The stock lost 5 percent to close at 18.05 naira in Lagos, Nigeria’s commercial capital, the biggest drop since Oct. 16. About 1.4 million shares, or double the three-month moving average, traded, according to data compiled by Bloomberg.
Dangote Cement, Africa’s biggest producer of the building material, shut its plant in Gboko in central Nigeria because an influx of imported cement had made it uneconomical to continue producing, Anthony Chiejina, a spokesman for the company said today by phone from Lagos. The country’s southeast served by the Gboko plant has seen a “massive importation and dumping of low-quality, cheap cement,” he said.
“The news of a glut in the market could have led to the sell-off on Ashaka,” Pabina Yinkere, head of research at Lagos- based Vetiva, said today by phone. Dangote’s shares were unchanged probably because Gboko “is the smallest of its plants, Yinkere said. Dangote has the capacity to produce 19.25 million metric tons of cement a year, to which the closed plant contributed 4 million tons.
Ashaka’s net income for the nine months through September rose to 3.7 billion naira ($23.6 million) from 2.46 billion naira a year earlier, the Gombe, northern Nigeria-based company said on Oct. 29. Revenue rose to 16.5 billion naira from 15.8 billion naira.
Ashaka’s price has risen 60 percent this year, compared with a 28 percent increase in the Nigerian Stock Exchange All- Share Index. (NGSEINDX)
To contact the reporter on this story: Vincent Nwanma in Lagos at firstname.lastname@example.org
To contact the editor responsible for this story: Dulue Mbachu at email@example.com