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MTN to reawaken buy-side of Nigeria stock market

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Amid lingered sell pressure at the Nigerian Stock Exchange (NSE), the listing of MTN Nigeria Communications Plc this Thursday May 16 will no doubt rekindle the buy-side of the equities market.

MTN Nigeria has historically aimed to maximise dividends and in the medium term, it targets a dividend pay-out ratio of at least 80percent of its distributable net income subject to board discretion, according to the Telco in its first-quarter (Q1) analyst’s presentation.

The shares of MTN Nigeria Communications Plc are to be listed by introduction on the Premium Board of the Nigerian Stock Exchange. The listing is anticipated to lift the overall market capitalisation on the NSE and may trigger further primary market activities in the telecom space. MTN listing by introduction brings forth N1.83trillion ($6billion) worth of equities to the Nigerian Bourse, thereby boosting the value of listed stock by approximately 17 percent to N12.52trillion from its current low.

The stock market year-to-date (ytd) negative return printed at -10percent on Wednesday May 15 despite that the All Share Index traded positively briefly at the beginning of the session but sentiment quickly turned negative and never recovered till close of trading by 2.30pm.

The value of listed stock declined from N10.678trillion to N10.626trillion, representing a decline of about N52billion. The All Share Index (ASI) decreased by 0.48percent to 28,286.08 points from a high of 28,422.76 points the preceding trading day.

Forte Oil Plc was the biggest loser Wednesday on the Bourse after its share price declined from N34.95 to N31.5, losing N3.45 or 9.87percent. It was followed by Cement Company of Northern Nigeria Plc which recorded price decline from N15.3 to N13.9, after losing N1.4 or 9.15percent.

On the gainers table, Dangote Sugar Refinery Plc advanced most, from N13.6 to N13.85, adding 25kobo or 1.84percent; followed by UAC of Nigeria Plc which was up from N7.3 to N7.55, after adding 25kobo or 3.42percent.

Week-to-date (Wtd), the stock market has lost 1.95percent of its value. In 3,294 deals, stock dealers exchanged 176,741,695 units valued at N2.076billion. Access Bank Plc, UACN Plc, UBA Plc, GTBank Plc, and Zenith Bank Plc were actively traded stocks on the NSE.

Nigerian investors own 19.4percent of MTN Nigeria, while 78.8percent is owned by South Africa’s MTN Group.

“The lack of market catalysts is the reason for the persistent declines observed on the bourse. However, we expect to see some respite for the market on Thursday as MTN lists its Nigerian shares on the Exchange by Introduction. We expect the listing to buoy investor interest in the market and boost overall market performance”, said equity research analysts at Vetiva Capital.

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