Five of the wealthiest men in Nigeria have cumulatively lost a whooping N288.5 billion in the stock market rout this year. The local bourse has returned -8.48 percent year to date (YTD), translating to a loss of N659 billion in market capitalization this year alone. In essence, up to 44 percent of total market loss this year was suffered by just 5 wealthy Nigerians.
The Nigerian billionaires are majority shareholders in some of the largest companies in the country, they include: Jim Ovia, Oba Otudeko, Tony Elumelu, Femi Otedola and Aliko Dangote. According to Forbes 2018 wealthiest men ranking, these five entrepreneurs are among the top 10 richest in Nigeria.
BusinessDay analysis was based on the billionaire’s current stock holdings in publicly traded companies and the changes in the stock prices at the beginning of the year and closing price as at yesterday.
Aliko Dangote, Nigeria’s richest man, was the biggest loser as the value of his stockholdings in publicly traded Dangote Group of companies declined by N251.8 billion, representing about 87 percent of total losses among Nigeria richest shareholders.
Up to N248.4 billion of the loss suffered by Dangote was from the decline in the stock of Dangote Cement this year which is currently down 7 percent since the beginning of the year. Another N3.4 billion was lost from his stake in Dangote Sugar while the billionaire further lost N2.97 billion from his stake in Dangote Flourmills.
There was some relief for the self-made billionaire as share price appreciation in Nascon helped increase his wealth by around N2.96 billion this year. As at market close yesterday, Dangote stake in his companies had declined from N3.6 trillion at the beginning of the year to N3.3 trillion.
Jim Ovia, Chairman of Zenith Bank, whose stake in Zenith bank as at yesterday was worth around N 103.68 billion, saw his wealth decline by N11.95 billion this year as Zenith bank share price dropped -11.3 percent. Ovia directly and indirectly owns a stake of around 4.5 billion shares in Zenith bank, making him the second richest shareholder in Nigeria after Aliko Dangote.
Tony Elumelu, Chairman of UBA and Transcorp, saw his shares in both companies decline in value by 15 percent and 25 percent respectively in the first eight months of the year. Elumelu’s owns about 2.3 billion shares in UBA and another two billion shares in Transcorp Inc.
Elumelu suffered N3.7 billion capital loss in his UBA holdings as his stake declined from N23.66 billion in January to N20 billion yesterday. His stock market woes were further compounded by the poor performance of Transcorp this year. The stock declined by 25 percent this year, causing his wealth to further drop by around N374 million as his Transcorp stake declined from N1.5 billion as at the beginning of the year to N1.12 billion yesterday. Cumulatively, Elumelu’s holding in UBA and Transcorp is now N21.2 billion from N25.1 billion earlier in the year.
Oba Otudeko, Chairman of Honeywell group and FBN Holdings Plc, with a total shareholding of about 5.3 billion units in Honeywell group recorded a loss in share value of N2.73 billion as the stock declined 23.2 percent. As a result, Oba Otudeko’s Honeywell stake dropped from N11.8 billion to N9.04 billion as at market close yesterday.
On the flip side, the share price rally in FBN holdings helped to compensate for losses suffered in Honeywell. The billionaires’ total shareholdings of 538 million units in FBN holdings appreciated in value by nine percent to stand at N408.9 million as share prices of FBNH rallied from N8.79 to N9.55 since the beginning of the year. Cumulatively, Oba Otudeko’s stake in FBNH and Honeywell dropped from N16.4 billion at beginning of the year to N14.1 billion yesterday.
Among the worst performing stocks in the market this year is Forte Oil which is down 43 percent.
Chairman of Forte Oil, Femi Otedola has seen his fortune decline by N18.4 billion as the market rout eroded the value of his holdings in the oil company from N43.04 billion in January to N24.6 billion yesterday. Otedola boasts a total holding of 1.02 billion units of shares in Forte oil plc.
The market sell-off appears to be far from over as macroeconomic headwinds such as political uncertainty and large capital outflows continue to pressure equity prices on a daily basis. If market dips further before the elections next year, these five billionaires could be short around a third of a trillion naira before Christmas.
David Ibidapo and Emeka Ucheaga
