Banks to Extend 9Mobile’s Loan Pending New Investors…

In apparent show of confidence, some foreign investors have bought 2.3 per cent stake in Dangote Cement Plc for N86.1 billion ($236 million). The sale involved 416 million shares that was consummated in six off market deals on the Nigerian Stock Exchange (NSE) yesterday.

This is the third time foreign investors are buying into Dangote Cement, where Africa’s richest man, Aliko Dangote, has a controlling stake.

In 2013, South Africa’s Public Investment Corporation (PIC) bought 1.5 per cent for $289.3 million. Similarly, in 2014, Sovereign fund Investment Corp of Dubai (ICD) acquired 1.4 per cent for $300 million.

Although the identity of the new foreign investors who bought 2.3 per cent yesterday could not be ascertained, the news lifted the price of the stock by 7.26 per cent or N16.25 from N223.75 to N240 per share to record highest price gain in absolute terms.

Reacting to the transaction, a leading stockbroker, Mr. David Adonri, said it is good development for both the company and the Nigerian economy.

“As you are aware, Dangote Cement is a multinational entity. It is capable of eliciting global interest. New foreign investment can be viewed from the perspective that the company is performing very well and that the Nigerian economy is providing it with necessary enabling environment,” he said.

Dangote Cement is the largest company on the NSE, accounting for a third of the bourse’s total market capitalisation. The company closed with market capitalisation of N4.089 trillion yesterday.

Dangote Cement recently reported a 24 per cent growth and profit before tax for the half year ended June 30, 2017 to N155.58 billion.

The company had recorded a profit after tax of N187 billion in 2016 and paid a dividend of N8.50 per share. Dangote told shareholders that the company’s Pan-African diversification has provided cash streams from countries such as Senegal, Cameroon and Zambia, which have provided them with essential foreign currency as foreign exchange controls made it difficult for them to obtain dollars for operations.

“Furthermore, we were able to borrow money in these countries’ local currencies, thus reducing our exposure to foreign currency shortages in Nigeria. In addition, we began to generate foreign currency sales from exports of cement from Nigeria to Ghana,” Dangote said.

He noted that the results of strategic decisions taken years ago enabled Dangote Cement to strengthen its business and consolidate its position in 2016 when many others in Nigeria and across the rest of Africa have struggled against economic downturn.