MTN Share Rises Following Peaceful Nigerian Elections
Africa’s biggest telecommunication brand, the MTN group, had its share price recently appreciating to 8.3%, a week after elections were conducted in Nigeria where the group has its biggest market of telecom subscribers.
The Nigerian elections which ended on a peaceful note despite the anxiety of possible violence saw the country’s electoral commission early Wednesday morning proclaim opposition leader, Muhammadu Buhari was winner of the polls and the aftermath has had a positive impact on the Nigerian economy and businesses.
MTN’s price stock enormously rose by 5.85% reaching the price of R217 at the close of trading on Monday at the South African Exchange, nearly R17 higher than the close of trading on Friday last week.
Farai Mapfinya, head of equities at JM Busha saw the rise for Africa’s biggest telecoms service provider as a re-rating because it was priced for a chaotic outcome, which did not happen. He said MTN was trading at a 35% discount to the market while Vodacom was at 25%.
“The peaceful conclusion of the election has allayed the fear of foreign investors about the market,” Ayodeji Ebo, head of research at Afrinvest, said.
MTN had 59.9million subscribers in Nigeria at the end of 2014 and 223 million subscribers across all 22 markets which cut across various continents. MTN sales Nigeria jumped by 12% last year, against a 6.4% increase in total revenue. The company has earmarked spending R8.8bn on infrastructure in Nigeria this year as it hopes to add 4.8 million new users to its current 59.9 million. Sales in MTN Nigeria rose 12% to R54bn in the year to end-December.