MTN Nigeria gains 10% on second trading day

MTN Nigeria shares surged by another 10 percent to 108 Naira 90 kobo per share price in its second trading session, sparking excitement among investors. Kayode Omosebi, Team Lead of Financial Advisory at ARM Securities, joined CNBC Africa to discuss the significance of the listing and assess Nigeria's investment climate. The strong performance of MTN shares has generated significant demand, with investors eager to get their hands on the limited shares available, leading to challenges. Omosebi shared insights on the fair value of MTN, suggesting a fair value of 149 Naira and predicting a potential 40% run-up in the share price if it maintains a 10% increase consistently for the next four days. He compared the current market dynamics to previous listings, highlighting the pattern of a strong rally followed by a correction towards fair value, which he estimated to be around 130 Naira. Despite the enthusiasm surrounding the MTN listing, Omosebi cautioned investors to look beyond the hype and consider other undervalued stocks in the market. He noted that while MTN's listing may boost market sentiment temporarily, the underlying concerns about economic fundamentals and policy uncertainty remain. Omosebi emphasized the need for value investors to explore opportunities in fundamentally strong stocks such as Zenith Bank and GT Bank, which offer attractive valuations. He highlighted the potential impact of an MTN IPO in the future, suggesting that it could help balance the market dynamics by increasing supply to meet the current demand. Omosebi expressed optimism about the prospects of more IPOs entering the market, driven by the precedent set by MTN's listing in the IT sector. He noted that the evaluation of MTN Nigeria's value relative to other MTN entities in Africa could influence investor decisions and pave the way for more telcos, tech firms, and fintechs to go public in the Nigerian market, adding depth and diversity to the investment landscape.