MTN Nigeria and BUA Cement shares have reversed to their Initial Public Offering (IPO) price of N90 and N35 respectively as Airtel Africa shares is now trading below IPO price as coronavirus selloffs deepens.
MTN made history when it became the first mobile operator to list on the Nigerian bourse, becoming the second largest company on the exchange in terms of market capitalization. The investor excitement bore out a desire to own a piece of the country’s biggest telecommunication company set the stage for a spike in the telco’s share price.
The high demand for the scarce MTNN shares led to a rise in the value of the stock by 20% in just two days of trading and 60% on the fourth day. On the sixth day the stock peaked rising from its IPO price of N90 to trade at N149 per share.
Read also: MTN to push ahead with Nigeria IPO amid market rout
The entry of the Telco giant raised some eyebrows with public investors and stakeholders reportedly alleging market manipulation speculating that either shares were being hoarded to propel a higher share price before any share offering through an IPO or that the Exchange was conniving with existing shareholders of the company to avoid releasing larger share volumes for trading.
However, since the outbreak of the coronavirus in Nigeria, MTNN has dropped about 28 percent from N125 on January 24 to
N90 on March 30, reversing all gains earned since the company’s IPO.
Investors fear that with the continued increase in total number of confirmed cases and the country nearing a total lock down, analyst foresee the stock dropping even further as a slowdown in economic activities weigh on stock performance in the country.
BUACEMEM, the third largest company on the bourse by market capitalization also traded at its IPO price of N35 yesterday reversing all gains. BUACEMEN since the coronavirus outbreak in Nigeria has dropped 700 basis point to trade at N35.30k on the March 30 2020.
Meanwhile, AIRTELAF another newly listed company on the Nigeria Stock Exchange traded below IPO price at market close on March 30 2020, having dropped 37 percent since it peak on the first day of trading at N399.30k. The fourth largest company by market capitalization on the Exchange opened at N363 on its first day of trading but currently trades at N298 per share amidst deepened coronavirus selloffs posting a negative return of 31% since its IPO.
