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Stock Market

Dangote Cement considers debt funding options under 300 billion bond issuance programme

Dangote Cement Plc. obtained approval to access the Capital Market to maximize available sources of its debt funding.

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Dangote Cement pLC

Dangote Cement Plc has obtained approval from the board of the company to access debt funding options in the capital market.

The announcement for the regulatory approval from the board was contained in a press release issued by Dangote Cement during trading hours today, the 25th of March 2021.

The cement behemoth added that this will help to stimulate the company’s business growth across its operating segments, as the cement manufacturer moves to expand operations by maximizing available sources of debt funding and other options available in the capital market.

READ: BUA Cement loses N162 billion in market value in a week

In line with this, the proposed funding will be used for capital expenditure of the company’s expansion projects, short-term debt refinancing, and its growing working capital requirements.

Providing more information on the approval, the cement manufacturer also revealed its intentions to explore medium to long-term debt funding options through the debt capital market, subject to favourable market conditions.

In case you missed it: Nairametrics reported that Dangote Cement posted a record high revenue of N1.03 trillion in 2020, making it the second Nigerian listed corporate entity after MTN to surpass the N1 trillion mark. The cement behemoth’s revenue expanded by 16% year-on-year to N1.03 trillion, with about N720bn of the revenue generated from its operations in Nigeria.

READ: US Billionaires earn $1.3 trn during the pandemic while 80 million lost their jobs

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What you should know

  • According to the information contained in the company’s audited statement, the total borrowings of Dangote Cement Plc as of 31st of December 2020, increased from N351.4 billion at the end of 2019 to N483.1 billion in 2020.
  • The increase in total borrowings can be pegged on the increase in the short-term dollar-dominated loan the company received from banks, and also the “series 1 Naira bond with a value of ₦100 billion and a coupon rate of 12.5%” which the company issued in 2020.
  • Despite the increase in its total borrowings, the cement manufacturer has been very strategic with its operating and financing costs, in line with its cost optimization strategies.
  • At the end of 2020, Dangote Cement incurred a total of N44.0 billion as finance costs, which is significantly lower than what it incurred a year ago, in 2019 (N57.7 billion).

SSKOHN

Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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    Cryptocurrency

    Nigerian stocks that outperformed Bitcoin, Ethereum and Cardano in April

    According to data tracked on the NSE, the shares of Japaul Gold and Ventures Plc, Meyer Plc and University Press Plc delivered better returns than Bitcoin, Cardano, Ethereum.

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    Crypto

    The recent crypto-mania has presented investors who are nervous about the stock market with key opportunities to capitalize on, through alternative investments in cryptocurrencies.

    The attendant effect of this led to the move which saw the total market capitalization of Bitcoin, Ethereum, Litecoin, XRP and other crypto assets surge above the $400 billion mark in Q4 2020 to more than $2 trillion in recent times – the total market capitalization of all cryptocurrencies are valued at about $1.74 trillion as of the time of drafting this report.

    Despite the gains Bitcoin, Ethereum and Cardano delivered to their holders, the market performance of these digital assets since the beginning of April has been comparatively unimpressive. Of the three cryptocurrencies, only Ethereum maintains month to date gains in excess of 15%, while the month to date losses in others stand in excess of 12%.

    READ: Heavy sell-off in Guinness shares leads to N6.9 billion market value loss in a single day

    The performance of these digital assets so far in April

    Data tracked on Binance, a cryptocurrency exchange that provides a platform for trading various cryptocurrencies revealed that Ethereum’s month to date gains in the month of April is put at about 15% while the month-to-date loss of Bitcoin and Cardano is put at about 16% and 12% respectively.

    Stocks on NSE delivered decent returns in the month of April, outperforming some cryptos. Some stocks on the Nigerian Stock Exchange have delivered impressive returns for their holders in the month of April, despite the recent lacklustre state of key shares listed on the exchange.

    According to data tracked on the Nigerian Stock Exchange, the shares of the following companies have delivered better returns than Bitcoin, Cardano, Ethereum and some other cryptocurrencies so far in this month.

    Hotflex

    READ: America’s oldest bank set to accept Bitcoin

    SSKOHN

    Japaul Gold and Ventures Plc

    (JAPAULGOLD), MtD gains: 46.83%

    The rebranded and restructured mining company with a key focus on gold and other solid minerals exploration is the best-performing stock on NSE this month with a month to date gain of about 46.83%.

