Hold, but be watch­ful

Finweek English Edition - - MARKETPLACE - Ed­i­to­rial@fin­week.co.za

MTN Group re­cently spiked on news that it had fi­nally reached an agree­ment with the Nige­rian reg­u­la­tor to set­tle a fine, orig­i­nally to­talling $5.2bn, for fail­ing to de­ac­ti­vate un­reg­is­tered SIM cards. The fine, which led to the de­par­ture of MTN CEO Si­fiso Dabengwa and se­nior of­fi­cials at MTN Nige­ria in Novem­ber last year, will now to­tal 330bn naira (about $1.17bn at of­fi­cial ex­change rates at the time of writ­ing) and be paid over three years.

As part of the agree­ment, MTN will also list MTN Nige­ria on the Nige­rian Stock Ex­change, which will make it the first multi­na­tional tele­coms group to list in the coun­try.

Set­tling the fine also paved the way for MTN to ap­point new ex­ec­u­tives fol­low­ing the com­ple­tion of a re­view of its gov­er­nance and man­age­ment struc­tures, the com­pany said. This in­cludes the ap­point­ment of three ad­di­tional non-ex­ec­u­tive di­rec­tors and new ex­ec­u­tives to “strengthen man­age­ment, en­hance gov­er­nance and aid strat­egy in the Group”, it said. Rob Shuter, cur­rently CEO of the Euro­pean Clus­ter at Voda­fone, will join MTN as CEO in 2017, while God­frey Motsa, chief of­fi­cer for con­sumer busi­ness at Vo­da­com, will join the group as vi­cepres­i­dent for South and East Africa. MTN is also ex­pected to name a vice-pres­i­dent of merg­ers & ac­qui­si­tions and strat­egy, a newly cre­ated po­si­tion, be­fore the end of June.

With the set­tle­ment of the fine, the planned list­ing of MTN Nige­ria and the ap­point­ment of new ex­ec­u­tives and di­rec­tors, MTN’s woes may be cul­mi­nat­ing. How­ever, MTN must trade through the 15 275c/share ma­jor re­sis­tance level to pos­i­tively end its short­term con­sol­i­da­tion – if so, in­vestors could ini­ti­ate a neu­tral long. Above 16 120c/share – in­crease po­si­tions ag­gres­sively as gains to 17 350c/share could be rapid – thereby end­ing 20 months of bear­ish­ness. Note, if MTN bat­tles to trade above 16 120c/share, it could ca­pit­u­late back to the 12 150c/share prior low in­stead.

Si­fiso Dabengwa For­mer CEO of MTN

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