MTN loses further ground as Nigeria conflict weighs

Shares in mobile operator MTN Group (MTN) lost further ground in morning trade on the JSE on Monday after Islamist group Boko Haram vowed to continue fighting in Nigeria following a fresh round of attacks on the country’s security services.

In noon trade, MTN Group declined R2.69, or 2.02%, to R130.30 on the JSE having dropped more than R15 since the start of January.

An analyst at Thebe Stockbroking told BusinessTech that the current conflict in Nigeria was unlikely to go away anytime soon. “You can put it down to the problems in Nigeria,” he said of the group’s decline.

“This is not going to end overnight (Nigeria conflict). In some ways, political instability can often be good for cellphone companies as people will use their phones more, but the political tensions in Nigeria and Iran, along with unstable currencies will not be helping MTN,” he said.

The civil unrest in Nigeria, which some have warned could lead to political instability, along with the ongoing sanctions imposed by the west on Iran, has unnerved MTN investors in recent weeks, with the group’s share losing more than 8% in 2012 so far.

Goldman Sachs recently dropped MTN Group from its pan-Europe buy list and cut its rating to neutral.

Nigeria is MTN’s largest territory in terms of subscribers at 41.107 million, while in Iran, through a 49% holding in Iran Cell, the group boasts 33.314 million subscribers and a 44% market share. For the quarter ended September 2011, MTN Group recorded 158.59 million subscribers.

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MTN loses further ground as Nigeria conflict weighs