Dangote Cement Plc

By Goddy Egene and Eromosele Abiodun

Investors in the Nigerian equities market smiled home last week as the market responded positively to the earnings and dividends declared by some companies. Besides, investors are expecting more earnings and dividends in the days ahead.

The positive run recorded last week was also boosted by the impressive full year, 2015, earnings and dividend declaration of Dangote Cement Plc. While Dangote Cement declared a dividend of N8 per share, Greif Nigeria Plc and African Prudential Registrars Plc recommended 60 kobo and 43 kobo respectively.

The improved result announced by Dangote Cement excited investors leading to strong appreciation of 24 per cent in the company’s share price.
At the close of trades for the week, the NSE All-Share Index (ASI) and market capitalisation appreciated by 6.57 per cent and 6.55 per cent to close the week at 25,820.10 and N8.882 trillion respectively. This is the highest weekly growth the ASI has recorded this year. The gain reduced the year-to-date decline to 9.85 per cent.

Apart from the NSE-Main Board Index, NSE Consumer Goods Index and NSE Oil/Gas Index that depreciated by 0.54 per cent, 1.36 per cent and 6.10 per cent respectively other indices closed higher. But the NSE ASeM Index closed flat.

The previous week, the Nigeria bourse had posted 0.83 per cent loss as negative investors’ sentiment for better part of the week offset the gains from opportunistic buying displayed toward some stocks by the tail end of the week.

Responding to the development in the market, analysts at InvestmentOne Limited had predicted that the market would remain volatile and enjoined investors to tread cautiously and take position in quality name ahead of earning season.

“Given the weak macro environment impacting market performance, we expect the bearish trend to persist in the near term. However, we are cautiously optimistic in the medium to long-term given expectation of a better fiscal management and improved monetary situation. As such, we advise investors to take advantage of the depressed price level to build position in fundamentally-justified stock for medium to long-term investment horizon,” they stated.

However, impressive results by Dangote Cement and others lifted the market beyond the expectations of many stakeholders.

Daily Performance Analysis

The market had commenced on a positive note last Monday ending the day’s session with an impressive gain, following the appreciation recorded in the share prices of Dangote Cement Plc and Ecobank Transnational Incorporated (ETI). The NSE ASI appreciated by 1.41 per cent to close at 24,570.73, compared with an appreciation of 0.77 per cent recorded the previous Friday.

Other gainers on the day were: Mobil Oil Nigeria Plc, Seplat Plc, and FBN Holdings Plc. Similarly, the market capitalisation appreciated by 1.40 per cent to close at N8.45 trillion, compared with the appreciation of 0.77 per cent recorded the previous Friday to close at N8.34 trillion. The total value of stocks traded on the floors of the NSE on the day was N1.49 billion, down by 13.67 per cent from N1.73 billion traded the previous Friday.

The market climbed 1.09 per cent on Tuesday driven by a late appreciation in Dangote Cement Plc (4.99 per cent) which released its 2015 full year results on the day and announced an 800 kobo per share dividend. ETI Plc (4.96 per cent), PZ Cussons Plc (4.98 per cent) and Nigerian Breweries Plc (0.51 per cent) also contributed to the session’s outcome, offsetting Forte Oil Plc (9.75 per cent), Lafarge Africa Plc (3.40 per cent) and Unilever Nigeria Plc (3.45 per cent). The Oil and Gas sector shed 4.39 per cent while all other tickers closed positive. Industrial rose 1.15 per cent while Banking was up 1.10 per cent. The Consumer Goods sector also went up by 0.24 per cent. Market activity was down today as both total volume and value dropped 66 per cent and 26 per cent respectively as investors exchanged 160 million units of shares worth N1.1billion.

