Following the positive sentiment, the Nigerian Exchange Limited is currently witnessing in 2024, shares of three quoted cement companies on the NGX recorded a combined gain of 9.89% after trading on 16th January 17, 2024.
The companies are Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc.
This resulted in investors of the companies gaining about N1.043 trillion at the close of trading on January 16th.
The domestic bourse maintained the bull run as the benchmark index closed 3.93% stronger to settle at 87,971.10 points.
Sustained by interests in industrial heavyweights namely, DANGCEM (+9.84%), BUACEM (+9.96%) alongside ZENITHBANK (+2.92%) drove the market’s strong performance, offsetting selloffs in UCAP (-1.57%), MANSARD (-1.39%) and CUSTODIAN (-2.04%).
As a result, the year-to-date (YTD) return rose to 17.65%, while market capitalization gained ₦1.82trn to close at ₦48.14trn.
The market sentiment for the segment which comprises has remained resilient in the face of economic volatility.
Financial analysts believe that in 2024, the Nigerian cement industry is expected to benefit from renewed government focus on infrastructure development and construction projects, which could stimulate demand for cement products.
Breakdown of the gains:
- Checks by Nairametrics showed Dangote Cement Plc closed the trading day (January 16th, 2024, at N411.90 per share and N7.019 trillion in market capitalisation on the Nigerian Stock Exchange (NGX) as against N375 per share and N6.390 trillion in market capitalization it recorded the previous day, hence has earned a gain of N628.793 billion or 9.84%.
- Also, BUA Cement Plc shares rose to N112.65 per share or N3.815 trillion in market capitalization after the day’s trading from N102.45 per share or N3.469 trillion at the beginning of the day’s trading, hence adding N345.426 billion or 9.96% to the market capitalization.
- Lafarge Africa Plc shares rose to N47.30 per share or N761.898 billion in market capitalization after the day’s trading from N43 per share or N692.635 trillion at the beginning of the day’s trading, hence adding N69.263 billion or 10% to the market capitalization.
What market operators said about the market:
Nairametrics reported yesterday that financial analysts at Cardinal Stone Research noted that in 2024, the Nigerian cement industry is expected to benefit from renewed government focus on infrastructure development and construction projects, which could stimulate demand for cement products.
The analysts stated this in their report on Nigeria Cement Sector 2024 Outlook tagged ‘Nigeria Cement Rebounding from a tumultuous year’
They noted that with increased budget allocations to critical sectors and ambitious infrastructure initiatives (N1.32 trillion to infrastructure, which represents 5.0% of the total FG 2024 budget), the construction industry is likely to experience a resurgence.
- “As Nigeria’s cement industry reflects on a challenging 2023, characterised by demand-stifling events like the cash crunch orchestrated by a poorly executed currency redesign policy, the material currency devaluation, and bouts of heavy rainfall, its hope for a gradual recovery in 2024 feeds off the return to relative macroeconomic normalcy and early gains from tough policy reforms.
- Cement manufacturers, in response, are beginning to recalibrate their production strategies in the form of capacity expansion and improved efficiency to meet the anticipated rise in demand,” they said.
The analysts said that while challenges may persist, the outlook for Nigeria’s cement industry in 2024 is one of cautious optimism, with potential growth opportunities emerging amidst the recovery phase.