MTN Nigeria Plc and Airtel Africa collectively lost ₦271bn in market capitalization in November 2024 following sell pressure on their shares.
The losses highlight the impact of shifting investor sentiment as speculators redirect funds from equities to money market instruments in pursuit of higher yields following an interest rate hike.
The sell-off reflects broader market dynamics, where increased interest in fixed-income securities has weighed heavily on equities, particularly in the telecommunications sector.
Airtel Africa closed its final trading session in November at N2,156.90 per share, down from N2,200.00 on October 31. The decline reduced the company’s market capitalization from N8.267trn to N8.105tn, representing a loss of N162bn or 1.96 per cent month-to-date.
MTN Nigeria also faced significant losses, with its share price dropping from N175.10 in October to N170.00 at the end of November. The telecom giant’s market capitalization fell from N3.676tn to N3.569tn, marking a N109bn or 2.96 per cent decline.
The losses in Airtel and MTN shares contributed to a broader bearish trend on the Nigerian Exchange (NGX). By the close of the last trading week in November, the All-Share Index (ASI) had declined by 33 basis points (bps) week-on-week (w/w) to settle at 97,506.87 points.
Index heavyweights such as MTN Nigeria (-1.16 per cent w/w), ARADEL (-1.67 per cent w/w), and SEPLAT (-6.02 per cent w/w) experienced notable sell-offs, which overshadowed gains in ZENITHBANK (+0.45 per cent w/w), FBN Holdings (+3.54 per cent w/w), and UBA (+1.08 per cent w/w). Consequently, the NGX’s market capitalization dropped by ₦184.73bn w/w to close at N59.11trn.
In a Friday trading session, the market shed an additional 28 bps, losing N167.88bn in market capitalization. The year-to-date return of the ASI fell to 30.40 per cent.
Despite the market downturn, trading activity showed signs of resilience. Turnover rose by 39.51 per cent compared to the previous session, with 515.49m shares worth N15.08bn traded across 7,554 deals.
FBN Holdings led the volume chart with 126.02m shares traded, while SEPLAT topped the value chart with transactions worth N7.74bn.
The telecommunications sector, a key driver of the Nigerian economy, has faced heightened volatility due to macroeconomic uncertainties and fluctuating interest rates. The sell pressure in November reflects investors’ recalibration of portfolios amidst tightening monetary policy.
Telecom giants like MTN and Airtel remain critical components of the market, but their performance highlights the vulnerability of even the largest firms to broader economic shifts.
Market analysts suggest that while the current bearish sentiment may persist in the near term, a stabilization in interest rates or improved macroeconomic conditions could renew investor confidence in equities.
In the meantime, telecommunications stocks may continue to experience fluctuations as investors weigh their long-term growth potential against immediate macroeconomic headwinds.