Market Values Of Dangote, BUA, And Lafarge Africa increase by N7.921 Trillion

In Q1 of 2024, the market values of Dangote, BUA, and Lafarge Africa increase by N7.921 trillion

Through the end of the first quarter of 2024, three listed cement businesses on the Nigerian Exchange Group Plc (NGX) floor reported a cumulative gain of over N7.921 trillion.

The companies' shares outperformed the market despite ongoing economic headwinds such high inflation, a declining currency rate, and ongoing security worries.

There were noticeable changes in consumer behavior as a result of the general optimism, and at the end of the quarter, the All-Share Index closed at a notable 104,562.06 index points.

Furthermore, the NGX All-Share Index's remarkable 39.84% year-to-date (YTD) return demonstrates its tenacity.

In the face of rising inflation, potential interest rate hikes, and unstable currency exchange rates, investor confidence in the Nigerian stock market has proven remarkably resilient. This unshakeable confidence has therefore increased market activity and heightened purchasing interactions.

One of the largest cement producers listed on the Nigerian Exchange Group Plc (NGX) industrial goods subsector, Dangote Cement Plc, took the lead with a gain of almost N6.250 trillion in the first quarter of the year.

The cement stock gained N6.250 trillion over the review period, rising by 114.66% to close at N686.70 a share and N11.701 trillion in market capitalization from N319.90 and N5.451 trillion when it opened for trading in January.

BUA Cement Plc, which is likewise listed on the NGX's industrial products subsector, gained almost N1.565 trillion over that time frame.

In comparison to the opening figures at the start of trading activities in January 2024 of N97.00 and N3.284a trillion in market capitalization, its stock price increased by 47.6% to N143.20 per share and N4.849 trillion in market capitalization.

Lafarge Africa lagged behind, experiencing a little 20.79% increase to N38.05 per share and N612.901 billion in market capitalization at the start of the trading year, compared to N31.50 and N507.395 billion.

Mr. David Adonri, Executive Vice Chairman of Hicap Securities Limited, stated that while financial assets tend to shift from equities to the debt market or fixed-income securities during periods of rising interest rates, investors also take positions in demand-elastic stocks.

He pointed out that equities in industries with elastic demand, such as banking and consumer products, should perform well during interest rate increases.

“The banking sector is always the veritable area, particularly during this period of interest rate hikes and inflation. Banks such as Zenith Bank Plc, UBA Plc, GTCO Plc, Access Bank Plc Fidelity Bank Plc, and Stanbic IBTC are good investment destinations. Industrial goods sectors such as Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa are also good to buy in this period. Oil and gas stocks are also likely to benefit from the inflation.”

Adonri added that investors were in the earning season and that one of the things driving the market's demand for shares at the time was the dividends that investors would get.

He pointed out that because investors are optimistic about the future and see excellent prospects for a yield environment, the stock market is bucking the present political unrest.

The Managing Director of Arthur Steven Asset Management Limited, stated that the NGX has undergone a demographic shift in recent years.

“We now have more local institutions and retail investors in the market than foreign portfolio investors. The reverse used to be the case, this shift has naturally reduced volatility in stock prices as the locals are likely to have more faith in the local market than foreigners. That's why you see the NGX ASI continuing to rise despite all the uncertainties in the environment.”

Amolegbe went on to say that the main factor driving the stock market surge is the belief that the policies will promote foreign investment inflow.

“The second trigger will include the fact that some of these policies will lead to a short-term increase in inflation level and typically stock prices tend to rise along with inflation,” he said.