On Wednesday, the Nigeria bourse posted a 2.25 per cent gain lifted by positive sentiment in both industrial and banking sector tickers. Both NSE ASI and market capitalisation ended the day at 25,396.83 points and N8.74 trillion respectively. The day’s outcome was influenced by gains recorded in Dangote Cement Plc, Zenith Bank Plc and ETI Plc offsetting losses in Forte Oil Plc, FBN Holdings and Stanbic IBTC Plc. Also contributory to the positive close is the news of African Prudential Registrars Plc’s FY 2015 result with turnover growth of 18.8 per cent and dividend declaration of 43 kobo per share. With 4.16 per cent appreciation, industrial sector led gains in sub-sector indices, followed by Banking (1.88 per cent) and Consumer (0.02 per cent) while Oil and Gas shed 2.37 per cent. Volume and value traded advanced by 72 per cent and 49 per cent respectively.

On Thursday, the market closed positive for the sixth consecutive days in a row supported by sustained positive investors’ sentiment on the stocks of Dangote Cement Plc and key banking stocks. NSE-ASI was up 1.65 per cent to end the day at 25,816.29 points corresponding to market capitalisation of N8.9 trillion. Gains in Dangote Cement Plc, Zenith Bank Plc and UBA Plc drove the positive close in the index, offsetting the bearish sentiment towards Nigerian Breweries Plc, Seven-Up Plc and Seplat Plc. Activity level strengthened modestly with 26 per cent and 39 per cent gain in volume and value traded which closed at N2.26 billion and about 317million units respectively. Sub-sector indices recorded mixed performance as Industrial (2.98 per cent) and Banking (1.7 per cent) closed positive while Consumer (1.14 per cent) and Oil and Gas (0.02 per cent) ended the session negative.

The market gained marginally at the close of trades last Friday as the NSE ASI appreciated marginally by 0.01 per cent. The appreciation recorded in the share prices of NASCON Allied Industries Plc, Guinness Nigeria Plc, Seplat Plc, Zenith Bank Plc, and UBA Plc were mainly responsible for the gain recorded in the Index. Similarly, the market capitalization appreciated marginally by 0.01 per cent to close at N8.882 trillion, compared with the appreciation of 1.65 per cent recorded the prior day to close at N8.880 trillion.

Market Turnover

Meanwhile, investors traded a total of 1.476 billion shares worth N7.992 billion in 15,743 deals, compared with 4.476 billion shares valued at N11.742 billion that exchanged hands the previous week in 14,124 deals.
The Financial Services Industry led the activity chart with 1.319 billion shares valued at N5.590 billion traded in 9,955 deals; thus contributing 89.36 per cent and 69.94 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 50.809 million shares worth N108.297 million in 557 deals. The third place was occupied by the Consumer Goods Industry with a turnover of 49.655 million shares worth N1.376 million in 2,434 deals.

Also traded during the week were a total of 40,021 units of Exchange Traded Products (ETPs) valued at N1.885 million executed in 44 deals, compared with a total of 14,844 units valued at N14.134 million transacted the previous week in 29 deals.

A total of 4,063 units of Federal Government Bonds valued at N4.903 million were traded in 3 deals compared to a total of 4,990 units of Federal Government Bonds valued at N5.799 million transacted the previous week in 2 deals.

Gainers and Losers

In terms of price movement, 35 equities appreciated, higher than 21 equities of the previous week. Twenty-four equities depreciated in price, lower than 35 equities of the previous week, while 130 equities remained unchanged, lower than 134 equities recorded in the previous week.

The top 10 gainers were: Dangote Cement Plc (N33.00), ETI Plc (N2.29), PZ Industries Plc (N2.20), Africa Prudential Registrars Plc (71 kobo), United Capital Plc (39 kobo), Dantote Sugar (41 kobo), Tiger Branded Consumer Plc (40 kobo), Oando (29 kobo), Diamond Bank Plc (17 kobo) and NPF Micro Finance Bank (nine kobo).

Conversely, the top 10 losers included: Forte Oil Plc (N48.77), Conoil Plc (N1.78), International Breweries Plc (N1.35), FBN Holdings Plc (30 kobo), Custodian and Allied, Ikeja Hotel Plc (29 kobo apiece), Airline Services and Logistics Plc (19 kobo),FCMB Plc ( eight kobo), Wema Bank Plc (nine kobo), and Unity Bank Plc (four kobo).