Building Materials Stock

[Charles O. Nwaiwu]

Considering the Nigerian Government Reform Policies on the importation of cement into the country, and the consequent positive reaction of some corporate bodies who have come together to set up Mega Cement Factories, dont you think that long term investment in the cement stocks may be very rewarding?

[blackgeneral]

Obajana Cement to be listed on the NSE
By Mishack Okpara

President of Dangote Industries Limited (DIL), owners of Obajana Cement, Alhaji Aliko Dangote has disclosed that the cement firm may soon be listed on the Nigerian Stock Exchange. This would bring to two the number of cement companies within the DIL group to be listed on the Exchange. The first is Benue Cement Company (BCC) in which DIL acquired federal government’s holding of 35.39 percent shares and emerged as the core investor following the privatization of the company.


Addressing Stockbrokers and the Financial Press during a visit to BCC plant in Gboko, Dangote said Obajana plant, which has a production capacity of 7.5 million tones of cement per annum is the largest in the country. He noted that the entire cement production within the DIL group would be over 10.0 million tones by the time the upgrading of Benue Cement Company (BCC) is completed and its output capacity raised to 3.0 million tones.


Commenting on the apparent scarcity of BCC shares, Dangote said his organisation was ready to dilute its holding so as to bring in more new investors into the company and boost its market liquidity.He announced that in the current financial year there are plans to pay dividend to shareholders of BCC who have been denied of returns since the past 12 years. He based this position on the nine months performance during which recorded a turnover of N4.0 billion. The company also recorded a gross profit of N2.2 billion within the period.

It would be recalled that Dangote had announced at the signing ceremony for N60 billion syndicate multiple credit facilities for the group by a consortium of banks led by the First Bank of Nigeria Plc that six of its companies would be listed.

[webadmin]

Charles have you invested in Cement stocks yourself?

[Charles O. Nwaiwu]

Yes I have invested in cement stock before. I started with 15,000 units of WAPCO shares about 3 years ago. WAPCO was a corpse then. No one wanted to buy a corpse. It had a very high debt profile then. But the debt was for the construction of the ultra mordern Ewekoro Plant. When last year WAPCO issued Rights, I also applied for 35,000 units at 8 Naira/share. Just last week WAPCO went to an all time high of about 68 Naira/share. The secreet is in studying the industry and not in following the gyrations of daliy stock prices.

[Akusoba Chris]

i like your idea pls keep it up!!!

[windywendy]

Yes charles, you're absolutely right about the way to invest -- i.e studying the industry rather than following the gyrations of the market. I too invested in BCC last year when the factory was closed down and there was no production for about a year. My broker discouraged me saying that the company was dead, there was too much controversy etc. But then during my research, I found that Dangote had borrowed money from the IFC (arm of the Worldbank) to invest and that the reason the company was closed down was simply due to restructuring. All of this information, coupled with the fact that the govt was banning the importation of cement just made it too good a deal to pass up. I bought 85,000 units at 4.10 and made 10times my initial investment -- Now that's what I call a 10-bagger !! Similar thing happened with Nampak, formerly CMB. Previously dead company that got acquired by the nampak SA group and began restructuring. I bought at less than N1 and made over 3 times my money all within 18months. Nothing beats good old research . Sometimes though, staying close to your broker and keeping your ears to the ground with regard to your companies helps also.

[blackgeneral]

Thumbs up to you windywendy. Nothing beats good old research indeed. Money always goes to those who do their homework .

I like buying decesions, like yours, based on good facts, not people who run from one public offer to the next. Sheeeesh, the market is so full of public offers nowadays, and many of them,I wouldnt touch.

[c kenneths]

Thanks Charles, for your educative advice . But that is now in the past, which stock have you analysed lately, and advise your pals to invest in ?

[forumasto]

Hi guys..

I think this forum is a pretty neat idea.

I am just thinking of going into stocks myself and i would like some tips.

Also what stocks do u recommend now, windywendy and have u ever been burnt at stocks before.

thanks in advance.