    Despite the fact that the stock is currently trading slightly below its open price of N0.62 per share for the year, it has risen from a YTD low of N0.41 to the current N0.60 per share price in recent times. Thus returning a gain of 46.8% for its holders.


    Meyer Plc (MEYER)

    MtD gains: 29.16%

    Stanbic 728 x 90

    The shares of the key player in the paint and decorative industry increased from N0.41 per share at the open of trade this month, to N0.53 per share as of the open of market this morning, to print a month to date gain of 29.16%.

    The stock of the paint manufacturer is presently trading about 6% higher than its open price of N0.50 per share for the month of April.

    READ: Bitcoin investment tips for 2021


    University Press Plc (UPL)

    MtD gains: 19.77%

    The shares of one of Nigeria’s foremost publishers of educational and general reading materials, University Press Plc have increased from N1.07 per share at the close of trade on the 31st of March, to N1.28 per share at the open of trade on the Nigerian Stock Exchange today.

    The recent surge in the shares of the company was triggered by buying interest on the floor of the exchange and this renewed interest in the shares of the publisher has seen its shares return an impressive 19.77% month to date gains to investors since the start of this month.

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    What you should know

    • The Nigerian Stock Exchange All-share Index “NGX ASI” is on course to deliver its first weekly gains after weeks of consistent depreciation in the market index and capitalization.
    • This decent performance can be linked to the renewed buying interest in the shares of some key companies with impressive fundamentals as Q1 2021 financial results start to trickle in.

    Continue Reading

    Markets

    Biden’s capital gains tax disturbs Wall street

    The Dow Jones Industrial Average fell 321.41 points to 33,815.90, or 0.92%.

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    U.S stocks futures rebound , cryptocurrency, ExxonMobil, JP Morgan Chase, MasterCard Up by over 10%

    Following news that President Joe Biden is planning to propose far higher capital gains taxes for the wealthy, Wall Street sank sharply on Thursday. The Dow Jones Industrial Average fell 321.41 points to 33,815.90, or 0.92%. The blue-chip index fell 420 points at its lowest point for the day. The S&P 500 lost 0.94 percent of its earlier gains to close at 4,134.98, while the Nasdaq Composite fell 0.94 percent to 13,818.41.

    Bloomberg News announced Thursday afternoon that Biden is considering raising the capital gains tax rate for rich Americans to as much as 43.4 percent. The measure would increase the capital gains tax threshold on people with $1 million or more to 39.6 percent, up from the existing rate of 20%.

    READ: A Joe Biden presidency and its impact on Nigeria’s oil

    • The Stoxx Europe 600 Index advanced 0.7% while the MSCI All-Country World Index declined 0.2%.
    • Capital gains plan does not exempt crypto as Bitcoin fell for the sixth time in seven days, widening losses. If investors keep the cryptocurrency for longer than a year, they will be subject to capital gains tax.
    • Growth stocks led the intraday downturn on Thursday, with shares of Tesla and Amazon sliding 3.3 percent and 1.6 percent, respectively, as a result of higher capital gains taxes. The iShares S&P 500 Growth ETF fell 1%, outperforming its value counterpart.

    .Top gainers  

    1. Equifax up 15.06% to close at $221.64.
    2. Tractor Supply up 4.43% to close at $188.14.
    3. AT&T up 4.15% to close at $31.36
    4. Arconic up 3.67% to close at $27.43
    5. Danaher up 3.43% to close at $252.79

    Top losers

    1. Huntington Bancshares -6.71% to close at $14.46
    2. Dow down -6.01% to close at $60.92
    3. LyondellBasell Industries down -5.66% to close at $102.00
    4. Micron down -5.34% to close at $84.71.
    5. Nucor down -5.08.% to close at $76.11

    READ: U.S Stock futures propel high amid low volatility

    Outlook

    • Long-term buyers will see a significant cost spike as a result of this tax increase. If investors believe the plan has a chance of becoming law next year, they may be expected to sell this year.
    • Some analysts believe that it may be difficult to pass the bill into law in the senate.

    Nairametrics advises cautious buying in this era of growing uncertainties.

    SSKOHN
    Continue Reading

      





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