Industrial Goods Sector Leads Market with 19% Year-to-Date Growth

Goddy Egene
Investors in the industrial goods sector of the Nigerian Stock Exchange (NSE) are counting their gains as the NSE Industrial Goods Index is leading other indices, even outperforming banking sector.
The NSE Banking Index emerged the best performer in 2017 with 73.3 per cent and had remained top performance at the beginning of the year. However, an analysis of the sector market indicators showed that the NSE Industrial Goods Index is now leading as the first quarter heads to a close.

The NSE Industrial Goods Index, which appreciated 23.8 per cent in 2017, has recorded a growth of 18.9 per cent so far this year. It has outperformed the NSE Banking Index, which has recorded a growth of 9.3 per cent so far.
The NSE Industrial Goods Index was designed to provide an investable benchmark to capture the performance of the industrial sector. It comprises the most capitalised and liquid companies in the industrial sector and is based on the market capitalisation methodology.

Stocks that currently make up the index are: Portland Paints and Products Plc, First Aluminum Plc; CAP Plc; Beta Glass Plc; Meyer Plc; Dangote Cement Plc; Berger Paints Nigeria Plc; Cement Company of Northern Nigeria Plc; Lafarge Africa Plc and Cutix Plc.

An analysis of the constituents stocks showed that only two has negative performance so far while the remaining eight have appreciated. CCNN is leading with 92 per cent, followed by Beta Glass Plc with a growth of 47 per cent, while Cutix Plc garnered 39 per cent. Berger Paints has appreciated by 21.9 per cent, while Lafarge Africa Plc and Dangote Cement Plc have garnered 18 per cent and 15.2 per cent respectively. CAP Plc has recorded a growth of 13.9 per cent, just as First Aluminium Plc has appreciated by 6.0 per cent. The only two laggards are Portland Paints (-4.5 per cent) and Meyer Plc (-2.8 per cent.)

CCNN had also emerged the highest price gainer last year with 90 per cent growth. It was followed by: Beta Glass Plc (+69.23 per cent); Berger Paints
(+32.66 per cent); Dangote Cement Plc (+32.19 per cent); and Portland Paints (+22.22 per cent).
Analysing the sector last year, analysts at Meristem Securities Limited had said the sector enjoyed improved investor confidence as most companies recorded significant gains in their top-line and bottom-line performances.
“Consequently, the positive sentiments sustained on most of the sector’s stocks drove the sector’s performance in the year,” they said.

It is expected that most of the companies, especially, the cement manufacturers would turn in impressive 2017 full results, a factor, analysts said, could be driving demand for the counters.
For instance, Dangote Cement Plc’s revenue as at the nine months ended September 30, 2017 increased by 36.5 per cent to N603.5 billion, from N442.9 billion in 2016. Profit after tax improved from N133.521 billion in 2016 to N193.13 billion in 2017.