MTN shares drop on Nigeria fuel protest

Shares in MTN slipped further in afternoon trade on Tuesday as a number of headwinds faced by its international operations unnerved investors.

By - January 11, 2012 Share on LinkedIn

Shares in mobile operator MTN (MTN) slipped further in afternoon trade on Tuesday as a number of headwinds faced by its international operations, particularly in Nigeria, unnerved investors.

By 14:45 local time, shares in the group declined R2.00, or 1.47% to R133.60 on the JSE, with the group’s shares down close on 7% for the first 11 days of 2012.

A local dealer at BoE Stockbrokers told MyBroadband: “There is concern over more protesting in Nigeria today, over fuel prices. There has also been further unrest between Muslims and Christians in the region. Everyone seems to be watching that.”

A nation-wide strike in Nigeria began on Monday after a decision by government to scrap a fuel subsidy – which has nearly doubled petrol prices as a result.

Bloomberg also recently reported that MTN would spend more than $1 billion in 2012 to improve its network in Nigeria – the group’s largest territory in terms of subscribers at 41.107 million.

Shares in MTN fell by as much as 6% at the back-end of last week amid heightened tensions between Iran and the US, with Europe also involved.

The US Congress granted President Barack Obama the power to impose sanctions on Iran over its nuclear programme with further sanctions urged by the EU. Sanctions would block payments for the Middle Eastern country’s crude oil.

For the quarter ended 30 September 2011, MTN Group recorded 158.59 million subscribers with Iran at 33.314 million subscribers.

“MTN is facing a number of headwinds, which may be temporary, but is putting pressure on the group’s shares nonetheless,” the dealer said.

Reuters also reported on Tuesday that Goldman Sachs dropped the African telecoms operator from its pan-Europe buy list and cuts its rating to neutral.

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