Dangote Cement has emerged as the first company to achieve a market capitalization of N10 trillion on the Nigerian Exchange Group (NGX), closing trading on Monday with a market cap of N10.098 trillion.
The company’s market cap surged by N917 billion in a single trading session, marking an 85.25 percent increase in capital gains for investors.
This achievement comes on the heels of the company displacing Airtel Africa as the most capitalized stock on the local bourse earlier this month.
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At the close of Monday’s trading, Dangote Cement’s share price stood at N592.60 per unit, showcasing remarkable performance with a return of over 81.4% in the last 52 weeks. The company holds 17.04 billion outstanding shares, and a significant majority, approximately 85.8%, is controlled by Dangote Industries Limited, spearheaded by Africa’s wealthiest individual, Aliko Dangote.
The company’s growth has been bolstered by strategic initiatives, including two tranches of share repurchases conducted between 2020 and 2022. These buybacks, amounting to 166.9 million shares, are believed to have fortified the stock valuation.
The company’s growth has attracted major investors, with Femi Otedola, a prominent Nigerian billionaire, recently acquiring shares worth an impressive N6 billion in Dangote Cement Plc.
Dangote Cement’s milestone on the NGX has also fueled speculation about the potential listing of other Dangote Group entities, including the newly operational Dangote Petrochemical Refinery. Analysts had projected the listing of Dangote Refinery, along with Dangote Foods (a result of the ongoing merger of Dangote companies) and NNPC Limited, to be major boosts for the capital market.
The refinery’s commencement of production has had a positive ripple effect on the stocks of Dangote Group companies listed on the exchange. Investors in Dangote Cement, Dangote Sugar Refinery, and NASCON Allied Industries have gained over N1.2 trillion during the first two trading sessions of the past week.
Dangote Cement’s achievement comes amid a backdrop of controversy over the high cost of cement in Nigeria. Last year, BUA Cement Plc, the only rival to Dangote Cement in the Nigerian market, took a significant step by reducing the cost of its products from N4,650 to N3,500 per bag.
This move was prompted by discussions within the construction industry, with stakeholders expressing concerns over the high cost of cement in the country.
The Minister of Works and Housing, Dave Umahi, added to the discourse by saying that it’s cheaper to import cement than purchase from local manufacturers – BUA and Dangote Cement. This statement sparked a national conversation around the implications of the high cost of cement on construction in Nigeria.
In his response, BUA Cement’s Chairman, Abdul Samad Rabiu, stated that the company’s decision to reduce cement prices aligns with its mission to support development in the building materials and infrastructure sectors.
However, Dangote Cement, with its products selling in the range of N5,000 to N5,300 per bag, did not follow suit, maintaining its pricing strategy.
Dangote Cement’s dominant assertion on the NGX and the construction industry amid the challenges of cement pricing signifies its position as the major player with substantial market value – underscored by the company’s market cap milestone.