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 Dipo Olowookere
The Nigerian equity market showed no signs of slowing down, as it further appreciated by 1.30 per cent on Friday on the back of sustained buying pressure.
Unlike the preceding sessions, investor sentiment was bullish yesterday after the Nigerian Exchange (NGX) Limited ended with 43 price gainers and 26 price losers, implying a positive market breadth index, the first this week.
UPDC gained 10.00 per cent to close at N4.40, Academy Press also appreciated by 10.00 per cent to quote at N7.70, Haldane McCall improved by 9.97 per cent to N3.97, Zichis soared by 9.94 per cent to N15.60, and Wema Bank added 9.84 per cent to settle at N31.25.
Conversely, Meyer lost 9.92 per cent to sell for N16.80, Trans-Nationwide Express also crashed by 9.92 per cent to end at N7.90, C&I Leasing slipped by 8.53 per cent to N5.90, Omatek dipped by 7.34 per cent to N2.02, and eTranzact decreased by 5.28 per cent to N17.05.
When the bourse closed its doors to business, the All-Share Index (ASI) rose by 2,884.81 points to 225,722.49 points from 222,837.68 points, and the market capitalisation grew by N1.858 trillion to N145.335 trillion from N143.477 trillion.
A look at the activity chart showed that market participants transacted 627.6 million shares worth N44.5 billion in 55,232 deals during the trading day compared with the 667.9 million shares valued at N38.1 billion traded in 53,062 deals a day earlier.
This indicated that the volume of transactions went down by 6.03 per cent, the value of trades went up by 16.80 per cent, and the number of deals jumped by 4.09 per cent.
Access Holdings closed the session as investors’ toast, with a turnover of 75.6 million units worth N2.4 billion. UBA transacted 43.1 million units valued at N2.3 billion, Wema Bank exchanged 41.5 million units for N1.3 billion, Zenith Bank traded 38.4 million units valued at N5.2 billion, and Universal Insurance sold 29.5 million units for N35.9 million.
By Aduragbemi Omiyale
Mr Taiwo Oyedele has set some goals he intends to achieve as Nigeria’s Minister of Finance and Coordinating Minister of the Economy.
While taking over from his predecessor, Mr Wale Edun, on Thursday, the tax expert assured that he has no plans to overturn some of the reforms already put in place by the former occupier of the seat.
In a message on Friday, he emphasised that, “Our immediate task is to consolidate these gains, deepen ongoing reforms, and ensure they translate into tangible benefits for all Nigerians.”
He promised to ensure fiscal discipline by embracing transparent and prudent management of public resources, while also harmonising revenue administration, broadening the tax base, reducing the burden on the vulnerable population, and supporting economic growth.
Mr Oyedele further said his other strategic priorities include creating a predictable and investor-friendly environment anchored on policy coherence, consistency, and clarity; and aligning efforts across all tiers and institutions to maximise policy impact.
He also said efforts would be made to deepen collaboration with the private sector and other key stakeholders for data-driven policy design, co-implementation, and feedback for continuous improvement.
According to him, “Good policy design alone is not enough; success will be defined by execution. We are committed to disciplined implementation, accountability, and measurable results.”
“I look forward to working with colleagues across government, the private sector, and all Nigerians as we move from reform to result, accelerate growth and build a more stable, inclusive, and prosperous economy,” he stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
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