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Debt pounds MTN shares

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JOHANNESBURG – MTN plunged nearly 8 percent on Wednesday as its high debt and offshore woes rattled the markets, despite the group increasing its subscriber base by 6 million heads in the six months ended June.

The group’s net debt increased to R69.8 billion in the period under review, compared with R57.1bn at the end of last year.

The group said the surge in debt was due to the weaker closing rand and the payment of the final dividend under the previous dividend policy.

MTN’s forex linked losses amounted to R600 million in the period under review.

Chief financial officer Ralph Mupita said the group expects an improvement in cash flows in the second half of the year.

“We expect stronger business performance from the operations to contribute to this.

“The dividends and loan repayments from key markets such as South Africa and Nigeria, proceeds from the sale of the Cyprus business and proceeds from initial public offerings (IPOs) to also contribute,” Mupita said.

The company in May launched the IPO of MTN Ghana and said it expects to list, subject to final regulatory approvals next month.

The group said it had “made good progress” on its plans to list in Nigeria, but could not commit to time frames with chief executive Rob Shuter merely saying it was “complex”.

The company disposed of its Cyprus business for approximately €260m (R4.03bn).

Jordan Weir, a trader at Citadel, said the negative market reaction to the company’s interim results was largely due to the firm’s rising debt situation.

US sanctions “This negative was coupled with the challenge it is facing repatriating money from IranCell, due to US sanctions being placed on Iran again by Donald Trump.

Exchange rate volatility and softer revenue streams coming out of Nigeria were highlighted,” Weir said.

The group’s future cash flow would also come under pressure owing to the US decision to withdraw the Joint Comprehensive Plan of Action with Iran.

The decision saw the US re-impose economic sanctions on the country.

The first round of sanctions came into effect this month and the second round will come into effect in November. Dobek Pater, from Africa Analysis, said MTN’s drawback in Iran is the depreciating local currency.

“Apart from the currency issue, Iran has demonstrated good growth. “I don’t know what contributed to the declining customer numbers in Cameroon, but I expect that this market has become increasingly competitive with the expansion of Viettel,” Pater said.

MTN said it would struggle to repatriate R3.4bn in accumulated dividends and loans from its Iran joint venture due to the US sanctions.

This is as the group reported a 7 percent decline in interim profits. “Opportunities for repatriation within the legislative framework continue to exist. However, MTN Group has not factored these into our cash flow forecasts,” Shuter said. As of the end of the period under review, the group had 223.4 million subscribers, compared to 217.2 million at the end of 2017.

The company spent R11.4bn in capital expenditure in the period, rolling out a total of 3 603 3G and 3 660 4G sites. MTN said its voice revenue increased by 6.2 percent in the period, while its data revenue surged 26.7 percent. Asief Mohamed, chief investment officer at Aeon Investment, said MTN’s interim results reflected the positive momentum of its Bright strategy.

“The decline in the headline earnings per share was mainly due to foreign exchange losses,” Mohamed said. “There remain concerns around the South African enterprise business. The internet business is at the early investment stage, so one should expect losses. Once the internet business achieves scale it could generate significant profits.”

The group declared an interim dividend of R1.75 a share and maintained its stance that it will declare a total dividend of R5 a share for 2018.

-BUSINESS REPORT

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The Egyptian Exchange to witness 3 private offerings in 2019

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Head of the Egyptian Stock Exchange Mohamed Farid – File Photo

CAIRO – 18 March 2019: The Egyptian Exchange (EGX) will witness three big offerings this year, including two listings worth LE 14 billion, Chairman of EGX Mohamed Farid said.

Farid added during his speech at the American Chamber (AmCham) that three private firms expressed their desire to enter the market, noting that the procedures of the offering have started.

He noted that the market value of the first company reaches LE 8 billion and the second one hits LE 6 billion, while the third one is still under evaluation.

About the timing of the offerings, he clarified at Egypt’s real estate industry conference that one of them will finish the procedures of the listing during the first half of 2019, and the other two will be floated in September or November 2019.

Farid stressed on Monday morning that offering the shares of a number of public companies on EGX is important to revive the market.

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Farid added that the delay of listing the shares is not related to the bourse but to the companies themselves and their vision about the timing and the importance of the offering to reflect positively on them.

The chairman of EGX hoped for the completion of the companies’ offerings in different sectors on EGX.

By the end of February, Egypt floated a stake of Eastern Company on EGX, and the public and private offerings on the bourse were completed Wednesday, March 6, with a total value of LE 1.72 billion.

– EGYPT TODAY

 

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FBN Holdings targets foreign stock market

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Mr Urum Kalu Eke, Group Managing Director, FBN Holdings Plc, on Friday said that the group would seek listing in foreign markets where it operates at the appropriate time.

Eke said at a news conference to mark 125th anniversary of First Bank Nigeria Limited in Lagos that the company would liaise with investors and regulators at the right time when opportunities arise.

He said that FBN Holdings would seek foreign listing when the time was right and regulation was also conducive, but would maintain headquarters in Nigeria in line with the vision of the founding fathers.

