
Dangote Cement, Nigeria’s leading cement manufacturer, hit a 53-week low on Monday, closing at N400 per share. The stock, which suffered a near 10 per cent drop in value, has now lost over 20 per cent of its share price since the start of the year.
The decline helped to wipe out approximately N1.45 trillion in market capitalization last week, stoking investor concerns and reigniting debates over valuation and market dynamics.
The bearish trend for Dangote Cement began earlier in the year, with its share price sliding from N478.80 on January 1 to its current position.
Analysts remain divided on the causes, with some attributing the drop to overvaluation and others citing economic pressures and portfolio adjustments.
Teslim Shitta-Bey, an analyst at Proshare Nigeria, dismissed claims of overvaluation, instead pointing to portfolio rebalancing and broader economic challenges affecting construction activities.
“The slowing construction sector, fueled by weaker economic growth, has triggered profit-taking among investors,” he noted. Similarly, Tajudeen Olanrewaju, Managing Director of Wyoming Securities Ltd, highlighted a potential “market correction” after months of perceived overpricing.
“Investors found it increasingly difficult to sell at prevailing prices, leading to discounted sales that triggered last week’s sharp decline,” he explained.
The broader equities market has also faced liquidity challenges, exacerbated by delays in public offers and an unusual year-end rally that failed to buoy large-cap stocks like Dangote Cement.
Analysts warn of continued volatility as investors grapple with weak economic fundamentals and the lingering effects of a delayed rally.
Market participants are keeping a close watch on developments, with many hoping for stabilization as January progresses. For now, the struggles of Dangote Cement serve as a stark reminder of the vulnerabilities in Nigeria’s equities market.