Post Views: 131 The Nigerian Stock Exchange (NSE), on Tuesday recorded perhaps its biggest single daily transaction value in history, when 417,763,711...
The Nigerian Stock Exchange (NSE), on Tuesday recorded perhaps its biggest single daily transaction value in history, when 417,763,711 units of Dangote Cement Plc were traded for N87.764bn, or $236m.
Initial findings showed that parent company of Dangote Cement, the biggest stock on the Nigerian bourse (by market capitalization- accounting for about 36%) sold 416m of the shares, representing 2.3% of the company’s share outstanding in six tranches during off-market deals to the new investors at N210 each.
While the identity of the new investor is yet unknown, the deal involved Meristem Stockbrokers, ostensibly for Dangote Industries Limited, and Stanbic IBTC Stockbrokers, acting for the buyers.
The move, besides freeing some cash for the core investors (Dangote Industries Limited and its owner- Alhaji Aliko Dangote) to invest in other endeavours- particularly agriculture, besides being part of efforts to gradually correct Dangote Cement’s free-float deficiency.
Free-float deficiency means that Dangote Cement does not have up to the minimum 20% of its shares in issue held by the public- both individual and corporate investors.
While Dangote Industries holds 90.93% stake of the company’s 17,040,507,405 ordinary shares, Alhaji Dangote holds 0.16%, leaving the remaining 8.91% for the public, which includes the 1.4% stake sold to Sovereign Investment Corporation of Dubai (ICD) for $300m in 2014 and 1.5% stake sold to South Africa’s Public Investment Corporation (PIC) for $289.3m.
The transaction increases Dangote Cement’s free float to 10.4%, meaning there still need to sell down a further 10% to resolve the deficiency.
Commenting on the deal, vis-à-vis the entire exchange, a stockbroker told INVESTDATA News during a chat that the market is eagerly awaiting the eventual listing of South African telecommunications giant- MTN to reduce the market’s exposure to Dangote Cement, which alone can determine the direction of indicators.
Besides the expected MTN listing, he noted with satisfaction the impressive growth in the share price of Guaranty Trust Bank, which today has a market capitalization of about N1.0tr, which makes it the biggest banking stock, followed by Zenith Bank.