In apparent show of confidence, some foreign investors have bought 2.3 per cent stake in Dangote Cement Plc for N86.1 billion ($236 million). The sale involved 416 million shares that was consummated in six off market deals on the Nigerian Stock Exchange (NSE) on Tuesday.
This is the third time foreign investors are buying into Dangote Cement,Â where Africaâ€™s richest man, Aliko Dangote, has a controlling stake.
In 2013, South Africaâ€™s Public Investment Corporation (PIC) bought 1.5 per cent forÂ Â $289.3 million. Similarly, in 2014, Sovereign fund Investment Corp of Dubai (ICD) acquired 1.4 per cent for $300 million.
Although the identity of the new foreign investors who bought 2.3 per cent yesterday could not be ascertained, the news lifted the price of the stock by 7.26Â per centÂ or N16.25Â from N223.75 to N240 per share to record highest price gain in absolute terms.
Reacting to the transaction, a leading stockbroker, Mr. David Adonri, said it is good development for both the company and the NigerianÂ economy.
â€œAs you are aware, Dangote Cement is a multinational entity. ItÂ is capable of eliciting global interest. New foreign investment can be viewed from the perspective that the company is performing very well and that the Nigerian economy is providing it with necessary enabling environment,â€ he said.
Dangote Cement is the largest company on the NSE, accounting for a third of the bourseâ€™s total market capitalisation. The company closed with market capitalisation of N4.089 trillion yesterday.
Dangote Cement Â recently reported a Â Â 24 per cent growth and Â profit before tax for the half year ended June 30, 2017 Â to N155.58 billion.
The company had recorded a profit after tax of N187 billion in 2016 and paid Â a dividend of N8.50 per share. Dangote told shareholders that the companyâ€™sÂ Pan-African diversification has provided cash streams from countries such as Senegal, Cameroon and Zambia, which have providedÂ themÂ with essential foreign currency as foreign exchange controls made it difficult for them to obtain dollars for operations.
â€œFurthermore, we were able to borrow money in these countriesâ€™ local currencies, thus reducing our exposure to foreign currency shortages in Nigeria. In addition, we began to generate foreign currency sales from exports of cement from Nigeria to Ghana,â€ Dangote said.
HeÂ Â noted that the results ofÂ strategic decisions taken years agoÂ enabledÂ Dangote Cement to strengthen itsÂ business and consolidate itsÂ position inÂ 2016Â Â when many others in Nigeria and across the rest of Africa have struggled against economic downturn.