MTN and other telecom companies boom on the Nigerian stock market

In recent weeks, Nigerian telecommunications company MTN has found itself on the watchlist, with investors from across the globe are looking to buy stocks in this African company with a worldwide customer base. Formerly known as M-Cell, MTN has forged a respected name for itself across African countries, as well as in Europe and Asia. From its Johannesburg headquarters, the ambitious organisation has worked hard to become the world’s ninth largest mobile network operators, no mean feat for a company that is still under 20 years old.

Last month, in another sign of its growing success, MTN listed on the Nigerian Stock Exchange (NSE) for the first time, creating an opportunity for investors. While the company’s primary listing is on the Johannesburg stock market, this latest move has been seen as a real vote of confidence in its future. To coincide with the new listing on the NSE, MTN released a statement, saying: “This is just the beginning, we still intend to pursue a future public offer giving more Nigerians greater access to the MTN opportunity.” Ralph Mupita, who is CFO of MTN Group also said that listing the organisation on NSE also represented an important move towards pushing up local ownership of MTN in Nigeria, thus adding strength to the country’s equity capital markets.

The latest news on MTN may be positive but things haven’t always been rosy for the telecoms giant. As recently as 2015, the organisation found itself in trouble with the Nigerian Communications Commission when it failed to disconnect over 5 million subscribers with unregistered SIM cards. This event saw MTN’s share drop by 12% and the company was fined $5.2 billion for its misdemeanour. However, this amount was ultimately reduced to $1.7 when MTN said it would list on the Nigerian Stock Exchange. So, MTN’s route to the exchange has been somewhat chequered.

MTN may soon be joined on the Nigerian Stock Market by another large telecoms company – Airtel Africa Ltd, which is part of Bharti Airtel Ltd, an Indian telecommunications group. Airtel Africa Ltd has indicated it may float on the London Stock Exchange in a bid to expand its services across Africa. And, it’s also said it may soon be listed on the Nigerian Stock Exchange, joining competitor MTN. When MTN listed on the Nigerian Stock Exchange, it did so with 20.35 billion shares as a cost of N99 per share.

In recent days, MTN’s shares have increased in value, but some market analysts have said that the company doesn’t necessarily have a clear run ahead. Network expansion, the disruption caused by that industry fine and certain geopolitical tensions in Iran have all made for slightly rocky foundations. However, while MTN’s late 2018 share price suffered a steep drop, it has definitely rallied since then.

As with all matters buying and selling shares, it’s not possible to predict with any accuracy whether MTN’s fortunes will rise or fall. However, it currently seems as though this Nigerian telecommunications company is certainly one to watch, on the NSE and potentially on bigger stock exchanges in the months and years to come.

 

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