… as stock gains 21 per cent in two trading days
Shareholders have expressed their disappointment and disapproval over the highly limited flotation of MTN shares after its listing last week on the floor of the Nigerian Stock Exchange (NSE).
The giant telecoms company listed 20.35 billion ordinary shares of its existing shareholders at N90 per share on May 16, 2019 through the listing by introduction route.
But investors were dismayed to see that only about 5,541,4 00million shares were released for trading from about 700 existing shareholders of the firm who held strongly to their holdings, leaving other investors to scramble for the few units that were released to be traded. However, the volume of shares that exchanged hands on Friday May 17, 2019, the second trading day after its listing, increased to 48.358million shares at N108.90 per share.
The development, industry analysts said may have dashed the hopes of investors who had stockpiled funds to grab as many shares as possible and those who had juggled their investment portfolios to create room to be part owners of the long awaited shares.
Most of them wore long faces at the close of business as their expectations were not met after the listing of the shares of the seemingly juicy company which gained 10 per cent in the first few seconds of listing from N90 per share to N99.00 per share, and has already gained 21 per cent in two days (to close at N108.90) and pushed market capitalization from N10,626trillion on Wednesday May 15, 2019 to N12.716 trillion (representing an increase of 20.3 per cent) at the close of business on Friday May 17, 2018.
Some shareholders complained that shares of MTN were merely crossed to existing shareholders in the name of listing the company’s shares as its shares remained illiquid. They averred that the existing shareholders were holding on tightly to their shares to allow its share price to appreciate.
National Coordinator, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okeziewho queried MTN for the limited floatation said it was frustrating that shareholders could not see the shares of the company to buy.
A Lagos-based financial analyst, Mr. David Adonri of HighCAP SecuritiesLimited explained to BusinessHallmark that unless existing shareholders release their holdings, the company’s shares would remain scarce and small floatation and lack of liquidity will be the consequence.
Meanwhile, the company has promised to return to the market for an offering on an unspecified date in the future, adding that the circumstances which delayed its coming to the market with an IPO were still very much there.
Nevertheless, the company is still battling to extricate itself from a $2bn tax row with Nigeria’s attorney general which it claims was partly responsible for reasons why Nigerians have yet to enjoy its public offering.
‘’Once that matter is resolved, MTN will sell more shares to the public. And seek to increase local ownership of MTN Nigeria to 35 per cent from the current 20 per cent ‘’, said MTN’s finance chief,—-
While Coronation Merchant Bank analysts projects that the company should trade at N108 per share to enable it gain significant attraction in the market for an IPO (Initial Public Offering), its first quarter unaudited results reveals that total revenue rose 13.3 per cent from N249billion in 2018 to N282 billion in the first quarter of 2019.
MTN also increased its operating income in the review period by 22 per cent from N123billion to 150 billion in 2019.
Its year on year EBITDA also jumped 44 per cent from N104billion in 2018 to N150billion in Q1 2019.
As the largest operator in Nigeria, MTN boasts of 60.3million subscribers’, 20.4million active data users, and 50 per cent of the telecoms market revenue.
Though investors scrambled for the few units of shares that were floated, many of them are still patiently waiting for the company’s IPO which will come at a future date.
With a record performance of N453.1 billion Earnings Before Interest, Taxation, Depreciation And Amortization in its 2018 full year report, MTN Nigeria is certainly looking poised to increase its growth trajectory on a sustainable basis.
To its credit, the company achieved this record performance despite the challenges it has had with the Nigerian government which almost snuffed life out the giant telecoms firm that doubles as the biggest of its type on the African continent.
Breaking down the numbers, services revenues increased by 17.2 per cent, data revenue increased by 39.3 per cent, digital revenue decreased by 58.1 percent and Fintech revenue increased by 32.7 per cent.
It also showed an EBITDA margin increase by 4.5 per cent to a total 43.6 per cent ( excluding CBN Payment).
Many stakeholders believe the company has in fact scored a great point that will further attract investors and make its shares liquid eventually.
To be sure, industry analysts’ prediction of the impact of MTN’ s listing in the market has come to pass as market capitalization added 1.8 trillion
The company is the biggest telecoms firm in Nigeria, placed against the likes of Glo and 9Mobile.
With its listing also, the Nigerian capital market had attained unprecedented level at N16.080trillion as at Wednesday January 17,2018.
Before then, market capitalization had continued to slide, hovering between N10 and 11 trillion. The bearish trend has been frightening to investors for some time now, given the weak national economy. However, the listing of MTN shares appears to have turned the tables as market stakeholders had always hoped.