Next to Dangote, gained N183bn in 16 minutes – 7 things to know about MTN listing

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Next to Dangote, gained N183bn in 16 minutes — 7 things to know about MTN listing

On Thursday, MTN made history as the first telecommunication major in Nigeria to be listed on the country’s stock exchange.

Pascal Dozie, MTN Nigeria chairman, who spoke at the historic event, said: “Today is a major milestone in the evolution of MTN in Nigeria and it is fitting that it takes place 18 years to the day since I made the first call on the MTN network on May 16, 2001″.

“Since our initial investment in 2001, we have worked in partnership with Nigerians to deliver the largest network in Nigeria, with over 60 million people now able to access mobile communications services.

“We employ over 1,600 people and our operations create employment for more than 500,000 Nigerians. Our technology has empowered millions of people and businesses in rural and urban areas.”

Here are seven things to know about the listing:

Second Biggest Company on the Exchange

The biggest company on the Nigerian Stock Exchange (NSE) is Dangote Cement, and the second biggest was Nestle — until Thursday. On Thursday, MTN became the second biggest company on the Nigerian bourse, with a market cap of over N2 trillion, some hundred billions short of Dangote Cement, which is currently valued at N3 trillion.

If MTN continues at its opening trajectory, it may well compete fiercely with Dangote Cement for the biggest company on the exchange before the end of the 2019 fiscal year.

Gained N180bn in 16 minutes

MTN was admitted into the Nigerian stock at a share price of N90 per ordinary share. Following formalties like speeches, meetings and handshakes, the South African telco giant could not trade until 2:14 pm on Thursday, showing that it had only 16 minutes to trade before the market closed.

However, in those 16 minutes, MTN share rose by 10 percent, from N90 to N99 per ordinary share — raising its market cap from N1.83 trillion to N2.01 trillion, immediate addition of 10 percent to its market size.

This means MTN Nigeria gained N183 billion — or over $500 million — in 16 minutes!

Product of Negotiation for N1.04trn fine

With a public relations overdrive, it is easy to say MTN is listing on the Nigerian Stock Exchange for many of the reasons highlighted in the fine speeches given on Thursday at the ninth floor of the exchange building — but that is not the case.

In 2015, the Nigerian Communication Commission hit MTN with a fine of N1.04 trillion, which many said was going to be the end of the telco in Nigeria. To get out of trouble, MTN pulled a “get-out-of-jail” card, which included promising the Nigerian government that it would list on NSE.

Three years and seven months after, MTN has finally fulfilled that promise.

MTN is first again

MTN Nigeria, a part of the MTN Group, regarded as Africa’s leading cellular telecommunications company, has clinched another first with this listing, becoming the first telecommunications network provider to be listed on the NSE Premium Board.

Other big telcos in the country are privately owned, and cannot be classified as a public liability company.

MTN joined the big boys club

MTN did not just list on the exchange, but it listed on the Premium Board of the NSE, which means it just joined the league of the biggest publicly traded companies in Nigeria.

This club has the likes of Dangote Cement Plc, FBN Holdings Plc, Zenith International Bank Plc, Access Bank Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc and United Bank for Africa Plc.​

Speaking to this on Thursday, Abimbola Ogunbanjo, national council president of the NSE, said this “will encourage other telecommunication companies to list their shares on The Exchange, thereby opening the sector up to cheaper, long term capital that will boost innovation and development”.

Only 21 percent of MTN Nigeria is available for trading

The market and Nigerians are excited about the possibility of owning part of the Yhello brand by buying MTN shares at the exchange. But there is more than meet the eye. MTN Group currently owns 79 percent of MTN Nigeria, while local investors — and maybe some international investors — own only 21 percent.

The 21 percent is available for trading, based on the discretion of those who own those shares. The 79 percent held by MTN Group is not available for trading until a later date — which remains unknown.

There will be an IPO

According to Pascal Dozie, MTN will be back at the exchange for an initial public offer (IPO) in the not so distant future.

An IPO is the process of offering shares in a private company to the public for the first time — this is when part or all of MTN’s 79 percent may be up for trading to the public.

Love it or loathe it, besides all the controversies, MTN indeed made history on Thursday when it added about N2 trillion to the Nigerian Stock Exchange!

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