MTN Nigeria rated +Aa as stocks defy $2bn tax case
AN ‘Aa+’ rating has been assigned to MTN Nigeria Communications Plc by Nigeria’s first credit rating agency and a pan African leader in credit reports, Agusto& Co. limited, whose strong credibility presence and ratings are globally accepted in the country and across the globe.
This rating was coming even as the shares of MTN Nigeria Plc on the Nigerian Stock Exchange (NSE) seem to recieve boosted investors’ confidence after the network operator’s stock closed the market this week on a high compared to last week after the postponement of MTN Nigeria‘s $2 billion tax case.
The telecommunications company’s stock price increased by 0.39 per cent by the close of market on Friday, settling at N129, after previously recording a day low of N122.6.
However, this was an unimpressive run for MTN Nigeria which started the week on Monday, June 24, with N130 per share price.
MTN Nigeria reported a drop in the previous weeks, crashing to N130 on Thursday from N132 per share. It then remainned flat before dropping again on Tuesday and Wednesday this week, recording N129 and N128.50 kobo respectively.
However, a new boost came in for MTN Nigeria on Friday, June 28 with the announcement of a shift in the case against the office of the Attorney General of the Federation, causing the stock of the company to rebound, peaking at N129. This shows an improvement in investors confidence, as the new date chosen for the continuation of the case is October 29, 2019.
The outcome of the case which was supposed to begin on Wednesday would have had a significant effect on investors’ interest in MTN Nigeria’s stock. Either way, the request for more time by the lawyers for the Attorney General’s Office had a positive impact on the stock.
Meanwhile a statement from the Agusto& Co. limited disclosed that the rating assigned to MTN Nigeria was hinged on its very strong financial condition, which is characterized, by very good profitability, strong cash flow, low leverage and experienced and stable management team.
It was further stated that the rating took into cognisance MTN Nigeria’s market leadership, its extensive network coverage and growing voice subscribers as well as active data users.
However, Agusto & Co emphasised that the telco was prone to regulatory interference, which has led to volatility in its profitability in recent years.