The Nigerian equities market recorded the best weekly performance in two years following sustained bargain hunting by investors.
The Nigerian Stock Exchange (NSE) All-Share Index rose 9.1 per cent to hit 29,415.39, while market capitalisation rose by 16.5 per cent to N15.175 trillion last week.
The last time the market posted such a major weekly gain was January 12, 2018. Investors’ appetite for risk assets increased significantly as traders continued to take advantage of low prices of equities that suffered major decline last year. Against the backdrop of the increased demand and major gain last week, the year-to-date growth has risen to 9.6 per cent.
All other indices finished higher with the exception of NSE Oil/Gas Index, which depreciated by 0.04 per cent and NSE ASeM Index which closed flat.
According to analysts at Cordros Capital, while they expect profit-takers to dominate activities this week, they still see significant legroom for a further rally as the elevated maturities from fixed income instruments hunt for investment vehicles.
“Nonetheless, we advise investors to cherry-pick fundamentally sound stocks,” they said.
Apart from the NSE ASI that posted a major jump, the market capitalisation of the exchange also hit N15.175 trillion due to the listing of BUA Cement Plc.
A total of 33.864 billion ordinary shares of 50 kobo each of BUA Cement Plc were listed at N35 per share. However, high demand for the stock on lifted its share price to rose to N41.00 per share, boosting its market capitalisation from N1.18 trillion to N1.388 trillion.
Speaking at the listing ceremony, Managing Director of the company, Yusuf Binji, said: “BUA Cement is poised to add even more value to the Nigerian economy as a whole through this listing.
“Over the past few years, we have significantly ramped up capacity and currently boast the most efficient and integrated operations in the Nigerian cement industry.
“This new publicly listed company will continue to deliver exceptional value to all stakeholders in the foreseeable future.”
According to him, the merger provided a compelling opportunity to capture significant synergies and create value for the benefit of the shareholders of both companies in the form of stronger competitive position of the enlarged company, economies of scale, enhanced operations and administrative efficiencies that will accrue.
He said it is a major fulfillment for the group to have its shares listed after a merger of two companies that control significant markets in Southern and Northern parts of the country.
According to Binji, the listing of BUA followed the merger of Cement Company of Northern Nigeria (CCNN)Plc and Obu Cement Company Limited. He explained that while CCNN was the listed company before now, its merger with Obu Cement, both of members of the BUA Group, gave birth to BUA Cement Plc , an enlarged firm, with a total installed capacity of 8.0 metric tonnes per annum(mtpa).
“This is in line with the group’s vision to unlock opportunities inherent in the business space in Africa for Africans by Africans through BUA’s strategic investments in key industries within Nigeria and across the continent. The new entity, BUA Cement, will be the second largest producer of cement in Nigeria by Volume with factories in Sokoto State, North-east Nigeria (2million mtpa) and Okpella Edo State, South-south Nigeria (6 million mtpa),” he said.
He disclosed that a new three million mtpa plant currently being constructed is scheduled to be operational in 2020 in Sokoto State.
“BUA Cement also has the benefit of market leadership positions in its key regional markets of the North West, South-south and South-east Nigeria due to its location and proximity to those markets. It also has a huge export market in Western Africa.
He said with the listing the shareholders should expect better returns because the company will be one the top best dividend paying companies.
Binji said in addition to meeting the demand from customers in our core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation.
“The merger of the two companies to become BUA Cement would provide opportunities for significant cost savings and improved operational efficiencies by streamlining operations and optimising the use of combined resources. It has also provided a platform where the enlarged company benefits from economies of scale in procurement, distribution and manufacturing of the products offered to our customers. We expect the benefits accruing from greater economies of scale to accrue to many stakeholders,” he said.
According to the CEO, the listing further restated the group’ s commitment towards the Nigerian economy and delivering of exceptional value to stakeholders at all times.
Also speaking, the CEO of the NSE, Oscar Onyema, applauded the Founder of BUA Group and Chairman of BUA Cement, Abdul Samad Rabiu, for bringing BUA’s expanded cement business to the exchange it as a “show of confidence in the value the NSE offers.”
According to him, BUA Cement Plc had become the third company on the NSE. He said the capital market community, and NSE in particular welcomed BUA Cement listing with excitement, adding that it is historic to record such a major listing at the beginning of the year.
He said the listing offers another opportunity for investors to have access to a company with good performance track record and bright future prospects, adding that the company has plans to move to the Premium Board of the NSE in very short period of time.
Meanwhile, investors traded 2.683 billion shares worth N32.646 billion in 30,956 deals last week, up from 2.309 billion shares valued at N21.675 billion that exchanged hands in 14,906 deals the previous week. The Financial Services industry maintained the lead on the activity chart with 2.035 billion shares valued at N18.592 billion traded in 18,876 deals, thus contributing 75.8 per cent and 56.9 per cent to the total equity turnover volume and value respectively.
The Conglomerates industry followed with 225.720 million shares worth N504.123 million in 1,217 deals. The third place was Consumer Goods industry, with a turnover of 123.382 million shares worth N3.116 billion in 3,403 deals.
Trading in the top three equities namely, United Bank for Africa Plc, Zenith Bank Plc and WAPIC Insurance Plc accounted for 934.661 million shares worth N10.925 billion in 7,194 deals, contributing 34.8 per cent and 33.4 per cent to the total equity turnover volume and value respectively.
Regarding Exchange Traded Funds, a total of 15,390 units valued at N13.095 million were traded last week in 32 deals, compared with a total of 4,033 units valued at N4.233 million transacted the previous week in 26 deals.
In bonds market, a total of 64,840 units of Federal Government Bonds valued at N71.362 million were traded in 30 deals, compared with a total of 204,300 units valued at N237.207 million transacted the previous week in four deals.
Top price gainers and losers
The price movement chart showed that 51 equities appreciated during the week, higher than 44 equities in the previous week, while 20 equities depreciated in price, lower than 24 equities in the previous week.
Dangote Cement Plc led the price gainers with 21.1 per cent, trailed by Presco Plc with 19.7 per cent. Livestock Feeds Plc garnered 18 per cent, just as Okomu Oil Palm Plc and Consolidated Hallmark Insurance Plc 16.8 per cent and 16.6 per cent in that order.
Other top price gainers included: Flour Mills of Nigeria Plc (16.4 per cent); FBN Holdings Plc (15.9 per cent); NASCON Allied Industries Plc (15.8 per cent); Ekocorp Plc (14.1 per cent); and UAC of Nigeria Plc (13.8 per cent).
Conversely, UPDC Real Estate Investment Trust led the price losers with 18.6 per cent. NCR Nigeria Plc trailed with 10 per cent, while Union Dicon Salt Plc and Tripple Gee and Company Plc went down by 9.8 per cent; 9.3 per cent in that order.
Other top price losers were: Niger Insurance Plc, Union Daignostic & Clinical Services Plc (9.09 per cent); Unilever Nigeria Plc (8.2 per cent); Thomas Wyatt Nigeria Plc (7.8 per cent); Meyer Plc (7.4 per cent); Trans-Nationwide Express Plc (6.5 per cent).