MTN Nigeria Exits N4trn Valuation Bracket on Large Selloffs
MTN Nigeria Plc (Ticker: MTNN) has exited the N4 trillion valuation bracket after a large selloff, its share price went down by about 10% on Tuesday to N192.50, according to market data from the Nigerian Exchange (NGX) screened by MarketForces Africa.
The selldown came after the telecommunication company shares opened the week with a price depreciation of 6.99 per cent, to close at ₦213. Consequently, Dangote Cement Plc reclaimed its position as the second most valuable brand listed on the Nigerian Exchange as certain unimpressed investors begin to dump MTN Nigeria shares.
On Tuesday, selling rallies on Nigeria’s largest telecommunication company shares continue amidst trading bazaar in the local bourse. Dangote Cement’s valuation settled at N4.515 trillion, while MTN Nigeria left the bracket entirely.
On Tuesday, MTN Nigeria’s share price fell below N200 on the Nigerian bourse after a large dropped off amidst alleged inflated tax payments which the management has come out to clear.
In the last seven trading sessions, data from the Nigerian Exchange shows that MTN Nigeria Plc has lost more than 16% of its valuation to these selling rallies.
Last year, MTN Group sold 575 million shares to Nigerian investors via public offer at N169 per unit. The share has been making an uptrend as a result of positive sentiments by local investors.
This right sentiment and steady growth in earnings performance triggered buying interest in the Telcos shares, resulting in a price surge for one of the largest market movers on the Nigerian bourse.
The telecom had dislodged Dangote Cement Plc after investors positioned heavily in the Telcos stock following an impressive earnings performance. READ: NGX Group Valuation Drops despite Earnings Growth
After falling from the top valued brand at the close of a trading session on the local bourse on Tuesday, MTN Nigeria Plc can be bought for N3.918 trillion at a share price of N192.50 on its 20.354 billion shares outstanding.
The telecom giants recently announced a plan to raise funds from the local debt capital market via its newly registered N200 billion bond issuance programme with the Nigerian Securities and Exchange Commission -SEC.
The telecommunication company told regulators that the planned bond raise is to finance its network expansion, working capital and other corporate use. Some Broadstreet analysts think the selloff on the telecom company’s shares will continue ahead of its earnings release, then a fresh positioning will resume.
Others think institutional investors, especially, pension fund administrators are clearing the books amidst yield repricing in the fixed income space where they often play comfortably.
“It is a trading strategy to dump stocks when they near their peak price and then wait to buy the blood after price drop”, a slew of equity analysts told MarketForces Africa.
What is clear for now is that MTN Nigeria Plc’s share price could drop below N180 before the company release its financial statement for the second quarter of 2022. The question now is: who is selling interest in MTN Nigeria and why? We will be back. # MTN Nigeria Exits N4trn Valuation Bracket on Large Selloffs
