fact BUA has been the one mining illegally in Dangote Mining Lease and attacking its officials without any justification.
“The crocodile tears being shed by BUA in its cry for help and open letter to the President is most laughable and a total distraction from BUA’s continuous illegal activities within Dangote’s ML 2541 aimed at depleting and exhausting the limestone reserves in order to sabotage Dangote Group’s legitimate investment.”
In order for the crisis not to result into a breakdown of law and order, the Edo State government led by Mr Godwin Obaseki, shut down the disputed site, pending when a peaceful resolution would be reached by the aggrieved parties.
However, Business Post gathered that since the crisis started, the shares of Dangote Cement have been in freefalling mode.
A check by this newspaper showed that the share price of Dangote Cement, which traded at N245.80k per share on December 4, 2017, closed the last trading day of last year, December 29, at N230 per share.
Also, Dangote Cement opened for the first trading day of 2018 last Tuesday at N230 per share, but ended the week, Friday, January 5, 2018, at N223.11k per share.
According to details of the firm fetched by Business Post from the NSE website, Dangote Cement has authorized shares of 20 billion, but as the close of trading activities last Friday, it has an outstanding of 17.04 billion with a market capitalisation of N3.8 trillion.
How long the crisis between both firms would last is not known yet, but investors are getting worried that it might continue to bite hard on Dangote Cement’s shares.
A closer look at the shares of the company this year showed that it lost N7 on the second trading day of 2018 to close at N223 per share, but marginally gained 11k the next day to finish at N223.11k per share, and settled for the week at the same rate after trading flat.
Dangote Cement controls 65 percent of the market share in Nigeria and this was confirmed last year when the firm released its half year financial statements.
“As a result of the slower market, our Nigeria operation sold nearly 6.9Mt of cement, down 21.8 percent on the 8.8Mt sold in the first half of 2016. We estimate our market share to have been about 64.5 percent during the first six months of 2017,” Chief Executive Officer of the company, Mr Onne van der Weijde, had said.
By Adedapo Adesanya
Five stocks kept the NASD Over-the-Counter (OTC) Securities Exchange in the negative territory by 0.14 per cent on Thursday, March 27.
When the alternative stock exchange ended trading activities for the day, the NASD Unlisted Security Index (NSI) was down by 4.70 points to 3,310.51 points from the previous trading day’s 3,315.21 points.
In the same vein, the market capitalisation of the bourse fell further by N2.72 billion at session to settle at N1.912 trillion compared with the preceding day’s N1.914 trillion.
The volume of securities traded at the bourse yesterday rose by 2,272.7 per cent to 712,439 units from the 30,026 units recorded on Wednesday just as the value of securities traded went up by 728.2 per cent to N30.5 million from the N3.7 million quoted at the preceding session, with the number of deals executed at the Thursday session increasing by 253.9 per cent to 46 deals from 13 deals.
Okitipupa Plc lost N16.00 to sell at N240.50 per unit versus Wednesday’s value of N256.50 per unit, Afriland Properties Plc dropped 58 Kobo to trade at N18.92 per share compared with the previous day’s N19.50 per share, FrieslandCampina Wamco Nigeria Plc depreciated by 27 Kobo to N36.73 per unit from N37.00 per unit, Geo-Fluids Plc crashed by 15 Kobo to trade at N2.50 per share versus N2.65 per share and Food Concepts Plc fell by 5 Kobo to N1.30 per unit from N1.35 per unit.
On the flip side, Central Securities Clearing System (CSCS) Plc improved by N1.68 to N25.21 per share from N23.53 per share and Nipco Plc gained 70 Kobo to settle at N200.50 per unit, in contrast to the previous rate of N199.80 per unit.
FrieslandCampina Wamco Nigeria Plc became the most traded stock by value (year-to-date) with 13.7 million units valued at N528.90 million, Impresit Bakolori Plc followed with 533.9 million units worth N520.9 million, and Afriland Properties Plc with 17.8 million units valued at N364.2 million.
