MTN shares to hit R200 in 2013?

Shares in mobile operator MTN have the potential to reach a barrier of R200 in 2013 according to an analyst, citing potential growth in its largest market by customers, Nigeria.

At close of play on Monday (7 January), shares in MTN closed at R178.80, having reached a record best figure of R182.90 earlier in the session. MTN’s market cap has stretched to R336.77 billion.

The All Share Index closed a touch off its record high of 40,429 achieved on Friday (4 January).

MTN is up nearly R50 rand over the past year, having opened at R132.35 on 7th January amid its impressive results and “high quality” dividend policy in recent times, the analyst said.

In a quarterly update in October 2012, MTN lifted its subscribers to 182.7 million across the 21 countries in Africa and the Middle East. Its South African subscriber base improved 4.1% quarter on quarter to 24.498 million, and from 20.968 million in Q3, 2011.

The analyst said that R200 per share was “absolutely achievable” in 2013 if the group can overcome political and network issues in Nigeria, its biggest market by subscribers at approximately 46 million.

In October 2012, the group said that network quality and capacity was a priority in Nigeria, adding that this would be a key focus over the next six to 12 months. The operation in Nigeria pledged to invest $1.3 billion in new infrastructure and expansion in 2013.

The analyst noted that MTN might be prevented from reaching a target of R200 if there was further fall-out in Iran.

MTN Group noted in October 2012 that a United States federal court ruling put on hold a lawsuit by Turkcell against the SA operator alleging bribery, pending a US Supreme Court ruling whether the case can be heard in a US court. MTN said that it will continue to oppose the claim.


The analyst said that Vodacom also had potential to reach R150, citing its attractive dividend policy, but would be fully valued at that price.

He noted comments by Vodacom CEO, Shameel Joosub, made at the back end of last year regarding its renewed interests in Africa. Joosub said the group had “cracked the Africa model” and was ready for a more aggressive assault on the continent.

Joosub said that Vodacom would adopt a two-pronged approach in Africa, namely to continue to drive further penetration within the markets it is currently in, and seek new opportunities “more proactively” outside its current operations.

On Monday (7 January), Vodacom closed at R127.97 on the JSE, giving the group a market cap of R190.41 billion, and near its record best level of R129.88 achieved on 30 December 2012.

Shares in Vodacom have increased from R89.45 to its current price over the past year alone. The analyst pointed out that Vodacom’s ambitions outside of SA would be key in 2013.

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MTN shares to hit R200 in 2013?