Picture: FINANCIAL MAIL/FREDDY MAVUNDA
Picture: FINANCIAL MAIL/FREDDY MAVUNDA

MTN’s shares have risen about 16% so far in April, setting the mobile operator on course for its best monthly performance in almost three years, as the value of the mobile operator’s stake in e-commerce business Jumia has nearly tripled in just three days.

Jumia, which operates online fashion retailer Zando in SA, listed 13.5-million American depositary receipts at $14.50 each in New York on Friday, April 12. By the close on Tuesday, Jumia’s shares were valued at $43.04, an increase of 197%.

“MTN is very pleased that Jumia has successfully listed on the New York Stock Exchange, a landmark transaction being the first African start-up to list on the NYSE,” the company said.

“The listing provides market reference to value for Jumia, which has not previously been visible, and this should reflect into the MTN Group share price,” the company said.

This means MTN’s roughly 30% stake in the company has swollen to about $1bn (R14bn), or about R7.40 a share.

MTN’s share price, which was dented by regulatory troubles in Nigeria in the second half of 2018, has risen from R97.50 to R103.39 so far this week.

This is the first time the network operator’s shares have crossed the R100 mark since August 2018, when Nigeria’s central bank demanded it return $8.1bn in dividends, sending its stock crashing to below R70 by mid-September.

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As part of its plans to sell noncore assets over the next three years, MTN is expected to exit its Jumia stake.

As to whether the firm will hold onto its stake in Jumia, the company said: “MTN is clear that although we will seek to have tight operational integration for our e-commerce investments, we are not long-term strategic holders of the assets.

“Specific to Jumia, we are pleased with the IPO outcome. We have a six-month lock-up period where we can’t sell our shareholding. Post that period we will apply our minds on what to do with the investment. We are not under pressure to make a decision.

“Our focus is on building and investing in our core business going forward and the great growth opportunities we see across voice, data, digital, fintech, wholesale and enterprise.”

With Karl Gernetzky

hedleyn@businesslive.co.za