Three listed cement companies on the floor of the Nigerian Exchange Group Plc (NGX) recorded a combined gain of about N7.921 trillion at the close of the first quarter of 2024. The companies include Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc, as tracked by Nairametrics.
Resilience Amid Challenges: Despite prevailing economic challenges such as elevated inflation, a depreciating exchange rate, and persistent security concerns, the shares of these companies witnessed significant growth. This resilience was evident as the All-Share Index closed at 104,562.06 index points by the end of the quarter, with a year-to-date (YTD) return of 39.84%.
Performance Breakdown: Dangote Cement Plc led with a gain of about N6.250 trillion, representing a growth of 114.66% to close at N686.70 per share. BUA Cement Plc followed with a gain of about N1.565 trillion, recording a 47.6% increase to N143.20 per share. Lafarge Africa saw a marginal growth of 20.79% to N38.05 per share.
Expert Analysis: According to Mr. David Adonri, Executive Vice Chairman of Hicap Securities Limited, investors tend to position themselves in stocks that are elastic in demand during times of escalating interest rates. He identified banking stocks, consumer goods stocks, and industrial goods sectors like cement companies as favorable investments during such periods.
Investor Sentiment: Mr. Olatunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited, highlighted a demographic shift in the NGX, with more local institutions and retail investors driving market activity. He attributed the stock market rally to expectations of policies encouraging foreign investment inflows and short-term increases in inflation levels.
Conclusion: Despite economic challenges, cement companies on the NGX have demonstrated remarkable growth, reflecting investor confidence and resilience in the face of uncertainties. The optimistic outlook and increased participation of local investors bode well for the continued growth of the equities market.
Source: Nairametrics