Shares of MTN Nigeria have soared by over 20% month-to-date in early January, with market activity exceeding 13 million shares traded.
This strong rise reflects a correction from a low in 2024, where the stock dipped to N170 in November amid foreign exchange struggles.
According to the earnings report released in late October for the nine-month period ending September 30, 2024, net foreign exchange losses spiked by 90.8% year-over-year, reaching N904 billion compared to N474 billion in 2023.
To navigate macroeconomic challenges, MTN diversified its financing options and bolstered its short-term working capital by issuing commercial papers.
From early November to late December, the company rolled out Series 11 and 12, Series 13 and 14, and Series 15 and 16, each targeting N50 billion, with all issuances experiencing oversubscription.
These strategic initiatives have likely contributed to MTN Nigeria’s share price rising by over 20% month-to-date as of January 10, 2025, climbing to N242.
Following a market correction, the stock rebounded by more than 40% over December and January, surpassing N230 in early January as it eyes the N281 resistance zone reached in early 2024.
Market trends
MTN Nigeria’s stock experienced notable movements over the past year, reflecting evolving market conditions.
- The year began on a strong note, with the share price at N264 in January 2024. Supported by a trading volume of 52 million shares, the stock closed the month at N281.
- By February, the company’s share price began to decline, dropping to N222.
- This downward trend continued gradually throughout the year, reaching N170 in November, likely influenced by macroeconomic challenges and foreign exchange pressures.
In December, the stock started to recover, climbing to N200 by the end of the month.
- This rebound coincided with MTN’s raising of short-term capital through the issuance of commercial papers.
- The oversubscription of these instruments likely strengthened investor confidence and contributed to the stock’s recovery.
Between December and early January, the company’s shares corrected by more than 40%, surpassing N240 in early January 2025 and aiming to revisit the N281 level achieved in January 2024.
Commercial paper issuance
MTN Nigeria has been steadily raising funds through its N250 billion Commercial Paper Issuance Programme, a strategic initiative aimed at supporting its operational and business objectives.
- The company recently issued Series 15 and 16 Commercial Papers on December 23, 2024, targeting N50 billion.
This follows a string of successful issuances over the past months, showcasing MTN Nigeria’s ability to attract substantial investor interest.
- On November 29, 2024, the company issued Series 13 and 14 Commercial Papers, offering yields of 27.50% for the 181-day tenor and 29.00% for the 265-day tenor.
While the initial target for these issuances was N50 billion, strong investor demand resulted in an oversubscription of 144%, raising a total of N72.18 billion.
- Earlier in the same month, MTN Nigeria issued Series 11 and 12 Commercial Papers on November 7, raising N75.1 billion.
The commercial paper issuances have been arranged and managed by Stanbic IBTC, with contributions from a range of joint dealers, including CardinalStone Partners, Chapel Hill Denham, Cordros Capital, Coronation Merchant Bank, FCMB Capital Markets, Meristem Securities, Quantum Zenith Capital, and Rand Merchant Bank.
The N250 billion Commercial Paper Issuance Programme is structured to raise capital in tranches, providing MTN Nigeria with the flexibility to meet its financial and strategic goals.
