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Why MTN’s share price is suffering

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MTN,MTN Nigeria,Nigerian Communication Commission (NCC)

MTN’s share price has taken a beating over the last two years, with its most recent pain coming from Nigeria.

MTN ’s share price is down 28.5% since the start of the year after Nigeria announced changes to how its currency, the Naira, may be exchanged.

This explains why MTN remains committed to Nigeria despite the country’s numerous economic and political challenges.From 2014 to 2015, MTN’s share price traded between R200 and R250 and the company was doing well.Although much less than the original fine, it was still significant. Unfortunately, this had the effect of lowering investor confidence in the currency and increasing selling demand.

Of course, investors know the black market rate, further lowering investor confidence in the currency. MTN became a victim of this rapid currency devaluation and poor liquidity, with its headline earnings taking a massive hit.Asked whether MTN’s circumstances would change anytime soon, FNB Wealth and Investments portfolio manager Wayne McCurrie said, “You just don’t know.”

MTN MTN Nigeria Nigerian Communication Commission (NCC) Nigerian Naira Business Telecoms

 

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