Nestle Nigeria Plc, the West African nation’s largest food company by market value, advanced to a record high as investors predicted expansion would support the stock and lead to increased dividends.
The shares closed 4.5 percent higher at 790.25 naira in Lagos, Nigeria’s commercial capital, their highest value since January 2002, when Bloomberg began compiling the data. The stock increased for a fifth consecutive day, the longest winning streak since Nov. 30.
Investors “have confidence in the ability of the stock to deliver both capital appreciation and dividend,” Raheem Mohammed, chief executive officer of Kundila Finance Ltd., said by phone from Lagos today. The Nigerian unit of Nestle SA, the world’s biggest food company, said in 2011 it could double in size within three years by investing in major brands, which include Nestle instant coffee and Milo chocolate-malt drink.
Retail investors buying the stock “have jumped on the bandwagon because they believe the rally will continue so they can exit and make profit,” David Adonri, chief executive officer of Lambeth Trust and Investment Co., said by phone from Lagos. “Nobody can predict when the upsurge will stop because when it started, we thought it would stop after a 30 percent rise, but it’s still moving upwards,” Adonri said.
Nestle Nigeria appreciated by 57 percent in 2012 and has risen 13 percent this year. Cadbury Nigeria Plc, a manufacturer of drinks and food products, more than doubled last year and has risen 16 percent in 2013, according to data compiled by Bloomberg .
Net income for the third-quarter through September climbed 63 percent to 15.4 billion naira ($100 million), Nestle Nigeria said on Oct. 31. Revenue rose to 85 billion naira from 70.5 billion naira in the same period in 2011.