Investors Count Gains in Spite of  Volatile Stock Market


By Goddy Egene

Despite a decline of 17.8 per cent recorded by the Nigerian stock market in 2018, some investors in the market  still recorded gains, THISDAY’s investigation has revealed.

Apart from the Nigerian Stock Exchange (NSE) All-Share Index (ASI) that fell by 17.8 per cent, all other indices also depreciated with many underperforming the NSE ASI.

But THISDAY gathered that amidst the rampaging bears, some stocks still delivered significant positive returns to investors last year.  

For instance, Cement Company of Northern Nigeria (CCNN) Plc, which is a member of BUA Group, led the stocks that put smiles on the faces of its investors.

The stock, it was learnt, appreciated by 104.2 per cent.

It was closely followed by Unity Bank Plc, which gained 101.8 per cent.

Sterling Bank Plc also appreciated by 75.9 per cent, while NEM Insurance Plc gained 62.6 per cent, just as Learn Africa Plc chalked up 54.5 per cent.

Caverton Offshore Services Group Plc closed the year at 48.8 per cent higher, while Vitafoam Nigeria Plc and Diamond Bank Plc fetched investors 46.6 per cent and 45.3 per cent, respectively.

In the same vein, Custodian Investment Plc gained 45.2 per cent while C & I Leasing Plc amassed 37.9 per cent gain.

Continental Reinsurance Plc garnered 36.4 per cent, while Fidson Healthcare Plc, Beta Glass Plc and Newrest ASL Nigeria Plc gained 33.7 per cent, 33.1 per cent and 32.7 per cent, respectively.

Market analysts said the jump in the share price of CCNN last year was justified given the high demand the stock enjoyed due partly to its merger with Kalambaina Cement Company.

The merger was said to be the  largest deal in the market in 2018.

Speaking on the merger, Founder/Executive Chairman of BUA Group, Abdul Samad Rabiu, who is also the Chairman of CCNN, said the expanded CCNN would remain the market leader in its regional market of North-west Nigeria, which is the third largest market for cement in Nigeria by consumption.

He added that CCNN would also continue to explore the huge opportunities that exist in the export markets of Niger, Burkina Faso and the West African region.

“Traditionally, the huge cost of transportation to CCNN’s home region from other cement plants in Nigeria – the nearest being about 900km away – has always given us a strategic advantage in that region over competing cement companies and brands. The expanded entity will leverage on the cost and energy efficiency of the newly commissioned Kalambaina Plant while providing additional value through its products in terms of better quality, higher yields and stronger cement than competing premium cement brands,” he said.

With this merger, the total installed capacity of the merged entity will be two million metric tonnes per annum, which is expected to bring the total capacity of BUA’s cement operations to eight million tonnes per annum (MTPA) as the group recently announced the completion of its  three million MTPA-capacity Obu II Cement Plant in Okpella, Edo State.

The NSE last week listed additional 11.886,823,200 shares of CCNN arising from the merger with Kalambaina Cement Company.

With the listing of the shares, the total issued and fully paid up shares of the CCNN has now increased from 1,256,677,766 ordinary shares to 13,143,500,966 ordinary shares of 50 kobo each.

Meanwhile, the stock market recorded a decline in the first week of 2019 despite the low prices of most stocks.

However, analysts at CSL Stockbrokers Limited had said  they did not see an immediate bargain hunting despite the low prices.

“Although, we acknowledge that the broad sell off in the market has led to a significant moderation in the share prices of stocks providing opportunities for bargain hunting, we think that the argument for “Buying the dip” frequently advanced by money managers and traders is still too early to call for,” they stated.