Nigerian Exchange market adds ₦833 billion as cement shares rally

The Nigerian Exchange (NGX) recorded a robust capital appreciation of ₦833 billion this week, largely driven by a significant rally in cement sector stocks. Cement manufacturers led the market gains, reflecting increased investor confidence in construction activity, government infrastructure spending, and resilient demand in both domestic and regional building markets.

The market-wide upswing was evident across key indices, with the All-Share Index climbing by nearly 2.5% and market capitalization expanding from around ₦42.0 trillion to approximately ₦42.8 trillion. Cement stocks spearheaded this performance, contributing over 60% to the overall value gain. Nigerian cement majors, including Dangote Cement, BUA Cement, and Lafarge Africa, posted double-digit share price increases in the days leading up to the rally.

Dangote Cement surged by 12.8%, gaining over ₦450 billion in market value alone, while BUA Cement added 10.3% to its share price. Lafarge Africa also saw gains, albeit more modestly at around 7.5%. Analysts attributed the cement stock surge to a combination of sustained local demand, stabilising forex environment, and investor expectations of improved margins driven by operational efficiencies and stable input costs.

“It’s evident that investors are positioning for an uptick in infrastructure industry performance,” said a stock market strategist. “Cement producers are directly tied to government contracts and private construction activity, and the early signs of improved liquidity, alongside controlled inflation, have triggered renewed buying interest.” Indeed, Nigeria’s ongoing commitment to expand roads, rail, housing, and energy infrastructure has underpinned expectations of stronger revenue streams for cement manufacturers.

Additional market sectors also participated in the rally, albeit to a lesser extent. Consumer goods stocks benefited from eased food inflation, leading to gains for major players in the milling and packaging segments. Banking stocks recorded modest appreciation, supported by steady foreign exchange ratios and a more stable yield curve, which improved margins for lenders. Energy and industrial stocks saw marginal gains, but their contributions to total value accretion were small compared to cement.

Volume metrics revealed heightened trading activity across cement counters, with Dangote Cement accounting for nearly 35% of total market trades by value during the rally. This concentration highlighted the central role of cement stocks in driving liquidity and shaping market sentiment on the NGX forward.

Market analysts revealed that improved policy signals from the Central Bank of Nigeria (CBN) and fiscal reinforcement of infrastructure budgets have greatly influenced investor expectations. Although headline inflation remains near 22%, its decline and active fiscal spending have shaped a more positive macroeconomic outlook. The interim budget’s inclusive allocation to roads, rail corridors, and housing provided additional backing to the rally, underpinning market enthusiasm.

Institutional investors also played a pivotal role in the capital inflow, with pension funds and fund managers increasing their positions in long-dated cement stocks. Portfolio managers cited the defensive nature of cement businesses and their dividend-paying history as key attractions. Retail investors, too, joined the rally following positive media coverage and broker reports flagging the sector as an attractive mid-term opportunity.

Despite the rosy outlook, some market watchers urged restraint. They cautioned against overconcentration, noting that cement stock valuations are now entering more expensive territory. Price-to-earnings multiples for sector leaders have risen to near two-year highs, raising valuation concerns. They advised investors to monitor developments in freight costs, import tariffs on clinker, regional economic health, and global cement price trends—all factors that could affect profit margins.

Commentators also warned of potential risks stemming from exchange rate volatility. Cement production is heavily reliant on imported inputs such as fuel, spare parts, and packaging. Depreciation of the naira or disruptions in forex liquidity could increase input costs and erode margin expectations, potentially reversing market gains. As a result, analysts recommended maintaining diversification across the broader market and avoiding undue concentration in any single sector.

Looking ahead, the market’s next moves may depend on two key variables. First, the progression of infrastructure contract awards—especially in road and rail sectors—will signal whether demand growth is sustained. Second, macroeconomic stability, especially in inflation control and foreign exchange markets, will play a key role in influencing investor risk appetite. A bullish policy environment could encourage further sector rotation, while renewed uncertainty may dampen sentiment.

Overall, the NGX’s ₦833 billion market gain represents a significant milestone—demonstrating investor belief in Nigeria’s construction-led growth premise and cementing the sector’s central position in the exchange’s performance. Stakeholders have, however, called for cautious optimism, emphasizing that economic fundamentals need to align with sentiment to sustain long-term gains.

If infrastructure funding materialises as expected and macroeconomic indicators hold steady, cement stocks may remain a reliable engine of market growth. For now, the rally signals renewed investor confidence in Nigeria’s foundational industries—and the role of policy in translating economic ambitions into share price resilience.