Investors Jostle for MTN Nigeria Shares After FG Drops $2bn Tax Case

By Modupe Gbadeyanka

The huge demand for shares of MTN Nigeria Communications Plc at the Nigerian Stock Exchange (NSE) has pushed the price higher, Business Post reports.

As at the time of filing this report on Monday, January 13, 2020 (11am Nigerian Time), the company’s stocks have already gained 10 percent (the maximum movement for the day), trading at N127.60 per unit against N116 per share it traded last Friday, indicating a growth of N11.60.

The jostling for the telecoms’ equities was caused by news last weekend that the Attorney General of the Federation (AGF) had withdrawn the $2 billion tax case against the firm in 2018.

Share price of MTN Nigeria had been going down at the local bourse in recent times, almost reaching the N90 it listed the equities in May 2018 from a 52-week high of N159.30 per share.

But news of last Friday’s withdrawal of the tax case by federal government of Nigeria has helped the share price to rise as a result of increased appetite of investors. The demand for the stock is continuing to grow.

“MTN Nigeria has been informed by means of a letter received by its legal counsel and dated 8 January 2020, that following careful review and due consultation with relevant statutory agencies, the AGF has decided to refer the matter to the relevant authorities, being the FIRS and the NCS, with a view to them resolving the issues. Accordingly, the AGF has withdrawn its letter of demand for the aforementioned $2 billion that was issued in August 2018,” the statement issued by the company last Friday had said.

In the statement, the MTN Group CEO, Mr Rob Shuter, had stated that, “We appreciate this decision of the Attorney General which paves the way to an orderly and amicable resolution of this matter,” noting that, “MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate.”

Business Post reports that before this article was published (at about 11.15am), investors had already traded 8.9 million units of the stock valued at N1.1 billion and more transactions are expected to be carried out before the close of business by 2.30pm.

MTN Nigeria is the second most capitalised company on the local stock exchange, behind Dangote Cement and above BUA Cement, which claimed the third spot last Thursday when it was listed by the NSE, displacing former occupier of the position, Nestle Nigeria.