Shares of MTN Nigeria have surged by over 20% month-to-date in early January, with trading volumes exceeding 13 million shares, as the company rebounds from a low in November 2024.
The rise reflects a correction from the stock’s dip to $0.36, amid ongoing foreign exchange struggles.
In its earnings report for the nine months ending September 30, 2024, MTN Nigeria revealed a staggering 90.8% year-over-year spike in net foreign exchange losses, totalling $1.18 billion, compared to $619.5 million in 2023. The significant losses were largely attributed to the volatile exchange rate environment.
In response to these challenges, MTN Nigeria diversified its financing options and strengthened its short-term working capital by issuing commercial papers. Between early November and late December 2024, the company launched several rounds of commercial paper issuances, including Series 11 and 12, Series 13 and 14, and Series 15 and 16, each targeting $64 million. All series saw oversubscription, signalling strong investor confidence in the company’s financial strategies.
As of January 10, 2025, MTN Nigeria’s stock had climbed to $0.53, marking a recovery of more than 40% from its November 2024 low of $0.36. This surge brings the stock close to its $0.61 resistance zone, which it had reached in early 2024.
The company’s stock showed significant volatility throughout 2024. Beginning the year strong at $0.58 in January, supported by a robust trading volume of 52 million shares, MTN Nigeria’s share price peaked at $0.61 by month-end.
However, by February, the price began to dip, reaching $0.48 in February and continuing downward throughout the year to $0.36 in November, a drop largely driven by macroeconomic pressures.
The decline in share price was reversed in December 2024, when the stock rebounded to $0.40 by month-end, coinciding with MTN Nigeria’s issuance of commercial papers to raise short-term capital. The oversubscription of these instruments, with demand exceeding supply by 144%, likely helped bolster investor sentiment.
MTN Nigeria’s stock has since corrected by more than 40% between December 2024 and early January 2025, pushing the share price back above $0.50.
The company now aims to revisit the $0.61 level achieved in January 2024, as market conditions continue to evolve.
Further strengthening its financial position, MTN Nigeria has been actively raising funds through its $541.7 million Commercial Paper Issuance Programme. In December 2024, Series 15 and 16 Commercial Papers were issued, targeting $64 million.
This follows previous successful issuances, including Series 13 and 14, which raised $131.8 million, far surpassing the original target due to strong investor demand.
The series of commercial paper issuances has been managed by Stanbic IBTC, with support from a consortium 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.
Through this strategic funding initiative, MTN Nigeria is securing the financial resources needed to navigate macroeconomic challenges and support its long-term growth objectives. The flexibility of the $541.7 million program allows the company to raise capital in tranches, offering a pathway to meet its business and operational goals in the evolving market landscape.
