The share price of Dangote Cement Plc has not changed, despite the invasion of its Obajana Cement plant by the Kogi State Government on Wednesday.
The invasion, which allegedly resulted in the shooting of several workers of the Dangote cement plant in Obajana by the state’s security outfit was frontally condemned by the Organised Private Sector (OPS) operators under the aegis of National Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA).
Checks by Nairametrics show that the company’s share price, which opened trading at N245.00, and N4.175 trillion in market capitalization on Wednesday 5th, before the invasion, closed at the same share price and value at the close of trading on Friday 7th October 2022.
According to Mr. Mike Eze, managing director of Crane Securities Limited, the stability of the price in the face of crisis despite the current bear run showed positive sentiment in the stock.
- There are other factors that investors consider apart from the fundamentals when deciding to invest in stocks.
- “Share performance of a company goes beyond fundamentals, The share price can be influenced by past information, publicly available information, and information not disclosed to the public.”
Shares Information
- The share price is down 6% in the last year while trading at a price-to-earnings ratio of 12.19x. The current dividend yield is also around 9%.
- Dangote shares are largely owned by Aliko Dangote and institutional investors. According to its annual report, Dangote Industries Limited and Stanbic nominees own over 90% of the company.
- “All shares other than treasury shares and shares held by Dangote Industries Limited (85.8%) and Aliko Dangote (0.16%) are considered free float shares.”
- This perhaps explains why the Kogi state threat will do little to hurt share price performance.
What Kogi State is saying
The Kogi State Government, on Thursday, presented to the public the report of the Specialised Technical Committee on the Evaluation of the Legality of the Alleged Acquisition of Obajana Cement Company Plc by Dangote Cement Company Limited.
What Dangote Management said
However, the management of Dangote Cement Plc had stated that the Obajana Cement plant in Kogi State is owned 100% by it and that the invasion of the plant last Wednesday by armed vigilantes on the orders of the state government was illegal.
The trading rule that requires the Exchange to revert to the preceding day’s closing price if the total sales for the day is below 100,000 units is preventing investors from knowing the actual price of Dangote Cement Plc on NGX. The current price is actually N220 per share. So impasse is affecting the share price and it would require both parties to thread cautiously