Three publicly traded cement companies listed on the Nigerian Exchange Group Plc (NGX) achieved a combined gain of N7.344 trillion by the end of the first half of 2024.
According to the trading statistical reports monitored by Nairametrics, the companies include Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc.
The three companies grew market capitlisation to N16.587 trillion at the close of trading in June 28, 2024, from the opening figure of N9.243 trillion representing a growth of 79.45% or N7.344 trillion.
Despite facing significant economic challenges such as elevated inflation, a depreciating exchange rate, and ongoing security concerns, the shares of these companies demonstrated remarkable resilience.
The prevailing optimism manifested in discernible shifts in purchasing behavior, culminating in the All-Share Index closing the half year at 100.057.49 index points by the end of the half year.
Moreover, the year-to-date (YTD) return of the NGX All-Share Index shows its resilience, standing at an impressive 33.81% despite recent bearish trends seen in the Q2 of the year.
Despite the backdrop of escalating inflation, prospective interest rate adjustments, and volatile exchange rates, investor confidence has displayed remarkable steadfastness in the Nigerian equities market. This unwavering assurance has, in turn, spurred heightened market activity and intensified buying engagements.
Breakdown of performances
Checks by Nairametrics revealed that Dangote Cement Plc, one of the major Cement manufacturers listed on the industrial goods sub-sector of the Nigerian Exchange Group Plc (NGX) led with a gain of about N5.739 trillion during the half of the year.
The cement stock grew by 105.28% to close at N656.70 per share and N11.190 trillion in market capitalization during the review period from N319.90 and market capitalization of N5.451 trillion it opened for trading on January, hence has earned a gain of N5.739 trillion.
BUA Cement Plc also listed in the industrial goods sub-sector of the NGX followed with a gain of about N1.565 trillion during the period.
Its stock price grew by 47.6% to N143.20 per share and N4.849 trillion in market capitalization as against N97.00 and N3.284 trillion in market capitalisation which was the opening figure at the beginning of trading activities in January 2024.
Lafarge Africa trailed with a marginal 8.09% growth to N34.05 per share and N548.470 billion in market capitalisation from N31.50 and N507.395 billion in market capitalisation at the beginning of the trading year.
What market expert said
Mr. David Adonri, Executive Vice Chairman, Hicap Securities Limited in a chat with Nairametrics said that although in times of escalating interest rates, the financial assets tend to migrate from equities to the debt market or fixed-income securities, however, investors also take a position on stocks that are elastic in demand.
He noted that areas that are elastic in demand like consumer goods stocks and banking stocks are likely to be stocks to pick up during interest rate hikes.
- “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 also noted that investors were in the earning season and that what investors would get from dividends was one of the factors that drove the demand for shares in the market during the period.
He noted that the equities market is defying current political uncertainties because investors are futuristic that the prospect for a yield environment is bright.
- “Most companies, released their results during the half year. The market normally sustains positive sentiment during the earning season.