Shares in telecoms giant, MTN, have risen 8% at market open on Thursday – the first trading of the stock since the firm agreed to pay over R700-million to settle a row with Nigeria’s central bank.
The bank in Nigeria – MTN’s biggest and most lucrative market – had been demanding over R100 billion from Africa’s biggest telecoms company.
It accused MTN of endangering Nigeria’s Foreign Exchange Reserves by taking the money out of the country.
Africa specialist, Victor Kgomoeswana, explains: “The lesson for MTN – when you do business in Nigeria, make sure everything is written down before you proceed. But MTN shareholders will now be happy. The management of MTN believes they can now go and claim the $53-million from its own banks because they can say you should have told us this was not in line. The share price is R85 or so. It opened the year at R120 so down a huge fraction in August. It is going to have to recover. ”
But Duncan Mcleod, who writes for techcentral, believes that when the markets opened on Thursday it recovered. But it’s going to be a long recovery climb to the prices it used to be.
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