Dangote Group’s stock prices have recently fallen, affected by a combination of foreign exchange losses and the Securities and Exchange Commission’s denial of their merger request. This downturn is particularly noticeable in Dangote Sugar Refinery and NASCON Allied Industries.
From May to August 2024, Dangote Sugar Refinery’s shares dropped by 18.67%, from N45.00 to N36.60, due to disruptions in supply chains and fluctuating sugar prices. NASCON Allied Industries saw a 12.57% decrease in its stock price, falling from N37.00 to N32.45 during the same period. In contrast, Dangote Cement experienced a significant 41% rise in its share price, increasing from N419 to N591.
The proposed merger between Dangote Sugar Refinery, NASCON, and Dangote Rice Limited has been put on hold, as stated by NASCON’s company secretary. This decision follows recommendations from the Securities and Exchange Commission, which raised concerns about Dangote Rice Limited’s current non-operational status.
Analysts attribute the stock declines to ongoing forex volatility, inflationary pressures, and increased import costs. Bisi Bakare, a shareholders’ advocate, and Ariyo Olugbosun, a financial analyst, both emphasize that the SEC’s merger decision has further impacted investor confidence.
The Progressives Shareholders Association of Nigeria’s President, Boniface Okezie, noted that similar trends are seen across the industry and called for swift resolution of regulatory issues to boost investor confidence. Despite current challenges, he remains optimistic about the long-term prospects of Dangote’s investments.
