MTN Nigeria, which did not join the Nigerian Stock Exchange until 20 May 2019, has rapidly risen to become one of the most valued companies on African financial markets, with a market capitalization currently worth $5.83 billion. The company has seen its value rise above that of its parent company since August 9, 2019.

MTN Nigeria is attracting many investors because of the revenue prospects they expect from it. The company indeed has a trusted shareholder base including the South African Public Investment Corporation and the British Commonwealth Development Corporation. However, MTN Nigeria offers greater opportunities to its stock market shareholders.

Its shares are fairly liquid on the Lagos financial market. A little over a billion of its shares have been traded there since its IPO, with a total value of 127.36 billion naira ($326.5 million). MTN Nigeria is also confirming investors' expectations with a strong financial performance. For the fiscal year 2019, its net profit was 202.11 billion naira ($558.3 million at the exchange rate at that time), up 39%.

The company's debt continues to be a concern as it hampers the ability to distribute dividends in the future by increasing financial expenses. Strictly from resource allocation by investors, the MTN Nigeria shares have room for growth. Its price to earnings per share ratio is 11.8x, while for the same revenues, Maroc Telecom has a market value of 45.8x.

Also, the company remains less valued than Safaricom, the Kenyan subsidiary of the South African group Vodacom, which is worth $10.6 billion on the Nairobi Securities Exchange. However, it achieved a better turnover ($3.12 billion) than the Kenyan operator ($2.5 billion) over the 12 months ending March 31, 2020.

Idriss Linge