Nigeria’s Dangote Cement drives local bourse to new height on share repurchase deal
By Samuel Bankole
Investors buying interest in the continent’s biggest cement firm, Dangote Cement drove the local equity market to a new high on Tuesday on the back of the company’s decision to launch a share buy back exercise toward the end of the year.
Share in Dangote Cement, which accounts for a fifth of the market capitalisation jumped by 6.34 percent as investors scrambled to take positions in the stock ahead of the December 30, date for the share repurchase.
The cement firm, majorly owned by Africa’s richest man had on Monday announced plans to launch a share buy back of about 0.5 percent of its issued capital between December 30-31, 2020.
This has spurred investor appetite for the cement company shares, pushing up the market main index for the second day in a row.
The Nigerian Stock Exchange (NSE) All Share Index (ASI) rose to a new 21/2 year high and extended the market rally for the seventh consecutive trading day.
The index rose 1.2 percent to 37,893.61 points, a level last seen in July 2018.
The market index rose by 1.74 percent to close at 37,443.40 points on Monday after investors showed tremendous interest in the shares of the cement firm.
Analysts projected that the company could postpone the share buy back exercise if the share prices are driven higher than the projections made by the company’s directors for the share repurchase.
Dangote Cement has recorded 72.5 percent gain year-to-date, closing at N240 per share on Tuesday.
Other gainers include chocolate maker, Cadbury which gained 4 percent to close at N9 a share, household product maker PZ gained 2.8 percent to close at N5.50 while lender United Bank for Africa (UBA) gained 2.4 percent to close at N8.40 a share.