MTN Shares Rally After Jumia Soars In New York
MTN’s shares rose 1% to R98.51 early on Monday April 15- the best level since the mobile operator ran into regulatory troubles in Nigeria in August 2018 - after its e-commerce associate soared in its first trading day in New York.
On Friday, shares in Africa-focused Jumia Technologies leapt 75% in New York, giving the e-commerce group a market value of $1.9bn (R26.6bn).
MTN’s roughly 30% stake in the company is now worth about R8.2bn, or R4.36 per MTN share.
“When it comes time to sell their stake, it will raise a nice chunk of easy-to-use cash [for MTN],” local money manager Vestact said on Monday.
MTN’s shares are trading at around their best level since the network operator announced in late August 2018 that the Nigerian central bank wanted it to return $8.1bn worth of dividends.
That demand, together with a $2bn tax demand by the country’s attorney-general just days later, sent the group’s stock crashing at the time. In mid-September, MTN’s shares briefly dipped below the R70 mark.
While the company reached a settlement with Nigeria’s central bank in late December — the $8.1bn claim was reduced to $53m — the tax case remains an overhang on its share price.
MTN’s court battle against Nigeria’s attorney-general has been adjourned until 7 May. The company maintains that its tax affairs are up to date and has not made any provision for extra taxes.