Rédaction Africa Links 24 with Ibrahim Ramalan
Published on 2024-03-02 11:11:36
MTN Nigeria Plc, a leading telecommunications company, recently reported a significant loss before tax of N177.8 billion, marking a stark contrast to the pre-tax profit of N518.8 billion recorded in the previous year. The company attributed this loss to a substantial foreign currency loss amounting to N740 billion, a sharp increase from the N81 billion reported in the year before. This represents the first-ever loss incurred by the company since it became a quoted entity in Nigeria.
The drastic downturn in MTN’s financial performance was primarily influenced by operational changes in the Nigerian foreign exchange market, particularly the adjustment made to the segmented/parallel forex structure by the Central Bank of Nigeria in June 2023. The company disclosed that it utilized an official exchange rate of N907.11 to the dollar as at 31 December 2023, hinting that the loss could potentially widen if the prevailing exchange rate between the naira and the dollar persists until the release of its Q1 results in March.
The ramifications of MTN’s loss reverberated throughout the equity market, with selloffs in the shares of prominent companies like Dangote Cement, Conoil, and MTN Nigeria contributing to a 1.23% decline in the market performance indices. Investors bore the brunt of this downturn, losing N672 billion or 1.24% as the market capitalization dwindled from N54.707 trillion to N54.035 trillion. The All-Share Index also took a hit, decreasing by 1.24% to settle at 98,751.98, down from 99,980.3 in the preceding session, causing the Year-To-Date return on the index to drop to 32.07%.
Further exacerbating the negative trend in the market were selloffs in companies such as Dangote Cement, MTN Nigeria, Fidelity Bank, Sovereign Trust Insurance, and Nestle. Consequently, trade turnover saw a decline of 22.01% in value compared to the previous session, with a total of 367.62 million shares valued at N6.78 billion exchanged in 9,168 deals.
On the activity front, specific companies took center stage with Dangote Cement and Conoil leading the losers table by percentage terms, closing at N135 and N90.90 per share, respectively. MTN Nigeria followed closely, shedding 9.96% to close at N200.70, while other companies like Thomas Wyatt Nigeria and Sovereign Trust Insurance also experienced significant losses.
However, amid the market turbulence, there were pockets of positivity as some companies managed to gain ground. The Initiative Plc and FTN Cocoa Processors led the gainers table by 10% each, closing at N1.98 and N1.65 per share, respectively. This positive trend continued with other companies like Juli Plc, Champion Breweries Plc, and PZ Nigeria posting gains ranging from 9.93% to 9.97%.
In terms of trading activity, companies like Transcorp, Access Corporation, United Bank of Africa (UBA), Fidelity Bank, and First City Monument Bank (FCMB) emerged as the most active in terms of volume and value of shares traded.
Despite the market challenges, the day ended on a positive note in terms of market breadth, with 43 gainers outnumbering eight losers on the trading floor. This suggests a ray of hope amidst the prevailing market volatility and uncertainty.
Read the original article on DailyNigerian.com
