MTN Group Limited has been promising to list its Nigerian business on the Lagos stock exchange for almost three years, yet it took just 16 minutes for the mobile-phone giant to cause a sensation.
After a lengthy ceremony of speeches, congratulations and rounds of applause delayed the start of trading for more than half an hour, it looked as though MTN Nigeria Communications Plc may not trade at all with the market due to close for the day at 2:30 p.m. The listing finally took place at 2:14 p.m. local time, leaving only a brief window before traders knocked off for the day.
The reaction was instant. The stock jumped 10% to N99 from the listing price announced the previous day, valuing the wireless carrier at N2 trillion ($5.6 billion). That makes MTN Nigeria the second-biggest company on the Nigerian Stock Exchange, and the All-Share index acted accordingly, turning a loss for the day into a slight gain.
The reverse was significant because Nigerian stocks have had a torrid time of late — they’re down 9.5% this year. That’s the fourth-worst performance globally, according to data compiled by Bloomberg. They were on track for their ninth straight day of losses until MTN Nigeria’s shares were listed, yet ended the day up 0.5%, the best showing in almost a month.
There may be even bigger moves to come. MTN, Africa’s biggest wireless carrier, has arranged to list the stock in two stages. The first, which took place Thursday, allows Nigerian investors who previously bought and sold their shares over the counter to trade publicly. At some yet-to-be-determined date, MTN will add to the free float by selling part of its majority 79% stake.
“We will soon come back for the IPO,” MTN Nigeria chairman Pascal Dozie told a full house of reporters, brokers and dignitaries on the 9th floor of the Nigerian Stock Exchange. (Bloomberg)