MTN cleared for takeoff
With MTN cleared of any wrong-doing in a bribery case brought against it by Turkcell earlier this month, it should free the company to make further gains on the local exchange, the JSE with some analysts predicting a target of R200 may be reached in 2013.
At the same time, the company has announced that it is actively evaluating an opportunity to participate in a tender process to acquire one of two new telecoms licences being issued out by the Myanmar government.
Shares in MTN rallied yet again on Tuesday (5 February), surging R4.96 – or 2.78% – to a record level of R183.67, having collected R2.77 or 1.57% on Monday.
MTN is up from R135.40 in its year-to-date comparison, and now boasts a market cap of R345.94 billion.
Chris Gilmour, an analyst at Absa Investments said of the group’s aspirations in Myanmar: “It seems MTN is not afraid to get its hands dirty and go into dodgy areas. They have paid their school fees so to speak, and it looks like a very good opportunity. Myanmar holds huge potential.”
Gilmour noted that the country was changing its regime (for the better) quicker than many people realised.
An analyst at PSG Konsult concurred. “Myanmar is being liberalised at a rapid pace. There would be a lot of positives to be gained if MTN were to secure a licence,” he said, adding that investors would likely take a bullish view on such a move.
Myanmar
In January, Reuters reported that Myanmar’s former telecommunications minister and dozens of officials were under investigation for graft, in a landmark probe in the fast-reforming country long ranked among the world’s most corrupt.
A senior government official, who asked not to be identified, told Reuters that current and former ministry staff were being questioned “in connection with malpractice in the nationwide telecommunications network”.
Investigations into corruption are almost unheard of in Myanmar, which ended 49 years of military rule in March 2011.
Myanmar’s Communications and Information Technology Ministry said it aims to lift its mobile penetration rate, currently at about 10%, to about 80% by 2016 through the new licences. The country has a population of approximately 50 million.
R200 a share in 2013
Earlier in January, analysts suggested that shares in MTN had the potential to surpass R200 in 2013, citing potential growth in its largest market by customers, Nigeria.
An analyst said that R200 per share was “absolutely achievable” in 2013 if the group could overcome political and network issues in Nigeria, its biggest market by subscribers at approximately 46 million.
He pointed out that MTN might be prevented from reaching a target of R200 if there was further fall-out in Iran.
Hoffmann Committee
At the start of February, MTN released the findings of the Lord Hoffmann committee, which was set up to review the allegations made by Turkcell in the legal case brought against MTN in the United States.
Following a year-long investigation, Lord Hoffmann’s Committee determined that the Turkcell allegations were without foundation.
“Lord Hoffmann concluded that he found nothing in the conduct of MTN over this period that puts at question MTN’s integrity or propriety,” MTN said.
More on MTN
Hoffmann report clears MTN in Turkcell case
MTN and Naspers lead in emerging markets
MTN targeting South East Asia?
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