Shareholders of Dangote Cement Plc recorded a capital gain of 21.1 per cent last week as investors increased demand for the most capitalised stock on the Nigerian Stock Exchange (NSE). Dangote Cement shares rose from N142 to N172 per share in a week that the stock market witnessed its highest growth in two years.
According to some market operators, investors are taking positive ahead of full year results announcement and the positive impact expected from the company’s proposed share buy- back programme.
Dangote Cement Plc will convene an extra-ordinary general meeting (EGM) of shareholders on January 22, 2020 to amend its Articles of Association to enable it undertake a share buy-back of up to 10 per cent of its issued shares on such terms, and conditions and at such times as the board of directors deems fit.
According to Dangote Cement, the programme is in line with the company’s corporate strategy to improved its return on equity, and shareholder value in order to future long term growth.
“The relevant shares will be repurchased out of the profits of the company and any such number of shares bought under the programme is required to be cancelled in accordance with the Securities and Exchange Commission (SEC) rules and the NSE rule book which will consequently lead to a reduction in issued share capital,” the company said.
Market analysts said with a share outstanding of 17,040,507,405, about 1,704,050,741 shares would be absorbed through the programme consequently, cancelling these shares after 10 trading days post acquisition.
At the completion of the buy-back scheme, Dangote Cement shares outstanding will stand at 15,336,456,664. This, analysts said, would enable the company increase long term shareholder value, improve its balance sheet efficiency, enhance earnings and yields to its various shareholders.