Investors in Nigeria’s two largest cement producers, Dangote Cement Plc and BUA Cement Plc, faced significant losses in the third quarter of 2024, as both companies experienced a steep decline in their stock prices.
Between July and September, the stock prices of these firms, which are the most capitalized cement companies on the Nigerian Exchange (NGX), fell by a combined 20.26 per cent, resulting in a loss of N3.25trn in market value.
The market capitalization of Dangote Cement and BUA Cement dropped from N16.04trn at the beginning of July to N12.79trn by the end of September, contributing significantly to a broader sell-off in the Nigerian stock market.
The broader decline in stock prices of these two leading cement firms has had a notable impact on the Nigerian stock market, reflecting investor concerns amid a sell-off trend.
However, their overall performance for the year remains positive, suggesting resilience in the face of Q3 challenges.
This decline was one of the key factors that drove a 1.49 per cent drop in the NGX during the same period, with the All-Share Index falling to 98,558.79 points.
An analysis by NewsNGR revealed that Dangote Cement’s stock price declined by 18.99 per cent, falling from N656.70 per share at the start of Q3 to N532 per share by the close of trading on September 28.
Consequently, its market capitalization dropped from N11.19trn to N9.065trn. Similarly, BUA Cement experienced a more pronounced decline of 23.18 per cent, with its stock price dropping from N143.20 per share on July 1 to N110 per share by the end of the quarter. This reduced its market capitalization from N4.85trn to N3.73trn.
Despite the challenging third quarter, both Dangote Cement and BUA Cement have maintained strong overall performance throughout 2024.
Dangote Cement, which started the year with a share price of N319.90, has gained 49.7 per cent on its price valuation, closing at N478.80 per share on October 7, 2024.
BUA Cement, which began the year at N97.00 per share, has also posted a 13.4 per cent gain, closing at N110.00 per share on the same day.
The sharp decline in the third quarter underscores the volatility in the Nigerian stock market, particularly within the cement sector, which has been affected by broader economic concerns and sector-specific challenges.
However, the strong year-to-date performance of these two firms indicates their resilience and market strength, despite the temporary setback.
Both companies remain key players in the Nigerian economy and the construction sector, and their ability to recover from this short-term decline will be closely watched by investors in the months ahead.