On Monday, Dangote Cement became the first company to reach a market capitalisation of N10tn on the Nigerian Exchange.
Billionaire businessman, Femi Otedola, who referred to Aliko Dangote as his “bestie”, acquired a substantial amount of Dangote Cement shares, leading to a N10.098tn market cap after a N917bn gain, following a 9.99 per cent rise in its stock.
This marks a significant increase from the company’s 2023 market cap of N5.451tn, with its shares closing at N590.60 per unit at the end of Monday’s trading.
Dangote Cement also surpassed Airtel Africa as the most capitalised stock on the local bourse this month, providing investors with an 85.25 per cent appreciation in their investment.
In a statement, Otedola explained his rationale for investing in Dangote Cement, citing its potential to earn foreign exchange and its adherence to Environmental, Social, and Governance principles.
He emphasized the company’s two export terminals as a substantial opportunity for foreign exchange earnings, crucial for Nigeria’s economy, and its pan-African presence as an ideal investment choice.
Otedola also highlighted Dangote Cement’s strong corporate governance and impressive ESG compliance track record as factors for his investment decision.
He further expressed his attraction towards the company’s track record of dividend payments and commitment to sustainable business, stating that his investment reflects his belief in its capacity to provide significant returns and his commitment to shareholder-oriented businesses.
As of February 2023, Dangote Industries Limited held an 85.8 per cent stake in the company. Otedola’s attempted acquisition of over five per cent stakes in Transnational Corporation Plc was rejected in April 2023, leading to his subsequent divestment from the firm.
Garba Kurfi, Managing Director of APT Securities and Funds Ltd, questioned the impact of Otedola’s share purchase on Dangote Cement, highlighting the majority ownership by Dangote and the large investment needed to significantly affect the company.
Financial and economic analyst, Rotimi Fakayejo, attributed the rise in the cement company’s market cap to three factors affecting stock movement, including fundamentals, demand and supply dynamics, and market hearsay, citing Otedola’s previous impact on FBN Holdings shares.
Fakayejo expressed belief in the underpricing of Nigerian shares and projected Dangote Cement’s potential to reach a price above N1,000 in the mid-term.