However, Impresit Bakolori Plc remained the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million followed by Industrial and General Insurance (IGI) Plc with 70.0 million units worth N23.8 million and Geo-Fluids Plc with 44.0 million units valued at N89.0 million.
By Adedapo Adesanya
The Naira witnessed the fourth straight depreciation this week on Thursday, March 27, losing 0.07 per cent or N1.11 on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) to close at N1,538.91/$1 compared with the previous day’s value of N1,537.80/$1.
The pressure on the local currency came amid claims of speculation in the FX market by the Central Bank of Nigeria (CBN).
However, there are indications that the CBN may intervene in the market soon after the nation’s foreign reserves rose to $38.322 billion on uptick in oil prices.
Equally, the Naira depreciated against the Pound Sterling in the official market by N5.50 to close at N1,990.87/£1 versus Wednesday’s closing price of N1,985.37/£1 and tumbled against the Euro by 47 Kobo to finish at closed N1,659.59/€1, in contrast to midweek’s value of N1,659.12/€1.
At the black market, the exchange rate of the Nigerian currency and it’s American counterpart remained unchanged yesterday at N1,560/$1.
In the cryptocurrency market, there were major red outcomes as the market reacted after two of President Donald Trump’s nominees for future crypto regulation – Paul Atkins expected to run the Securities and Exchnage Commission (SEC) and Jonathan Gould to lead the Office of the Comptroller of the Currency – faced the nomination hearing in the US Senate.
However, there were no proper oversights examined on the governance and growth of the industry.
Dogecoin (DOGE) depreciated by 6.7 per cent to sell at $0.1842, Ethereum (ETH) slumped by 5.2 per cent to $1,922.84, Ripple (XRP) fell by 4.6 per cent to $2.25, and Litecoin (LTC) recorded a 4.3 per cent slide to trade at $89.99.
Further, Cardano (ADA) fell by 3.8 per cent to $0.7114, Solana (SOL) declined by 3.3 per cent to $134.29, and Bitcoin (BTC) lost 1.8 per cent to sell for $85,930.47.
However, Binance Coin (BNB) went up by 0.4 per cent to $632.92, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Adedapo Adesanya
Oil prices closed higher on Thursday, spurred by a tightening of crude supplies along with new US tariffs and their expected effect on the world’s economy.
Brent crude futures gained 24 cents or 0.3 per cent to settle at $74.03 a barrel and the US West Texas Intermediate (WTI) crude futures rose by 27 cents to trade at $69.92 per barrel.
Traders assessed President Donald Trump’s imposition of a new 25 per cent tariff on potential buyers of Venezuelan crude.
Oil is Venezuela’s main export and China, which is already the subject of US tariffs, is the largest buyer.
The 25 per cent tariff to be imposed on buyers of Venezuelan oil will take effect on April 2 and would be combined with any existing tariffs, according to the executive order.
The tariff will expire one year after the country last imported Venezuelan oil, the order said, and would apply to countries that buy the commodity from Venezuela through third parties.
Alongside China, India, Spain, Italy and Cuba are other consumers of Venezuelan oil.
Following this, India’s Reliance Industries which operates the world’s biggest refining complex, will halt Venezuelan oil imports following the tariff announcement.
India moved on Thursday to deny entry to a Tanzanian-flagged tanker carrying Russian crude, signaling that the country is ramping up scrutiny of vessels transporting oil from Russia.
India has become the largest importer of Russian crude, with Russian oil comprising roughly 35 per cent of its total crude imports last year. However, the country has faced increasing pressure due to US and European sanctions targeting Russian oil exports, which have disrupted global shipping routes.
Also, President Trump unveiled his plan on Wednesday to implement 25 per cent tariffs on imported cars and light trucks effective next week, while those on auto parts begin on May 3.
Market analysts do not expect prices to return to the higher levels seen in early 2025 as uncertainty over U.S. policy and the prospect of tariff wars weigh on demand.
Data on US crude inventories on Wednesday showed tighter U.S. supplies, as stockpiles fell by 3.3 million barrels last week.
Meanwhile, the number of Americans filing new applications for unemployment benefits slipped last week.
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