MTN’s listing: Stakeholders split over availability of shares

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…Say 20.35bn shares in hands of a few

…Debt history unknown

By Olabode Jegede

Following its listing by introduction on the Nigerian Stock Exchange (NSE) on Thursday, mixed reactions continued to trail MTN Nigeria’s share price availability to investing public as key holders refuse to sell to new shareholders.

The telecoms giant was admitted to the NSE premium board category, following its official listing by introduction of 20.35 billion units of ordinary shares valued at N1.8 trillion.

Speaking with our correspondent, a stockbroker who trades on the Exchange said the regulators have failed the investing public in making sure MTN shares were made available for trading on the first two days of trading.

According to him, “It is mandatory for a company to make its shares available during listing by introduction except they do not buy.

“If a company is coming to the capital market by introduction, they are supposed to bring enough shares. Dangote Cement did it and I do not see what is stopping MTN Nigeria to do the same.

“The company’s financials was not distributed to stakeholders during the listing by introduction. It is a sign that regulators have failed in doing their duties. How can a company list without financial history? What is MTN Nigeria’s capital history?

“These things were not made available during the listing by introduction on Thursday. The share price history of MTN among others were not made available to shareholders. It is shameful that regulators can encourage such and the whole world is laughing at us. Things of such are not allowed in other Exchanges.

“It is only in Nigeria that such are allowed. Do not forget that MTN Nigeria has no intention of listing in Nigeria. MTN Nigeria has made available 20 per cent in the hands of the public.

Reacting, the former President, Association of Stockbroker House of Nigeria (ASHON), Emeka Madubuike, said, “First, it is not against the rule that companies coming to the market must make its shares available for investors to buy , there is no such rule.

“When you have a stock with high demand, the Stock Exchange in practice takes the stock into account by encouraging the company to make available some shares for listing.”

Speaking on the IPO, he said, MTN Nigeria is to decide.

“The N200 billion loans facility from seven banks, according to what we learnt is needed for strategic purpose.

“The company is a big one and of course, doing well.  If you take investment in the capital market for what is it, which is a long thing, you will find out that, in the long run, you are dealing with a good company.”

He maintained that the company’s share price will find its level.

“When that will happen, I do not know,” he said.

The company’s share price within two days of listing on the exchange  appreciated by 21 per cent to close at N108.90 from N90.00 when it was listed by introduction.

The company had announced N200billion medium term loan facility with seven listed commercial banks, which led to speculations over short-medium term Initial Public Offer (IPO).

Speaking on the company’s Initial Public Offer (IPO), the Managing Director, Enterprise Stockbrokers Limited, Mr. Rotimi Fakayejo said the company’s share price might appreciate before discussing IPO.

According to him, “The price is expected to increase to show MTN’s performance on the Exchange. For instance, if the company sold 1 billion unit, making investors to rush it and to some extent, the company pays off its debt. It is the people that will suffer as the means to settle majority of shareholders.

“The share price of MTN Nigeria has been divided to favour majority shareholders.”

Another stockbroker, Mr. David Adonri said the scarcity of MTN Nigeria’s shares  might have been considered by the regulating bodies, noting that the equities market stands a chance to correct itself.

“MTN Nigeria has already supplied sensitive information to the market over which the stocks have been analyzed. If people are buying now because of the hype surrounding it, a time will come when correction will start.

“Nobody should be worried at all as there will be correction in share price”

The head of research, PanAfrican Capital Plc, Mr. Moses Ojo explained to Nigerian NewsDirect that MTN Nigeria’s share price is not well diversified on the Exchange.

Speaking further he said, “of course the company’s 20.35 billion shares are in the hands of a few investors. When the free float of a company is not large, it is certain that the demand will exceed supply.

“I believe that the present situation of scarcity of MTN shares will be for a period of time.

Speaking from shareholders’ position, a member of Independent Shareholders Association of Nigeria, Mr. Adebayo Adeleke noted that the company is surrounded with a lot of issues concerning its listing on NSE.

He said, “There are quite a lot of issues surrounding MTN shares. The account of 2018, we have not seen it. The last of what people are using to exhibit excitement was company’s 2017 account and anything could have happened in the last one year.

“Secondly, I am not too sure that people have the right information on MTN Nigeria’s stock valuation in order to build an appropriate framework in terms of earnings.

“But you will discover that a lot of people think that the supremacy of the company in the telecommunication industry makes it a desire for everyone to have a share.

“So, there is no need for the mad rush. The shares are already in the public domain and will be a trading continuously.

“Now that we are having more revelations coming, it is not impossible that the share price is overtaken but one thing that is happening is that there will always be a market correction. Market will always correct prices because market forces will come to play.

The level of indebtedness of MTN is something that people still do not have a complete picture of.

“We are not sure why the shares are being traded whether it is just to fulfill regulatory order or they really need to bring more money in compass of the company.

“As it is now, the shares being traded do not add one kobo to MTN, it is those who hold the shares already that are trading it and the money goes to them but the company itself may look at the reflection of the market, gullibility of the market and decided to list on the market. But whether they will come to the market is a decision for their management and board to think.

Well, we do not know why they borrowed N200 billion from seven banks. The company is aware that they have already done introduction by listing and that the market door is open to them to raise money but if the exigency of the business deserves that they should go and borrow, they will borrow. So, I am sure that they have alternatives which they must have considered very well.”

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