Acceptable numbers obscured

Some analysts remain bullish about the share despite Nigerian authorities’ financial demands and other concerns

The last time MTN’S share price dipped below R90, global stock markets were at the tail end of one of the biggest crashes in history.

The shares of the group, then chaired by

Cyril Ramaphosa, were dragged to R84.15 in March 2009 — the month the JSE plummeted to a six-year low.

Nearly a decade later, SA’S main bourse has more than doubled in value, but MTN looks to be back at square one, despite having doubled its subscriber base to 225-million people.

The cause of the latest plunge below R90 is well documented: authorities in the group’s most profitable market, Nigeria, want another $10.1bn from the operator, which is yet to pay the final instalments of a $1bn fine from three years ago. The Central Bank of Nigeria is now trying to get MTN to return $8.1bn of “illegally” repatriated dividends, while the country’s attorney-general says MTN owes $2bn in taxes.

There are indications that the Nigerian government may be softening its tone, and the consensus among analysts is that a far more reasonable settlement will be reached in the next few months.

Given that MTN’S revenues this year are likely to be nearly 30% higher than they were in 2009 — thanks largely to the hugely expanded subscriber base — some investors may consider this an opportunity to buy the stock at a discount to its potential.

Based on some metrics, such as future earnings projections, MTN is hardly expensive relative to its peers. Yet most fund managers are keeping a safe distance.

Lester Davids, a trading desk analyst at Vunani-owned stockbrokerage Unum Capital, says the broker does not at the moment hold any MTN in its portfolios.

Davids says the Nigerian central bank’s