October began as a month of celebration for Nigeria but it hasn’t been the same for the telecommunications company, MTN Nigeria. The network provider’s shares have continued to slip further this October on the Nigerian Stock Exchange (NSE), and with the company preparing for a court case in the last week of this month, October might just be a month not to remember for the company.
Since the second week of August 2019, MTN Nigeria’s share price has been on the rise, from N129.25 kobo on August 14 to N135 the next day. That was the beginning of the resurgence of MTN Nigeria’s share price in the stock market.
The signs: MTN Nigeria has averaged N135 per share since then, while it recorded N141 per share on August 30. But its high performance in stock market dropped at the end of September 2019, hitting its lowest for that month at N130.50 on September 30. Prior to that, MTN Nigeria had recorded N140 per share on September 18. It remained flat until September 24 when it dropped to N139 per share. Then it dropped again on September 25 remaining flat until September 27 when it hit N136 per share.
The fall of MTN Nigeria’s share price continued into the month of October hitting N130 per share. The last time the network provider’s share price fell to N130 or below was on August 14 which ushered in the rise in MTN Nigeria’s stock performance.
Court case compounds fall: The fall of MTN Nigeria’s share price is happening in the period the company has a court case. The court had adjourned MTN Nigeria’s $2 billion tax case to October 29, 2019. The postponement was ordered following the request for more time by the lawyers for the Attorney General’s Office. The request was made to enable the lawyers to prepare their case and file a response.
Nairametrics had reported that the attorney general’s office accused MTN Nigeria of failing to pay $2 billion in taxes and penalties, but the telecoms firm filed a case asking the court to rule on the legitimacy of the case, arguing that the AGF does not have the jurisdiction to determine unpaid taxes and therefore it should neither have to pay the tax bill nor related fines. It has been a disappointing first week of October, and with this lawsuit coming up, its to been seen if the trend will continue.
This is because Investors’ confidence often fluctuates amidst court case due to unpredictable judgement, and this might likely push further, an already falling stock, down or go up especially if the case becomes favorable. The company had recorded a continuous fall of its share price in the week leading to this court case in June, the postponement gave it a lifeline; then, MTN Nigeria’s share price had hit N128.50 kobo.