Investors have refused to price higher or lower the shares of Airtel Africa on the Nigeria stock exchange (NSE) market as the share price of the nation’s second-biggest Telco Company by market cap remained flat at N323.50 as at the close of market on Wednesday on weakened appetite.
The stock had maintained its current level in four previous trading sessions on the exchange despite some forms of trading activitie on the security.
As at the close of trading on Wednesday, total volume traded on the company’s stock rose to 130,325 units of shares against 1,860 units traded the previous day.
Waned by the pre-eminence of investor’s negative sentiments which has ushered the Nigerian All share Index (NASI) into its 26-month low, coupled with concerns over the Telco’s fundamentals, investors have resorted to taking caution on the stock.
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On the other hand, the stock slumped 1.26 percent on the London stock exchange market (LSE) on Wednesday to 70.80 GBp pushing further away Airtel Africa’s price from its Nigeria equivalent of 72 GBp.
Analysts are however of the opinion that prices in the Nigerian market would further correct to reflect stock movement on the London stock exchange as Airtel’s share is still in its price discovery stage.
Since its listing on the Nigerian Stock Exchange on July 8 this year, Airtel Africa has lost in market value N284.86 billion, as price plunged 19 percent from N399.3 to N323.50
“The market currently isn’t looking good and investors are cautious,” Paul Uzum, a Lagos-based stockbroker, told BusinessDay. “There is no excitement whatsoever towards Airtel’s share.”
According to him, there is no strong market demand pursuing the stock, to this end going forward the price is expected to reverse and converge with prices on the London Stock Exchange Market since it’s a dual listing.
The Nigeria equity market further slumped on Wednesday to further worsen its year-to-date performance to -10.8 percent, lowest levels in the last 26 months on negative market sentiments.
Investor sentiment as measured by market breadth (advance/decline ratio) remained flat on Wednesday at 0.3x due to 8 advancers against 26 laggards.
“We expect the bearish performance to continue until we start seeing H1 2019 earnings results,” a report by Afrinvest stated.
DAVID IBIDAPO
