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0 News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/mtn-nigeria-shares-surge-amid-recovery-from-exchange-rate-struggles/
MTN Nigeria has seen a remarkable recovery in its stock performance, with shares surging by over 20% in early January 2025.
This rise follows a challenging period in 2024 when the stock dipped to a low of $0.36 in November, largely due to the volatile foreign exchange environment that severely impacted the company’s financials.
The surge in MTN Nigeria’s stock price, which as of January 10, 2025, stands at $0.53, marks a recovery of more than 40% from its November 2024 low. The increase brings the stock close to the $0.61 resistance level, a price point it had reached earlier in 2024.
The upswing comes as part of a broader market correction after the company’s struggles with exchange rate fluctuations. MTN Nigeria’s most recent earnings report for the nine months ending September 30, 2024, highlighted a staggering 90.8% year-over-year rise in net foreign exchange losses, amounting to $1.18 billion, compared to $619.5 million in 2023. These losses were attributed to the turbulent foreign exchange market.
To counter these challenges, MTN Nigeria diversified its financing strategy, tapping into commercial paper issuances to bolster its working capital. Between November and December 2024, the company successfully launched multiple rounds of commercial paper issuances, including Series 11 and 12, Series 13 and 14, and Series 15 and 16, each targeting $64 million. All series were oversubscribed, reflecting strong investor confidence in MTN Nigeria’s financial management amid challenging macroeconomic conditions.
The company’s stock showed notable volatility throughout 2024, beginning the year with a solid performance at $0.58 in January, supported by a robust trading volume of 52 million shares. However, the price dipped steadily, reaching its lowest point at $0.36 in November, due in large part to external macroeconomic pressures.
The reversal began in December, as the stock recovered to $0.40, coinciding with the oversubscription of its commercial paper issuances. This rebound, which continued into the new year, has been attributed to growing investor optimism following the successful fundraising efforts, which were well-received by the market.
MTN Nigeria’s recovery also aligns with its strategic capital-raising efforts. The company has actively utilized its $541.7 million Commercial Paper Issuance Programme, with Series 15 and 16 raising $64 million in December 2024. These funds are crucial for supporting the company’s ongoing operations and long-term growth objectives amid an uncertain economic environment. Previous rounds of commercial paper issuances, such as Series 13 and 14, raised $131.8 million, far surpassing their initial targets due to strong demand from investors.
MTN Nigeria’s continued ability to raise funds through commercial papers is vital for navigating the country’s economic challenges, offering the company flexibility in its capital structure. This funding will support the company’s strategic growth initiatives as it aims to stabilize and strengthen its financial position in the face of external macroeconomic headwinds.
With market conditions improving and investor sentiment bolstered by its financial strategies, MTN Nigeria now looks to revisit its January 2024 stock price of $0.61 and potentially surpass it as the company continues to adjust to evolving market conditions.
News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/mtn-nigeria-shares-surge-amid-recovery-from-exchange-rate-struggles/
