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MTN Nigeria shareholders lose N386.73bn, as South African investor triggers sell pressure

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MTN considers scrapping Nigerian IPO as it faces $10bn claims

MTN Nigeria’s market value declined on Wednesday as the telecommunications giant’s parent company, MTN Group, began part sell off of its stake in the domestic telco.

Ripples Nigeria had reported that the South African-based investor planned to sell 575 million stocks out of its 15.48 billion shares – held on its behalf by MTN International (Mauritius) Limited – in MTN Nigeria at N169 per share.

The offer price is 11.05 percent lower than the N190 per share market price of Tuesday, November 30, 2021, and as the sell off began on Wednesday [ending December 14, 2021], the stock value fell by 10 percent.

MTN Nigeria stock depreciated to N171 per share, wiping N386.73 billion out of the total shareholders’ investment in the company, as the insider dealing increased sell pressure.

Analysis of Wednesday’s trading on MTN Nigeria stock showed the 10 percent decline pushed the market capitalisation down to N3.48 trillion, from N3.86 trillion.

Sell off affects MTN race against Dangote Cement

This widened the gap between MTN Nigeria and Dangote Cement, both of which were neck to neck in the race of the most valuable company in Nigeria as of August 2019, accounting for N2.77 trillion and N2.83 trillion respectively.

Read also: MTN Nigeria network down, subscribers demand compensation

Fast forward to Wednesday, the sell off among shareholders of the telecom created N1.29 trillion margin between MTN Nigeria and Dangote Cement, with both respectively accounting for N3.48 trillion and N4.77 trillion.

As of November 10, 2021, the gap was N700.43 billion when MTN Nigeria’s stock was valued at N201 per share in the capital market.

The sell pressure had been projected by Ripples Nigeria, as sell off by a substantial investor signaled negative sentiment for near future in the capital market, because minority investors use actions of majority shareholders as a map for their decision making.

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