Three NGX-listed cement businesses had positive sentiment in January 2023, resulting in a N175.727 billion gain at the end of trading.
Analysis of trade data from firms including Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc revealed this.
Shares of these cement companies continued to enjoy a favorable mood as investors maintained purchasing pressure on the equities in anticipation of significant returns on investment notwithstanding the buildup to the 2023 general elections and interest rate rises.
It is anticipated that the government would grant more infrastructure projects, which will increase revenues and return on investments, leading market experts to predict that industrial product stocks might be promising this election season.
The cement industries are recommended as solid buy-and-hold investments for the future by this group.
Profit Analysis
Our research shows that during the month of October, Dangote Cement Plc, one of the largest Cement makers listed on the industrial products sub-sector of the Nigerian Exchange Group Plc (NGX), gained around N100.539 billion.
As of the end of the review period, the cement stock was trading at N266.90 per share and a market value of N4.548 trillion, up from the opening price of N261 and a market capitalization of N4.447 trillion in January.
On the NGX, BUA Cement Plc, which is classified as a component of the industrial goods sector, increased in value by around N57.570 billion during the same time frame.
Since trading operations began on January 4, 2022, its stock price has increased by 1.74%, from N97.75 per share and N3.310 trillion in market capitalization to N99.45 per share and N3.367 trillion in market capitalization.
The market capitalization of Lafarge Africa increased by N17.618 billion, or 4.58%, from the beginning of the trading year, when it was valued at N24.00 per share and N386.687 billion.
Kasimu Garba Kurfi, CEO of APT Securities and Funds Limited, recently told Nairametrics that the incoming administration is beneficial for industrial products equities like cement businesses.
The future president of Nigeria, he said, is widely anticipated to fix the country’s ailing infrastructure, which would increase demand for cement.
Other Related News
Market value of listed cement Companies rose to N1.109 trillion In 2022
Nigeria’s most valuable businesses as of January 2023
Abdul Samad Rabiu, The Billionaire, Net Worth and Biography
Meet Arvind Pathak: The Newly Appointed Dangote Cement GMD
It is expected that the government would award more contracts for infrastructure projects, which will boost earnings for cement firms trading on the Exchange.
As he put it, “approximately 26 Governors who will be arriving for the first time to establish a government in their various states are expected to do the same and come up with new initiatives that would enhance the operations of industrial good enterprises.”
Johnson Chukwu, managing director of Cowry Asset Management Limited, has predicted that political officeholders would hastily finish road and infrastructure projects as part of a campaign tactic to regain power.
This, he said, would lead to more demand for industrial materials and higher profits for such businesses. “Therefore, investors should keep an eye on industrial goods firms throughout the election time,” he advised.
Cement companies are expected to raise prices in 2023 as analysts at Cordros at Securities Limited predict that price increases would outweigh volume declines in terms of revenue growth.
We anticipate that companies in the sector would raise prices irregularly as a means of protecting profit margins in light of growing energy costs and greater challenges in sourcing raw materials.
Assuming a smooth handover to the new administration by the end of H1-23, we anticipate an uptick in public-private sector investment in housing and construction, which in turn should boost cement consumption.
They predicted a revenue increase of about 53.3% for industry participants by 2023E.
