South Africa: MTN shares hit 2-week low on Nigeria dispute fears
London,October 6, 2018,(AltAfrica) – Shares in South Africa’s MTN fell to two-week lows on Friday on investor fears a dispute with the Nigerian central bank over $8.1 billion in repatriated profits could escalate.
In August, Nigeria’s central bank ordered MTN and its banks to bring back into the country $8.1 billion that MTN allegedly sent abroad in breach of foreign exchange regulations.
MTN’s share price fell nearly a third in Johannesburg in the days after the announcement, hitting on Sept. 17 its lowest level since 2006
Bloomberg, citing court documents, reported late on Thursday that the Nigerian central bank has asked the high court in Lagos to approve charges of 15 percent annualized interest until the courts make a judgment on the repatriated profits, and 10 percent thereafter until the whole amount is repaid.
MTN did not immediately comment. Nigeria’s central bank did not answer calls or text messages for comment
MTN shares fell as much as 8.5 percent to 79.85 rand, their lowest level since Sept. 21, making them the worst performer in the Johannesburg stock exchange’s top 40 index.
“The market is seeing that (the Nigerian central bank move) as going back to that aggressive stance they had right at the beginning,” said Greg Davies, equities trader at Cratos Capital.
Nigeria’s central bank fined Standard Chartered Plc 2.4 billion naira ($7.86 million), Stanbic IBTC Bank Plc 1.8 billion naira, Citibank 1.2 billion naira and Diamond Bank Plc 250 million naira.
The banks have said they are in talks with the regulator.
Nigeria, which accounts for a third of MTN’s annual core profit, has proved to be problematic for the company in recent years due to multiple allegations of infractions.