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Bulls Return as Dangote Cement, Transcorp Gain at Stock Market

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Stock - Investors King
  • Bulls Return as Dangote Cement, Transcorp Gain at Stock Market

The Nigerian equities market closed in the green yesterday after opening on negative note the previous day.

Price gains by some highly capitalised stocks such as Dangote Cement Plc, Transcorp Plc, Guinness Nigeria Plc and Nigerian Breweries Plc boosted the performance. The Nigerian Stock Exchange (NSE) All-Share Index rose by 2.23 per cent to close higher at 25,129.27, while market capitalisation

Price gains by some highly capitalised stocks such as Dangote Cement Plc, Transcorp Plc, Guinness Nigeria Plc and Nigerian Breweries Plc boosted the performance. The Nigerian Stock Exchange (NSE) All-Share Index rose by 2.23 per cent to close higher at 25,129.27, while market capitalisation closed at N8.697 trillion.

However, Transcorp Plc led the price gainer’s chart in percentage terms with 7.14 per cent, trailed by Guinness Nigeria Plc and Dangote Cement Plc with 4.9 per cent apiece.

The growth recorded in the market is believed to have been bolstered majorly by Dangote Cement, which has the highest capitalisation in the market.

The company last week declared a dividend of N8.50 per share for the year ended December 31, 2016. According to the audited results of the leading cement manufacturing firm, revenue grew by 25 per cent from N492 billion in 2015 to N615 billion in 2016. Gross profit stood at N291 billion, up from N289 billion in 2015. A further analysis of the results showed that administrative expenses rose by 12 per cent to N36.7 billion in 2016, from N32.5 billion in 2015.

Selling and distribution expenses followed similar trajectory, jumping by 54 per cent from N53.5 billion to N82.6 billion, depressing profit from operating activities to N182 billion in 2016, from N208 billion in 2015. Financing costs rose by 14 per cent to N45 billion, from N33 billion, making profit before tax to be at N180 billion as against N188 billion in 2015.

However, a tax credit recorded by the company lifted its before after tax to N187 billion from N181 billion in 2015.

Commenting on the results, the Chief Executive Officer of Dangote Cement, Mr. Onne van der Weijde said: “It was a challenging year for many African economies but we achieved sales and revenue growth of 25 per cent and consolidated our position as Africa’s leading producer of cement. Sales from Nigerian operations increased by 13.8 per cent to nearly 15.1metric tonnes(Mt), at a growth rate far higher than the country’s GDP, which fell in 2016.

“The New Year has started well and we expect much higher profitability in Nigeria in 2017, even though we may not see the volume growth we achieved in 2016. I am confident that we will deliver an even stronger performance in 2017 as we increase market share and extend our reach across Africa,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Crude oil

Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Energy

NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade

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Mele Kyari - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.

Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.

Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.

In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.

Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.

He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.

Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.

In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.

Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.

The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.

As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.

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