After a few days that MTN Nigeria became the most capitalized company on the Nigerian Stock Exchange (NSE), Dangote Cement has regained the top position.
The increase in Dangote Cement’s market capitalization was driven by its share price which hit N166 after from N164.50. At the end of yesterday’s trading, Dangote Cement’s market capitalization pegged at N2.83 trillion, well above MTN Nigeria’s N2.77 trillion.
Dangote Cement is owned by Africa’s richest man, Aliko Dangote, while MTN Nigeria is a subsidiary of South African telecommunications giant, MTN Group. The two companies make up the trillion-naira club, which includes Nestle.
It took MTN Nigeria three months to surpass Dangote Cement which had been the company with the highest capitalization for some years. MTN Nigeria, however, closed trading yesterday, August 21, 2019, at N136.
Why market cap is important: Market cap is the value of a company on the stock market, and it is one of the factors that attract investors. Instead of using the calculation of sales or total asset figures to determine a company’s size, the investment community makes use of the market cap.
Recall that MTN Nigeria had agreed to list on the NSE after the Nigerian Communications Commission fined the company N1.04 trillion for the deactivation of more than five million unregistered SIM cards in 2015.
The Commission later reduced the fine to N330 billion after much negotiation and diplomatic intervention. The reduction was, however, on the condition that MTN Nigeria would list on the NSE.
On May 31, 2019, MTN Nigeria concluded payment of the N330 billion fine, and also listed on the country’s bourse on May 16 in fulfilment of the agreement.