“These are bold statements aligning with the vision of the founding fathers, in the course of time, we will evaluate opportunities even as we work with the regulators, as we work with investors, with a view that we will continue to maintain headquarters in Nigeria.

“We will spread our network when the time is right and regulation is also conducive, we will be able to make a statement about listing in those foreign markets,” Eke said.

He explained that listing was not something you do without a deliberate plan.

“At the time, the founding fathers set up First Bank in 1894, they have a view of a pan African institution with headquarters in Nigeria with presence across the globe.

“That is why few years after 1894, by 1896 we were in Accra and two years after we were in Sierra Leone, today we have expanded the scope of our coverage, we are in six African countries. We are in Asia and we are in Europe,” he stated.

The News Agency of Nigeria (NAN) reports that FBN Holdings, currently listed only on the Nigerian Stock Exchange, is the non-operating financial holding company of one of the largest banking and financial services organisations in Africa.

He, however, said that the company was very proud of the achievements of its flagship subsidiary, First Bank of Nigeria Limited.

“We are proud at FBN Holdings of the achievements of our flagship First Bank of Nigeria Limited over the last 125 years, and that makes us at the holding company level the premier and of course the largest financial services group in Nigeria today,” Eke said.

He said that the group played active role in merchant banking and asset management sector as well as in insurance space.

“Just as we celebrating the commercial bank we can list a whole lot of achievements that have been recorded by the merchant bank through FBN Quest group and also the insurance.

“Today, the insurance company is the fastest growing insurance company in Nigeria and we are proud of what they are doing,” he added.

Eke noted that insurance had very low penetration in Nigeria with less than one per cent against 15 per cent penetration in South Africa.

“Talking about the life insurance business, it’s not just about taking insurance to the cities, we are also present across the country, wherever you find First Bank, we have a life insurance staff embedded in those branches

“We are saying we can play a very dominant role in championing insurance deepening in Nigeria, the same thing you can say about our FBN Quest group,” Eke said.

He said that the company had supported the Federal Government and sub-Nationals to raise bonds and capital for infrastructure development.

The group managing director said that through the pedigree of its franchise, it enabled government to raise N200 billion Sukuk bond in two tranches.

“At the holding company level, I need to say that there is so much confidence by the investing public in the brand so we can say today we are the largest in shareholder base,” he said.

He said that FBN Group had about 1.3 million shareholders, comprised of 17 per cent international institutional shareholders and about 36 per cent retail.

Also speaking, Mrs Ibukun Awosika, Chairman First Bank of Nigeria, said that the bank wold remain committed to the development of entrepreneurs to scale up employment rate.

Awosika said that the bank had invested heavily in organising programmes that would enhance knowledge of Small and Medium Enterprises.

NAN

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Jumia, Konga list billion dollars IPOs

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NSE

Jumia and Konga, two major players in the e-Commerce, are creating visible excitement with eye-catching listing of their shares on the international market.

Jumia is planning an initial public offering (IPO) in New York this year which will reportedly see the business valued at $1.5 billion.

Elsewhere, Konga, Nigeria’s biggest Omni- channel e-Commerce group, is also reportedly set for a major listing on either the London Stock Exchange or New York Stock Exchange (NYSE) by the last quarter of 2020.

Konga Group is set for an initial public offering that will see the e-Commerce giant valued at about $3.2 billion, further shoring up the potential of the industry in Nigeria, Africa’s biggest market.

Investigations reveal that Mark Jessey, a prominent stock analyst on NYSE had hinted of the strong possibility of Konga IPO before the end of next year.

A move which, according to him, is a much sought-after one by investors, many of whom have followed within the last eight months the huge strides and trajectory of the business which came under new ownership after the exit of previous majority investors, Naspers and AB Kinnevik.

While Jumia’s successful listing could help MTN reduce its debt which unconfirmed reports indicate to have increased to over five billion dollars in June from about $4.1 billion at the end of 2017, Konga’s imminent IPO is one that should see the business excite a horde of potential investors, going by the current standing of the company.

Commenting on the likely listing of Konga, Chris Uwaje, Africa chair for IEEE World Internet of Things (WIoT), noted that the company has added huge value to the e-commerce landscape which should see its value gross over $3.5 billion.

“Within the last seven months, I am aware that the new owners of Konga have repositioned the company strategically and upped the overall value of the business.

Konga could claim to be unarguably the most structured e-Commerce company in Africa, with huge infrastructure and technology back-bone which is rare in Africa and which is the strength of global players such as Amazon and Alibaba.

“In valuing Konga, you must consider its strategic 360 degrees Omni-channel strategy, their Central Bank of Nigeria-licensed mini bank – KongaPay which I am sure cannot be valued anything less than $750 million and best in Africa digital logistics division known as Kxpress with a nationwide network.

“I know Konga is likely the only company that does about 90 per cent of her long haul and last mile deliveries in the continent,’’ Uwaje said.

Source: NAN

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