Nigeria’s largest GSM Company, MTN Nigeria, will be listed on the Nigerian Stock Exchange on Thursday 16th of May 2019.
By listing MTN on the Nigerian Stock Exchange, its shares will be traded everyday by buyers and sellers. Until, now this was not possible as MTN shares were held privately by its investors.
MTN shares can only be bought or sold by retail and institutional investors who have a CSCS account and have an account from any registered stockbroker. One cannot buy MTN shares if one does not have a stock brokerage account from a stockbroker registered in Nigeria.
MTN Nigeria is a behemoth of a company reporting massive profits that run into over N160 billion. In its latest investor conference, MTN said that it reports a return on equity of about 90% which means it makes a profit of N90 for every equity of N100 it investS. That’s unheard of for any quoted company in the country.
MTN also claims that to pays over 80% of its profits as dividends, it is also likely to list at N90 (and expected to climb as investors scramble for the shares), thereby placing it at a price-earnings multiple of 11x. Its double-digit revenue and profit growth suggest this is actually a cheap price.
Going by the numbers in public light, MTN might be listed at N90 giving it a price-earnings ratio of 11x (we assumed an earnings per share of N8 based on profits of N160b). If you consider that MTN‘s price-earnings ratio has the potential to rise to as high as 30x, then the share price could easily be N240 by year end. MTN South Africa trades at 29x earnings per share, so this theory is far-fetched. MTN could, therefore, be a good stock to buy for any price between N90 and N160 giving investors a good upside.
To buy MTN Shares, as stated above, you will need to have a stock brokerage account if you are to buy MTN shares. The shares will be listed on Thursday, which means investors (both retail and institutional) have a shot at buying. However, to buy means there must be a willing seller. Once you have a willing seller ready to accept your offer price, then you are sure to have a deal.
Culled from Nairametrics
Samson Oyedeyi
