Investors struck two cross deals for the transfer of about 94.7 million shares of Dangote Cement valued at N23.12 billion yesterday, in another transactions that highlighted the widening ownership structure of Africa?s largest cement producer.
The transactions yesterday represented 0.56 per cent of the total issued outstanding shares of 17.04 billion ordinary shares of 50 kobo each of the most capitalised quoted company at the Nigerian Stock Exchange (NSE).
Trading documents obtained by The Nation indicated that a cross deal was struck for 22.625 million ordinary shares of 50 kobo each of Dangote Cement at N241.50 valued at N5.464 billion while another cross deal was struck for 72.071 million ordinary shares of 50 kobo each at N245 per share worth N17.657 billion.
The two deals were done as an off-market, negotiated cross deal, thus it was not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside the floor of the NSE.
The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.
With other non-voluminous transactions, total transactions on Dangote Cement stood at 95.479 million shares valued at N23.31 billion. This lifted total turnover at the NSE to 462.67 million shares worth N26.81 billion in 5,090 deals.
Foreign investors had in mid November 2017 snapped up 0.75 per cent equity stake in Dangote Cement in a deal valued at N27 billion. The foreign investors had struck a deal for the exchange of 128.56 million ordinary shares of 50 kobo each at N210 per share. Reliable sources indicated that the foreign investors were from Dubai, United Arab Emirates (UAE).
Dangote Industries Limited (DIL), the majority core investor in Dangote Cement Plc, plans to sell shares valued at more than N200 billion in a partial divestment that will widen the float for Dangote Cement. DIL is owned by Africa?s richest billionaire, Alhaji Aliko Dangote and it owns more than 90 per cent majority equity stake Dangote Cement, Nigeria?s most capitalised company.
The Nation had exclusively reported that Dangote Cement had secured regulatory approval for block divestment of 852.03 million ordinary shares of 50 kobo each. The block divestment represents 5.0 per cent of the issued share capital of Dangote Cement. Dangote Cement accounts for more than 30 per cent of the total market capitalisation of quoted equities.
A source in the know had told The Nation that DIL plans to undertake the block sale in tranches and that the sale of 416 million ordinary shares in the third quarter of this year was the first tranche of the N200 billion divestment. About 2.44 per cent equity stake in Dangote Cement was swapped under pre-arranged transactions earlier this month. A report on the transactions indicated that six deals were struck for the transfer of 416 million ordinary shares of 50 kobo each at a below-the-market price of N210.
South African government had in June 2013 bought into Dangote Cement. The South Africa?s government, through its wholly owned investment company, Public Investment Corporation of South Africa (PIC), had acquired 1.5 per cent equity stake in the Nigerian cement group to emerge the second largest equity investor.
A reliable source had said the block divestment might not be unconnected with a regulatory requirement to free more shares of the cement company for ownership and trading by minority investors.
Meanwhile, Nigerian equities recorded a marginal recovery yesterday, halting a two-day profit-taking downtrend. Benchmark indices at the Exchange indicated a marginal day-on-day gain of 0.03 per cent, equivalent to net capital gain of N3 billion.
Aggregate market value of all quoted equities rose from N13.553 trillion to close at N13.556 trillion. The All Share Index (ASI) increased marginally from 38,913.99 points to close at 38,924.63 points. The average year-to-date return improved marginally to 44.84 per cent.
?We expect positive performance in coming session, with bargain hunting to set in as the market moves from the oversold region,? FSDH Securities stated.