MTN Nigeria‘s share price is now N119.75 after debuting on the Nigerian Stock Exchange (NSE) with an initial N90 per share. Shareholders tapped into the off-market to sell shares at a higher price. Interestingly, investors were willing to buy at N125.
Note that the Nigerian Stock Exchange is not involved in the off-market transaction which is typically settled between two parties on mutually agreed terms. This method also excludes the involvement of share broking firms, because two shareholders can privately transfer shares between themselves.
What this means is that the deals were sealed through the transfer portal of the Exchange after prearranged negotiation.
Why investors don’t mind price increase: MTN Nigeria‘s shares are currently the most sought after on the Nigerian Stock Exchange since the telecommunications company listed on the stock exchange on Thursday.
Although MTN Nigeria‘s share price is still behind Dangote Cement‘s N177.00, the network operator’s shares are scarce because the company is yet to issue new shares. As a result, the only way to buy them is from willing shareholders. This has, therefore, placed a premium price on available shares.
Will MTN Nigeria issue new shares? The company is not looking to raise stock which usually prompts companies on the stock exchange to issue new shares. MTN Nigeria said the market environment and reason for raising funds will determine when the company will issue shares to the public. When the time comes, MTN Nigeria will have a free float of about 35%.
In the meantime, the only option is to find the company’s private shareholders who are willing to sell. Interestingly, they are taking advantage of the cravings.
Result from off-market dealings: Nine deals were struck for 16.26 million ordinary shares of 2.0 kobo each of MTN Nigeria at N125 per share at the negotiated dealing window of the NSE.
Dangote’s spot under threat? With its current momentum, MTN Nigeria is on course to replace Dangote Cement Plc as the most capitalised company on the NSE. The telecoms company currently has a market cap of N2.437 trillion while Dangote Cement has a market cap of N3.016 trillion.
Reason for the conclusion is;
- MTN Nigeria gained N384.62 billion in two days, pushing its market value from the initial listing value of N1.83 trillion to N2.22 trillion; but it’s now N2.43 trillion.
- MTN Nigeria opened the market with N108.6 kobo per share, but it’s now N119.75 kobo before market close.
- Dangote Cement opened the market with N176.00 kobo per share, but it’s now N178.00 kobo before market close.