MTN Nigeria is now more valuable than all Nigerian banks and insurance companies combined


Nigerian telecommunications giant MTN Nigeria is now worth N5 trillion naira, making it more valuable than all banks, insurance companies and all financial services companies listed on the Nigerian stock exchange combined.

This is in line with market valuation data as of May 20, 2022, tracked and compiled by Nairametrics of the Nigerian Stock Exchange.

On Friday, MTN Nigeria closed with a total market capitalization of N5.068 billion, making it the third most capitalized stock on the Nigerian stock exchange. MTN Nigeria now joins Airtel and Dangote Cement, all SWOOT members to be worth more than the financial services sector.

MTN was briefly the most capitalized stock two weeks ago when the share price traded at 264 naira per share, valuing it at 5.3 trillion naira. However, Airtel and Dangote Cement prices have since risen while MTN has lost some of its gains.

MTN Nigeria belongs to a category of companies called SWOOT by Nairametrics, which means shares worth more than one trillion naira. Other members of the group include Airtel Africa (5.5 trillion naira), Dangote Cement (5.1 trillion naira), BUA Cement (2.5 trillion naira), Nestlé (1.1 trillion naira) and BUA Food (1 trillion naira).

MTN is now more valuable than all financial services companies

Shares of MTN have risen year-to-date from around 197 naira to 270 naira last week.

  • The surge in shares, which is also largely driven by MTN’s stunning results for fiscal 2021 and Q1 2022 results, topped N5 trillion during the week, joining Airtel and Dangote Cement as the only three shares worth more than 5 trillion naira in Nigeria.
  • The entire Nigerian financial services sector, which includes banks, insurance companies and other financial institutions, is valued at N4 trillion.
  • With a gap of more than 1 trillion naira between the valuation of MTN and that of financial services companies, the telecom giant is now firmly more valued than all and will have to suffer a 20% drop in share price to fall. below.
  • MTN’s share price has increased by 51.38% over the past year.

While Airtel, valued at over 5.5 trillion naira, is also more valuable than any financial services company, MTN is more important as the company’s finances represent revenues generated solely from Nigeria, except for exclusion of other African countries.

Airtel’s revenues include those of other Sub-Saharan African countries although Nigeria’s revenues dominate with around 40% of revenues.

Why are telecom operators more valuable?

A combination of factors explains why MTN and even Airtel are more valuable than the Nigerian financial services sector, including banks.

  • While banks reported impressive profits, telecom operators went further not just reporting profits, but delivering double-digit growth projections for other areas of their market, especially data.
  • With over 199 million active mobile subscribers, telecom operators have a customer base and demand that will continue to grow revenues and profits for years to come.
  • In addition to data, telecom operators also have the capacity and funding to move into other sectors of the economy, starting with banking. The recent MOMO license obtained by MTN opens up a new source of revenue for the organization.
  • In addition, because of their growth prospects, telcos also have better control over their margins and returns. Unlike the financial services industry, telcos offer a return of over 100% on average equity of around 20%. MTN reported a return on average equity of 134% in 2021.
  • Apart from the fundamentals, Nigerian banks also have billions of shares that trade with much higher liquidity compared to telecom operators.
  • This is due to the high proportion of sole proprietors of bank shares compared to telecom operators. For example, Zenith has approximately 643,965 shareholders compared to 10,931 for MTN at the end of 2021. Moreover, while 2 shareholders own 15% of Zenith Bank, one shareholder owns 76% of MTN.

The changing size of the Nigerian economy

We are also not surprised that MTN has now eclipsed the entire financial services sector in terms of market valuation.

  • According to Nigeria’s GDP data, the telecommunications sector had a nominal GDP of N14.1 trillion in December 2021, compared to N5.3 trillion for the entire financial services sector.
  • 10 years ago (2021), the telecom sector had a nominal GDP of 5.3 trillion naira while banks had a nominal GDP of 1.49 trillion naira.
  • This was not the case before the advent of Telcos.
  • Telecommunications operators also now represent 12.6% of the country’s GDP.


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