MTN falls in line with naira’s devaluation

STOCKS slipped yesterday, driven by losses in Africa’s largest telecoms operator MTN after the devaluation of the Nigerian currency, the naira.

The benchmark Top40 index fell 0.35 percent to 44 751.51. The all share dropped 0.3 percent to 50 355.78.

Nigeria is the biggest of MTN’s 22 operations across Africa and the Middle East and contributed more than a third of the company’s R72.8 billion revenue in the first half of this year.

The Nigerian central bank devalued its currency by 8 percent on Tuesday as the oil-producing country took a hit from falling oil prices.

Shares of MTN dropped 1.4 percent to R222.50.

“Any earnings that MTN will make in Nigeria will now be worth less, hence the movement. It should have a long-term effect on MTN shares,” said Kyle Dutton, a stockbroker at Mercato financial services.

Overall the stock market fell for the third straight day.

Mining group Exxaro was the biggest loser, dropping 3.18 percent to R109.58 Petrochemicals group Sasol fell 1.85 percent at R509.80 at the close of trade, on falling Brent crude prices.

Trade was active with 206 million shares trading hands, above last year’s daily average of 176 million shares.