Dangote Cement plc (DANGCEM), the most capitalised company on the Nigerian Stock Exchange (NSE), recorded its biggest gain in over four years on Wednesday.
Many analysts had expected that MTN Nigeria would overtake DANGCEM as the most capitalised stock on the bourse if not for the renewed interest in the cement company’s shares witnessed yesterday.
Dangote Cement plc rallied to the topmost position on the price gainers table as it gained N18 or 9.73 percent to N203 per share at the close of trading.
The share price of MTN Nigeria Communications plc increased to N144.85 or 9.98 percent which represents its daily allowable limit. The stock gained a total of N270 billion on Wednesday.
At the current market price, Dangote Cement is valued at N3.459 trillion while the cumulative value (market cap) of MTNN is now N2.950 trillion. It implies that MTNN will need to advance by at least N506 billion to catch up with Dangote Cement.
Gbenga Sholotan, head of research at RMB Nigeria Stockbrokers (RMBNS), in an MTN Nigeria (MTNN) research report valued the company’s equity at N3.002 trillion ($8.338 million). This value, he noted, translates to target price (TP) of N147.
“For investors that have created liquidity and waited to buy MTN Nigeria’s shares, a lot of them were looking for the best option,” Ayodeji Ebo, managing director at Afrinvest Securities Limited, told BusinessDay.
“Rather than wait to buy MTN on Friday at N175, the investors opted for Dangote Cement at N180,” he said.
After growing net income for the full-year 2018 by 91 percent to N390.33 billion, Dangote Cement proposed a final dividend of N16 per share for its shareholders with a due date of June 3, 2019.
This implies any investor that buys the stock now would qualify for the dividend, Ebo noted.
“The market has been looking for the period when MTNN would become the largest stock by market capitalisation, but there was a very sudden movement in Dangote Cement,” said another market analyst who spoke on condition of anonymity.
“The stock has been very flat recently until on Tuesday when it gained 3 percent and on Wednesday over 9 percent. This is against what we have been seeing in this stock in the last couple of months, so perhaps that gain was just to ensure the company remains largest stock by market cap ahead MTNN just for bragging rights,” the analyst said.
“With demand for MTNN (the primary market driver) waning, as evidenced by reducing bid size (closed with over 10.5 million units at limit up compared to Wednesday of over 18 million units at limit up), in our opinion, the rally might not be sustained beyond Thursday,” research analysts at Vetiva said in their May 22 note.
The All Share Index (ASI) rose from 30,254.89 points to 31,145.15 points. In 4,835 deals, dealers exchanged 294,572,910 units valued at N17.468 billion. The value of Nigeria’s listed equities increased to N13.717 trillion from preceding day low of N13.3 trillion.
MTNN stock price has risen by N54.9 or 60.9 percent in just five days after its listing by introduction on the Nigerian Stock Exchange (NSE). As at May 16, stock dealers exchanged 5.541 million units of MTN Nigeria shares at N99 per share. On May 17, they exchanged 32.098 units at N108.90 per share.
On May 20, 51.4 million units were exchanged at N119.75 per share, while on May 21, stock dealers exchanged 110.7 million units of MTN Nigeria Communications plc at N131.70 per share.
While Dangote Cement plc has enjoyed the status of most capitalised stock on the NSE for years, MTN Nigeria on Thursday, May 16, listed by introduction its 20.35 billion shares at N90 per share. MTNN was listed on the Premium Board. The listing by introduction means that the existing shares of MTN Group (78.8 percent), the Nigerian investors (19.4 percent), and other investors (1.8 percent) are listed.
Iheanyi Nwachukwu & Oluwasegun Olakoyenikan
