South African Fund sees more Dangote deals with N1.1trn

The Public Investment Corporation, Africa’s largest asset manager, will consider investing in more companies linked to Aliko Dangote, the continent’s richest man, as it seeks to tap industries benefiting from economic growth, reports Bloomberg.

The pension fund this week invested $289.3 million ($46 billion) in Dangote Cement Plc to take a 1.5 percent stake and said the deal will also offer opportunities in Dangote’s sugar, flour, oil refinery and port operations, Fidelis Madavo, head of resources at Pretoria-based PIC, wrote by e-mail on Wednesday.

The fund has as much as $7 billion (N1.1 trillion) to invest in Africa and is targeting as many as 20 listed stocks across industries such as consumer, infrastructure, telecommunications and agribusiness as growth rates accelerate, he said.

Shares of the group’s sugar and salt businesses rose as much 10 percent after the comments.

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“This rally might be sustained for the next couple of days,” Lanre Buluro, head of research at Primera Africa Securities Ltd., said by telephone from Lagos. “I’d like to see if the PIC will look into other blue chip companies outside of Dangote in our economy. That would be positive for our market.”

Nigeria’s $269 billion (N42.5 trillion) economy will grow 7.2 percent this year, International Monetary Fund (IMF) projections show. That compares with an estimated 5.6 percent growth rate for sub-Saharan Africa.

Dangote Cement, Africa’s biggest producer of the building material, plans to expand significantly throughout sub-Saharan Africa, Madavo said. Dangote Sugar Refinery Plc rose 10 percent, before closing 0.7 percent higher at N12.85 at the 2:30 p.m. close in Lagos, while Dangote-owned National Salt Company Nigeria Plc also added 10 percent, before closing 4.8 percent higher to a five-year high at N14.

The cement deal “offers the PIC other investment opportunities in Dangote Group portfolio companies,” Madavo said in the response to questions. The company is “sub-Saharan Africa’s largest and most efficient cement producer,” he said.

The Lagos-based cement company, West Africa’s largest by market value, can produce 19.3 million metric tons in Nigeria, with plans to increase that to 29 million metric tons by 2015. Operations will start in Cameroon, Zambia and South Africa in 2014, and the Democratic Republic of Congo in 2015, chief executive officer, Devakumar Edwin, said in April.

Dangote Cement will probably list shares in London in the fourth quarter of 2014 or first three months of 2015, Dangote said last month in an interview in Cape Town, where he also said he’s negotiated $4.25 billion (N671.5 billion) of loans to build a refinery in Nigeria.

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