Thursday, September 23, 2021/7:05 PM/By Adaeze Nwachukwu, Proshare Research/Header Image Credit: EcoGraphics
Proshare Nigeria Pvt. Ltd.
The cement market rebounded in H1 2021 Post COVID-19, supported by increase demand despite the reduction in real disposable income. The H1 2021 performance of the major players in the product market supports this argument.
The technical analysis provides investors insight in evaluating and identifying trading opportunities majorly the historical movement of the share price of an equity. In the case of the big players in the cement market, the price of the stocks was correlated to check how risky having the stocks in an investment portfolio is and take a decision accordingly. The correlation between DANGCEM and BUACEMENT was negative at -0.37, this means that their prices generally moved in the opposite direction. However, for DANGCEM, BUACEMENT, and Lafarge Africa, both pairs had positive and weak correlation at 0.25 and 0.37 respectively.
Investors seeking to establish a well-diversified portfolio will frequently seek out equities with negative correlation, which means that if one portion of the portfolio falls in value, others must rise.
Movements of DANGCEM’s Share Price and ASI Index
The Year-to-date (YTD) movement of DANGCEM’s share price has been volatile, with the price of the equity reaching its lowest in May 2021 and having a bullish flag between June and August. With the NGX All Share Index (ASI), the share price of the company have not moved in the same direction for most of the trading session under review, the correlation between them is positive but weak at 0.23.
One major factor that has driven increased trading of the stock has been the share buyback program by Dangote Cement Plc which started in December 2020. The Group has completed Tranche 1 of the program and a renewal of the program commenced on July 9, 2021.
The YTD return for DANGCEM is 0.00% as of 3 September 2021 and has an average price of N228.72 during the period ( see chart 1 below ).
Chart 1 : YTD Movement in DANGCEM’s Share Price and ASI Index as of 3 rd Sept 2021 Proshare Nigeria Pvt. Ltd. Source: NGX, Proshare Research Movements of WAPCO’s Share Price and ASI Index Lafarge Africa’s share price movement has been relatively flat and inconsistent with the movement of the ASI. The company’s stock saw increased trading in Q1 2021, this was after the company said it […]