In what appears to be the start of a bullish run for MTN Nigeria plc, shares of the newly-listed company rallied by 10 percent to N99 on the Nigerian Stock Exchange (NSE).
The listing helped the bourse to end an eight-straight-day losing streak as the broad market closed the day up 0.5 percent, the biggest gains in a month.
MTN Nigeria pushed market capitalisation to N12.46 trillion and reduced losses so far this year to single digit at 9.52 percent.
The NSE listed by introduction 20.35 billion (20,354,513,050) ordinary shares of MTN Nigeria Communications plc at N90 per share.
It was listed on the NSE Premium Board, a listing segment for the elite group of issuers that meet the Exchange’s most stringent corporate governance and listing standards.
Toast of investors currently in the domestic equity market that has remained largely bearish year-long, the listing of MTN leaves many investors in a desperate search for existing stakeholders willing to part with their holdings in MTN Nigeria.
“Despite increasing interest by the investing community to take advantage of the historic listing, we note that liquidity could be a concern as the listing by introduction implies that demand can only be filled by existing shareholders looking to exit,’’ analysts at Lagos-based United Capital noted.
However, in what may be a glimmer of hope for many investors eager to take position in the telco’s stock, there are indications that more units of its shares might be available for the public in the coming days.
“Snippets from recent releases suggest that free float may be pegged at 20 percent. However, management has hinted on a potential public offer which can buoy free float to approximately 35 percent subsequently,” analysts at United Capital said.
“We will soon come back for the IPO,” MTN Nigeria Chairman Pascal Dozie told a full house of reporters, brokers and dignitaries on the 9th floor of the NSE yesterday.
According to United Capital, strong earnings and growth potential of the telecommunications sector in Nigeria make MTN Nigeria a strong buy.
MTN Nigeria attracted a bid of 200 million units on the first trading day, which works out to N20 billion at a N99 per share, but only 5 million shares were on offer.
“It is a promising development in the country’s telecommunications sector and we encourage other players in the sector to explore the different opportunities in the capital markets for raising long-term capital,” Oscar Onyema, CEO of NSE, said.
“This listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency, as our platform remains one of the best avenues for raising capital and enabling sustainable growth for national development,” Onyema added.
He further pointed out that MTN Nigeria listing in the market is a testament of the Exchange’s commitment to building a dynamic and inclusive market and creating channels for sustainable investment.
Bolaji Balogun, CEO, Chapel Hill Denham, which acted as a joint financial adviser with Stanbic IBTC Capital for the historic listing, said, “There are very few companies in Africa today that generate $1 billion of free cash flow and this is one of those special companies and I’m really pleased we have it on the stock exchange.
“This listing would encourage many other large unlisted companies both within that sector and as well as other sectors to start to think about the Nigerian stock market.”
IHEANYI NWACHUKWU
