Airtel Africa, a member of the SWOOT (Stocks Worth Over One Trillion) index, has surpassed Dangote Cement, the cement behemoth controlled by Africa’s richest man, Aliko Dangote, as the most capitalized firm listed on the Nigerian stock exchange.
On Friday, the shares of Airtel Africa, Nigeria’s second-largest telecoms operator, crossed the N5 trillion barrier for the first time, closing at N5.4 trillion.
This is also the first time a Nigerian company’s market capitalization has crossed N5 trillion.
Airtel first surpassed Dangote Cement as the most capitalized stock on Thursday after it gained 10% closing at N1,271. Dangote Cement in contrast fell on Thursday by 8.53% from its 52-week high of N284.90 to close the trading session at N260.60, on profit-taking by investors. This saw Dangote’s market capitalization fall by N414.1 billion, from N4.86 trillion to N4.44 trillion. It remained flat on Friday, January 28.
Airtel on Friday gained another 9.9% taking its share price to N1,390 as it continued its bullish run. Airtel’s share price has now gained over 46% this year on the back of improved operational performance, share buybacks, and investor sentiments.
Airtel Nigeria has been notably expanding its business beyond just the offerings of telecommunications services. Last year, the telco giant got an approval-in-principle to launch its payment service arm in Nigeria, known as SMARTCASH Payment Service Bank Limited.
Asides from this, it also announced last year that its subsidiary, Airtel Mobile Commerce Nigeria Limited, was granted approval in principle by the Central Bank of Nigeria (CBN) to operate as a super-agent in Nigeria.
Although these are signs of an evolving business, another factor that may have caused the rally could also be the fact that after announcing the completion of the minority share buyback in December 2021, Airtel Africa now owns 99.96% of the total shares outstanding. This means a share supply shock can be easily triggered with only a few stocks in circulation.
Dangote Cement has also been busy in 2022. Its share price has grown by 1.40% from N257 at the start of the year, to currently stand at N260.60. Dangote underwent the second trench of its share buyback where a total of 126,748,153 shares, representing 0.74% of the company’s issued shares were bought back from the open market, purchased for a total of N35.1 billion, at an average price of N276.89.
Another reason for the drop seen yesterday could be investors reacting to the company’s request for a waiver, to not to file its Fourth Quarter Unaudited Returns within thirty days of its period end, but to file its Annual Audited Financial Statements within sixty days of its year-end.
Although this is within the rights of the company, historically, the stock exchange has always reacted negatively to late filings of audited reports.
In today’s trading session so far, Dangote Cement remains unchanged at N260.60 and Airtel is currently trading N1,398, up 9.99%, the maximum price the share price can gain in today’s trading session.