[dapo]

Guys I have just bought into CCNN at 13.19naira and it seems to be doing well so far . Profit of 7.58 per share so far, so its been rewarding for me, it could even get better if the Edo cement factory can take off soon, but there seems to be loads of trouble regarding the land where the limestone for the cement would come from.Obajana, I am waiting for rather impatiently ,its gonna be a cracker of a share.

[windywendy]

@forumasto, Yes I have been burned in stocks before -- I once bought heavily into AP and subsequently there was all the news about their true financial state and I ended up selling at a 35% loss. But I have made more money than I have lost. For instance this year alone, I've made over N6m on my new investments, which represents over 100% of the amount I invested in nov. 2005.

I believe that if you do your homework properly, you'll gain much more than you lose.

[Joseph]

Hi people,
I just join the house about 20 minutes ago and I am enjoing this. Before I proceed any further let me give a quick introduction of myself without boring the house.
I dont know jack about financial issues, I have lost a lot of money over the past three years but I am not deterred. I was just surfing the web trying to learn something about stock/shares when I stumbled on this forum (thank GOD for that!).
Having read a lot for the past twenty minutes, I am confident that with your help my fortune will change for the better.
Now to the main thing, I want to invest some money on stock this month/November and double same in about 3-6montms time. Is this feasible and what share should I buy and why.

[Joseph]

Hi people,
I just join the house about 20 minutes ago and I am enjoing this. Before I proceed any further let me give a quick introduction of myself without boring the house.
I dont know jack about financial issues, I have lost a lot of money over the past three years but I am not deterred. I was just surfing the web trying to learn something about stock/shares when I stumbled on this forum (thank GOD for that!).
Having read a lot for the past twenty minutes, I am confident that with your help my fortune will change for the better.
Now to the main thing, I want to invest some money on stock this month/November and double same in about 3-6montms time. Is this feasible and what share should I buy and why.
Thanks in advance

[paragon]

Hi Joseph,
my name is Chuks, one of the editors of this site. Yes you can invest in some building materials companys, but all we can do is to advise you and then you choose what will go down well with you.
presently , some companies on the exchange with good returns include Benue Cement Company, WAPCO, Ashaka Cement nad Cment Company of Northern Nigeria. Yoor choice of investment depends on the kind of returns you are expecting.
from what i know, the prices of some stocks drops during this period because people need money to travel and prepare for the mew year, so they sell off some of their shares so now is a good time to buy.
I cannot give you all the info you need here, so mail me at chuks@stockmarketnigeria.com so we'll fix something up for you.

take care.

[ghm]

My people,

I wish to buy into this sector but I am scared they are damned too high/expensive these days.

ASHAKA 72.00
WAPCO 76.38
BCC 47.50
CCNN 21.57

Do you see them rising much beyond these prices?

[c kenneths]

GHM,
Yes I think is much hope of price appreciation on these stocks, WAPCO and ASHAKA because of the bonus rumour, BCC because of increased profitability, but CCNN I dont really know.

[Stockbear]

Dangote in the limelight once again!

BusinessDay
April 23rd, 2007
Why cement is costly - Dangote

Increased in demand of cement in Nigeria and ever increasing operational costs are the reasons for the recent high price of cement in Nigeria, Knut Umvoen Group Managing Director (cement) said at a press interactive session in Lagos yesterday.

Cement price per bag went up recently to between N1700 to N1800 from its former level of N1350.

"Dangote’s ex-factor prices are N1130 and N1150 in Lagos and Port Harcourt respectively," Umvoen said.

Total demand for cement in Nigeria is 10 million metric tonnes per annum whereas current supply by existing plants excluding Dangote’s Obajana Cement plant is 7 million metric tonnes per annum, Umvoen said. Dangote Group accounts for 5 million metric tonnes.

Obajana, according to him, which currently produces 5000 metric tonnes per day on one line, will add 5 million metric tonnes to Nigeria’s total cement production when in full production soon.

http://www.businessdayonline.com/?c=132&a=12867