(Nigeria) -- HSBC has cut its recommendations for three of Nigeria’s four biggest cement makers. The insurgency in the country has caused concern over fuel shortages in Africa’s biggest oil-producing nation.
Recent attacks by militants destroyed the pipeline supplies from the Niger Delta oil region. This has cut the output from four state-run refineries and caused Nigeria to rely on imports to meet its needs.
The situation has worsened since November after companies including Exxon Mobile Corp. and Total SA stopped importing oil into the Nigeria because of outstanding debts owed to them by the government.
HSBC cut Benue Cement Co., Nigeria’s biggest cement maker by market value, and Cement Co. of Northern Nigeria Plc ‘s recommendations to “neutral” from “overweight” while Ashaka Cement Plc was reduced to “underweight” from “neutral,”.
Ashaka’s price estimate was reduced to 11 naira from 13.60 naira while Cement Northern’s was cut to 17 naira from 19 naira.
HSBC has also cut its earnings-per-share estimates on Cement Northern by 12 percent, Ashaka by 57 percent, and Lafarge SA’s Nigerian unit, WAPCO Nigeria Plc, by 5 percent.
Even though the three cement companies may suffer in terms of growth due to the cutting down, HSBC has said it is still optimistic on the Nigerian cement industry.
By: Rashmi Kalia (ARI-C NEWS)