BusinessDay

Stockbrokers, investors see MTNN offer as ‘Good Buy’

Nigeria’s stockbroking community and equity investors have further shown their support for the ongoing public offer of MTN Nigeria Communications (MTNN) Plc.

Nigeria’s largest telecommunications provider on Wednesday December 1 started public offer of its shares which allows retail investors to purchase up to 575 million shares at N169 per share—lower than its share price on the secondary market.

Most of the stockbrokers and investors who spoke at an Investor Forum on Monday December 6 in Lagos were of the view that the ongoing public of offer of 575million shares in MTN Nigeria is a “Good Buy” for investors seeking higher returns -in form of capital appreciation and dividend yield.

The ongoing public offer is in line with MTN Group’s commitment to reduce its shareholding in MTN Nigeria from 79percent to 65percent over time.

The minimum number of shares that can be bought in the retail offer which closes on December 14 is 20 units. To encourage people to buy more, the MTN Nigeria offer includes one (1) bonus share for every twenty (20) purchased, subject to a maximum of 250 free shares per investor—an incentive open to retail investors who hold shares for at least 12 months after allotment.

The Investor Forum provided insights into MTN Nigeria’s investment case, the public offer and business outlook.

Karl Toriola, CEO, MTNN who said “This forum gives investors the opportunity to make informed decision on the need to invest in the offer”, noted among others that MTNN as the largest listed company by revenue and the second largest listed company in Nigeria by market capitalisation offers returns to shareholders.

He noted that MTNN has dividend payment policy of a minimum of 80percent of net distributable income. Over N2.3trillion paid out since inception as dividend. MTNN has stellar financial performance delivering the largest revenue of any publicly listed Nigerian corporate,” Toriola added.

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Olatunde Amolegbe, President, Chartered Institute of Stockbrokers (CIS) said, “MTNN today is helping us to move in the direction this market has sought for a while.”
“As operators, this is a vision that this market has been looking for in the past 30 years – having a market that is not driven by volatility. I thank MTNN for going into this direction and assure you we will ensure the success of this offer because the success of the offer also represents the success of this market,” Amolegbe added.

Also, at the Investor Forum, Kasimu Garba Kurfi, Managing Director/CEO, APT Securities and Funds Limited said, “Today in the history of this market, we have never had an offer as low as 20 units – which is to encourage retail investors.”

“This we have never had in the history of the market. We want you (MTNN) to ensure that there is never issue of unclaimed dividend. Offer for sale is automatic qualification for dividend because we are buying from existing shareholders,” Kurfi said.

Boniface Okezie, National Coordinator, Progressive Shareholders Association (PSAN) said, “Today, having listened to the yearnings of Nigerians, I commend the Board and Management of MTNN.”

“For me, MTNN is still the best company to invest in. I urge all retail to buy this stock. For MTNN, this is time to work for shareholders not only for regulators. For investors, go and invest in MTNN and keep your dividends rolling in,” Okezie said.

Modupe Kadri, Chief Financial Officer (CFO), MTNN said the aim of the investor forum is “to introduce a wider base of Nigerian shareholders into the ownership of the MTNN”, adding that the Offer will also increase free float of MTNN on the Nigerian Exchange Limited (NGX). He noted that MTNN is the most actively traded stock on the NGX today.

Also speaking, Temi Popoola, Chief Executive Officer, Nigerian Exchange Limited said, “We have always been clear about the future of the market – retail investors, wealth creation and capturing the larger demography of the Nigerian population leveraging technology. I encourage you to encourage everybody to key into this MTNN offer – it’s a transaction that will revive the market”.

Bolaji Balogun, CEO of Chapel Hill Denham, an investment banking firm which is the Lead Issuing House and Bookrunner for the MTN Nigeria public offering said, “MTNN is Nigeria’s strongest company in terms of dividend distribution and dividend policy”.
“It is an increasing season of giving; if there is one gift you must give to a family member, if there is one share they would buy, it is MTNN,” Balogun noted, adding that sooner the business of MTNN will expand with the mobile banking license.

The five investment banks/issuing houses mandated to sell the offer are Chapel Hill Denham (the lead), Rand Merchant bank, Renaissance Capital, Vertiva, and Stanbic IBTC. In addition to this all the (about 200) stock broking firms in Nigeria can sell the offer.

“The MTN Nigeria offer represents excellent value for investors. At the offer price, the shares trade at a Price/Earnings (PE) ratio of 11.6x our forecast of 2021 Profits After Tax, and a PE of just 9.1x our forecasts of 2022 Profits After Tax. The historic dividend yield for the stock is 5.5percent and this is expected to increase”, Coronation Asset Management said in their December 6 note to investors.

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