Listed MTN shares commence trading on secondary market

BY: Suleiman Mustapha & Kester Aburam Korankye

The historic listing of MTN shares on the Accra bourse ends the two-year drought on the Ghana Stock Exchange (GSE), which recorded a 52 per cent dip last year.

The listing of the telecoms company is therefore is expected to bring some excitement to the market and increase the GSE market captalisation by some 16.4 per cent, from GH¢55.97 to GH¢65.19 billion.

This means that the public quotation of MTN shares alone on the GSE would raise the market captalisation of the exchange by over GH¢9.22 billion.

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Deputy Managing Director of the GSE, Mr Ekow Afedzi did not mince words when he stated that the listing would improve liquidity on the market.

“For us at the GSE, we are delighted to see such companies raise capital and list because investment in viable businesses like MTN lead to wealth creation for Ghanaians”, he said.

Mr Afedzi however told the <I>Daily Graphic<$> that MTN shares could still be traded on the secondary market using the mobile money platform.

The listing means that MTN has officially began trading its shares after a successful Initial Public Offer (IPO) that raised GH¢1.15 billion.

The historic GH¢1.15 billion realised from 128,152 applicants is the biggest in terms of value and volume in the history of the GSE.

The Chief Executive Officer (CEO) of MTN Ghana, Mr Selorm Adadevoh, addressing a gathering on the trading floor of the GSE in Accra today (September 5) to mark the beginning of the firm’s affair with the stock market said the historic feat chalked was a result of strong collaboration between the various stake holders of the company.

“The company since its establishment in the Ghanaian market has always been on a consistent winning spree no because of anything but because of the great collaboration we have enjoyed from all the people who have an interest in the business,” he said.

The historic offer

MTN set out on May 29 this year to raise some GH¢3.4 billion through an IPO but ended up with GH¢1.15 billion which was still in excess of the 10 per cent success rate of the targeted amount.

Given that an IPO is not supposed to raise the full amount targeted because it is dependent on demand and supply dynamics, the amount realised is a record on the local market since the inception of the GSE in 1989.

The telecom operator offered 4,637,394,533 ordinary shares valued at an Offer Price of GH¢ 0.75 per share but in the first trade of 100 shares on September 5, the stock rose 4 percent to GH¢0.78.

The shares offered was 35 per cent of the firm which had over 17.83 million subscribers with a market share of approximately 55.09 per cent as at December 2017.

Largest shareholders

In total, there were 128,152 applicants for shares of which 127,826 were Ghanaians and contributed GH¢ 443,631,446.25, making MTN the company with the largest number of Ghanaian shareholders listed on the GSE.

However, with only 326 non Ghanaian applicants contributing GH703 million, representing 61.31 per cent of the total amount realised, there are concerns that it could have a negative effect on the cedi when investors begin repatriating their profits.

However, Mr Adadevoh said the high patronage of foreigners in the IPO was an indication of the attractiveness of the economy and will boost liquidity in the local equities market.

“We are also happy that we attracted foreign investors, which is indicative of the attractiveness of the Ghana economy,” he said.

Mobile Money

According to Mr Adadevor, the success of the IPO and the subsequent historic listing was partly because of the use of mobile money to buy shares which afforded many people who would not ordinarily have access to the capital markets the opportunity to participate.

“As you already know, this is the first time that Mobile Money has been used to buy shares in an IPO (and subsequently trade them) anywhere in Africa OR the world over and this contributed largely to the success of the IPO,” he said.

In all, 108,434 applicants subscribed through the MTN Mobile Money portal representing 84.6 per cent of the total number of applicants.

MTN’s successful IPO which employed the use of mobile money could be a precursor to opportunities in adopting mobile money for share offerings, especially given the pace of mobile money adoption over the past decade.

Mobile technology

The fact that 84.6 per cent of applicants chose to use the mobile money channel demonstrates another use case for Mobile Money and will accelerate financial inclusion in the capital markets.

He hinted that the Exchange would take advantage of the mobile technology to introduce mobile trading of securities as MTN had done.

MTN board chairman, Dr Ishmeal Yamson assured the investing public that the company would not let thethem down and that the outstanding performance would be the greatest motivator for other businesses to list.

“At MTN, we have an unquestionable good corporate governance and we have a duty of care and diligence”, be boasted.