Stocks that could benefit from Nigeria’s 2018 budget

President Muhammadu Buhari presents the 2018 budget to the National Assembly

President Muhammadu Buhari this week presented the 2018 budget to the National Assembly. Below are a list of stocks, that could likely benefit from the government spending.

Stocks in the agriculture sector
President Buhari, during his budget presentation speech highlighted his administration’s achievements in the agricultural sector so far and the plans to do more.

We shall continue to intensify our interventions through the Anchor Borrowers’ Programme and the Presidential Fertilizer Initiative to ensure that this momentum is sustained.

In addition, his adminstration has made provisions in the 2018 Budget to complete ongoing Irrigation Projects at Ada, in Enugu State; Lower Anambra, in Anambra State; and Gari, in Jigawa State.

He also stated that the government would establish at least 6 Staple Crop Processing Zones, in the first phase. The focus is on backward integration for grains, horticulture, livestock, fisheries and sugar; as well as exportable commodities such as cocoa, cassava and oil palms. Buhari, also stated his administration will take a hard stance against smuggling.

Food Security is an important aspect of this Administration’s National Security agenda. Any person involved in smuggling of food items is a threat to our National Security and will therefore be dealt with accordingly

Towards the end of his speech, the President again emphasized the need for the Nation to feed itself.

Stocks to watch

Presco Plc

Presco was incorporated in Nigeria on the 24th of September, 1991 as Presco Industries Limited as a private limited liability company, and became a public limited liability company in February 2002. Siat Group holds 60%, while the Nigerian public holds 40%.
The company’s activities include the cultivation of oil palm, and the extraction, refining and fractionation of crude oil palm into finished products.

Okomu Oil Palm Plc

Okomu Oil Palm Plc was incorporated as a private limited liability company on December 3, 1979 as a private limited liability company and converted to a public limited liability company in 1997. Socfinal group of Luxembourg holds 60% of the company’s shares, while 40% is held by Nigerian shareholders. The company is listed on the Nigerian Stock Exchange.

Livestock Feeds Plc

Livestock Feeds Plc was incorporated on 20th of March,1963 and commenced business on 20th May,1963. The companywas quoted on the Nigerian Stock Exchange in 1978. Livestock Feeds is engaged principally in the manufacturing and marketing of animal feeds and concentrates, and is a subsidiary of UACN Plc.

Infrastructure

The 2018 budget devotes a large chunk of capital expenditure to power, works, housing and transportation.While a total of N2.4 trillion was devoted to capital expenditure, Power Works and Housing takes the lion share of N555 billion while Transportation has been allocated N243 billion.

Stocks to watch

Dangote Cement Plc

Dangote Cement Plc (“the Company”) was incorporated in Nigeria as a public limited liability company on 4th November, 1992 and commenced operations in January 2007. Its parent company is Dangote Industries Limited. Its ultimate controlling party is Alhaji Aliko Dangote.

The principal activity of the Company and its subsidiaries is to operate plants for the preparation, manufacture, and distribution of cement and related products.

A sister company in the Dangote Group, AG Dangote has recently embarked on road construction using cement, and an increasing adoption of this, could lead to increase patronage of the cement company.

Lafarge Africa Plc

Lafarge Africa Plc was incorporated in Nigeria on26th February 1959, and commenced business on the 10th of January, 1961. The company is into the production of cement, ready mix cement and Fly Ash.

Julius Berger

Julius Berger was incorporated as a private limited liability company in 1970, and converted to a public company in 1979. The company is into the design, planning and construction of civil engineering and building works.

Cutix Plc

Cutix Plc was incorporated on November 4, 1982 as a private limited liability company. The company was initially quoted on the Nigerian Stock Exchange and later migrated to the first tier on February 18, 2008.The company is into the manufacturing and marketing of electrical, automobile and telecommunications cable and related products.