At N8.27tn, Airtel Leapfrogs Dangote Cement, 13 Others as Most Capitalised Stock

Kayode Tokede 

Airtel Africa Plc, Telecommunication giant listed on the Nigerian Exchange Limited (NGX) and London Stock Exchange (LSE) has outpaced Dangote Cement Plc and 13 other blue-chip companies as most capitalised company on the NGX.

The other 13 companies are: MTN Nigeria Communications Plc, Seplat Energy Plc, BUA Foods Plc, Geregu Power Plc, BUA Cement Plc, and Transcorp Hotels Plc.

Others Include; FBN Holdings Plc, Guaranty Trust Holding Company Plc, United Bank for Africa (UBA), Zenith Bank Plc, Aradel Holdings Plc, Transcorp Power Plc, and Oando Plc.

 As of October 25, 2024, the market capitalisation of Airtel Africa stood at N8.27 trillion, followed by Dangote Cement that closed at N8.16 trillion.

Few weeks ago, demand for Dangote Cement on the Exchange impacted on the cement maker stock price to reach N763 per share in its 52-week high, making it the most capitalised company at N13 trillion.  

However, recent events have seen the stock price of Dangote Cement maintaining a flat price of N478.8 per share, giving room for Airtel Africa to take the number spot as most capitalised listed company on NGX as at the close of trade last Friday.

THISDAY analysis of trading numbers showed that the stock price of Airtel Africa has gained 16.6 per cent Year-till-Date (YtD) to close October 25, 2024 at N2,200 per share from N1,887.00 per share it closed 2023, while Dangote Cement also appreciated by  49.7 per cent YtD to close October 25, 2024 at N478.80 per share from N319.90 per share it closed last year.

Despite reporting a decline in profit in half year ended September 2024 results, capital market analysts have attributed increase in Airtel Africa stock price to its fundamentals.

Airtel Africa reported profit after tax of $31million in the half year ended September 2024, caused by $80 million of exceptional derivative and foreign exchange losses (net of tax), arising from the further depreciation in the Nigerian naira during the quarter.

“Airtel Africa’s strong operational performance, driven by customer growth, expanded network coverage, and increased mobile money penetration, was significantly impacted by sustained currency pressures, particularly in Nigeria, resulting in declines in both revenue and profit for the quarter,” said analysts at Cordros Securities.

The telco’s customer base increased by 6.1 per cent to 156.6 million, and data usage per customer increased by 30.9 per cent to 6.6 GBs. Smartphone penetration increased 5.3 per cent to 42.9 per cent.

The stock market has recorded an upward trajectory since the entry of the new administration led by President Bola Tinubu, and it is due to the proactive implementation of reforms such as the removal of fuel subsidy and the liberalization of the foreign exchange market.

Foreign investors and High Network Investors have continued to take positions in these 15 stocks amid Central Bank of Nigeria (CBN) foreign exchange policies as their prices in the past was undervalued on the bourse.

Further findings by THISDAY revealed that BUA Foods is the only company with over N7 trillion by market capitalisation. MTN Nigeria Communications, Seplat Energy, and BUA Cement are the only three companies with market capitalisation of N3.86 trillion, N3.35 trillion and N3.73 trillion, respectively.   

Speaking with THISDAY, the Executive Vice Chairman of Highcap Securities Limited, Mr. David Adonri expressed that gains in Airtel Africa among others largest companies by market capitalisation on the NGX affects the direction of the stock market.

He stated that investors were in the earning season adding that what investors would get from dividends is one of the factors that drove the demand for shares in the stock market. 

He noted that the stock market is defying current political uncertainties because investors are futuristic and the prospect for a yield environment is bright. 

According to him, “Optimists also see strength in the market from the perspective of corporate fundamentals which remain strong despite macroeconomic frailties and assault from misfired public policies.”

On his part, Professor of Capital Market, Nasarawa State University Keffi, Prof. Uche Uwaleke expressed that the Nigerian capital market is over-concentrated with the attendant ‘keyman’ risks, part of what are major barriers to market development.

“This is demonstrated by the fact that only seven out of 155 listed companies account for over 60per cent of equities market capitalization,” he said. He noted that the over 150 issuers base is relatively small.

“Many eligible companies including multinational companies particularly in the telecom and oil and gas sectors remain unlisted. Out of the over 4 million companies registered by the Corporate Affairs Commission as at 2020, only 155 companies on NGX, and less than 50 on NASD and nine on the NGX Growth Board,” he said.

He, however, recommended that privatized government enterprises be listed on the NGX for the capital market to develop and support the nation’s development.

While investor sentiment suggests that the Nigerian stock market’s recent peak is not a mere flash in the pan, capital market analysts stress the importance of ongoing stability, security, and continued economic reforms. The historic high of the Nigerian stock market has created ripples in the global financial arena, with investors keenly observing the performance of blue chip companies.