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
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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