Shares of Airtel Africa, subsidiary of Indian-based Bharti Airtel, extended losses to the seventh trading session Wednesday on the London Stock Exchange (LSE) despite an imminent inclusion to the league of mid-capitalized stocks on LSE.
FTSE Rusell, a global indexes provider and trading name of London Stock Exchange Group, announced Monday that the telco along eight other companies will join the FTSE 250 index effective Monday, September 23.
The FTSE 250 index is a capitalization-weighted index consisting of the 101st to 350th largest companies on LSE. Promotion and demotion to and from the index are conducted every quarter- March, June, September and December.
Airtel Africa shares declined about 3 percent to 55.80 pence in London on Wednesday.
The telco has plunged 30 percent since it got listed on LSE, grossly underperforming the London equity gauge and FTSE 250 index that has gained 33 percent and 15 percent respectively within the period.
FTSE Rusell disclosed that UK-based Hikma Pharmaceuticals, Meggit, Polymental and six others will be upgraded to FTSE 100 index due to the September quarterly review, while Direct Line Insurance Group, Marks & Spencer as well as Micro Focus International are among those downgraded to FTSE 250 index.
The quarterly review is to ensure the indexes reflects the true state of the London equity market and forms an essential component to the management of the indexes.
Airtel Africa earlier raised £595 million through an initial public offer (IPO) that was oversubscribed and saw interests from global investors, after which its shares plunged 15 percent on debut trading in London.
Analysts say Airtel Africa’s poor debut on LSE is due to the unfavourable market conditions in UK and more so European IPOs have been lacklustre this year.
The listing of Airtel Africa added over N1 trillion to the market value of the Nigerian Stock Exchange (NSE), making the telco the third-most capitalized stock on Lagos bourse behind MTN Nigeria and Dangote Cement.
It gained the maximum allowable 10 percent on debut trading session in Lagos, but saw gains reverse by same 10 percent the next trading day. Since then, it remains flat at N323.50/share.
Airtel Africa is the second-biggest mobile operator in Africa with presence in 14 nations including Nigeria, which contributes over 35 percent to group revenue.
A dive into its earnings report for the quarter ended June 30, 2019 showed revenue grew 10.2 percent (constant change) to $795.9 million from $744.5 million a year, earlier making it the sixth consecutive quarter of double-digit constant currency growth.
Sales proceeds in Nigeria rose 22 percent to $312.9 million and that of East Africa up 4 percent, helped offset the impact of an eight percent decline in Rest of Africa’s top-line on group revenue.
Ragthunath Mandava believed that the telco will continue to sustain revenue and profit growth across voice, data and mobile money segments in the medium term.
Its subsidiary, Airtel Nigeria, with 26.81 percent market share dethroned Globacom (26.7%) as Nigeria’s second-biggest mobile operator according to latest figures by Nigerian Communication Commission (NCC).
Israel Odubola
