Airtel Africa overtakes Dangote Cement with N5.4trn market cap, as buyback scheme triggers hike

 Airtel Africa is now the most capitalised company in the Nigerian stock market, overtaking Dangote Cement, after its share jumped 9.9 percent to hit its highest price in 52-weeks.

The Bharti Airtel subsidiary crossed the N5 trillion mark, the first Nigerian company to attain the height, following a surge in stock value which settled at N1,398.00, against Thursday’s N1271 per share.

With total shareholder investment in Airtel Africa now valued at N5.4 trillion, Dangote Cement – which has held the number one position for years [losing it to MTN Nigeria on few occasions] – takes the second seat, with its market value sitting at N4.44 trillion.

MTN Nigeria is third on the stocks with N3.86 trillion, BUA Cement occupies the fourth spot with N2.36 trillion, while its sister-company, BUA Foods comes next with N1.15 trillion.

What you need to know

Appreciation in Airtel Africa’s stock had trailed the buyback exercise of the company last year, as the scheme saw the network provider repurchase already issued and fully paid for shares from the public.

This increased the shareholding of Airtel Africa to 99.96%, therefore reducing the number of availabile shares for purchase. With few stock to go round, there’s always jostling among prospective investors to lay their hands on such stock – hence the appreciation in share price.

Also, buyback exercise is a method used by companies to influence stock value towards an upward trend, as well as increase its control over its operations, or reduce equity capital held on behalf of shareholders, which is usually costly for publicly listed companies that don’t invest such cash into revenue generating opportunities.

However, the share influence seems to be the case, as Airtel Africa has some growth opportunities lined up since last year, ranging from payment operation, SMARTCASH Payment Service Bank Limited, as well as the super-agent service in Nigeria.