Nigerian Stock Investors Lose N302bn Amid MTN Investigation

• Nigerian Stock Investors Lose N302bn Amid MTN Investigation

The Nigerian Stock Exchange (NSE) dipped on Monday after MTN Nigeria announced on Saturday, May 25, 2019, that the Economic and Financial Crimes Commission (EFCC) is investigating its Listing.

The market capitalisation dipped N302.41 billion to N13.30 trillion, while the NSE All-Share Index declined by 2.22 percent to close at 30,194.71 basis points.

Prior to MTN Nigeria listing, activity level was generally low with a year-to-date loss of about nine percent.

However, MTN Nigeria reversed the bearish trend and bolstered market sentiment until some stakeholders accused the telecommunication giant of not fully complying with the NSE and SEC basic requirement for listing.

According to them, MTN Nigeria should not have listed without selling at least 20 percent of its stake as required by regulators for stocks listing on the premium board.

They claimed the scarcity created by MTN Nigeria action led to the stock gaining over 63 percent within two weeks, hence they demand investigation of the process leading to its listing.

MTN Nigeria has since released a statement acknowledging the EFCC visit to its head office in Lagos but denied any wrongdoing.

The uncertainty surrounding the investigation despite having $2 billion tax suit hanging over its head and another fine of N55 billion (SIM registration fine) due on 31st of May, plunged the stock by over 6 percent on Friday and another 7.14 percent on Monday to close at N130 per share.

Activity level on the trading floor decreased as volume and value traded drop by 50.6 percent and 74 percent to 145.2 million units and N1.7 billion, respectively.

A total of 17 companies closed in the red as investors resume sell-off of large-cap stocks that were flying last week.

The analysts said, “Across sectors, performance was mixed as three of six indices under our coverage closed southwards. The Afrinvest ICT index – a market-cap-weighted index of seven listed ICT securities – led laggards, down 7.1 per cent on the back of a loss in MTN Nigeria.

“The industrial goods index depreciated by 2.1 per cent primarily on the back of profit-taking in Dangote Cement. Similarly, sell pressures in Oando and Forte Oil dragged the oil and gas index 0.4 per cent lower.”