MTN is the King, Overtakes Dangote Group in Nigerian Stock Exchange [Updated]

MTN is the King, Overtakes Dangote Group in Nigerian Stock Exchange [Updated]

MTN Nigeria became the most valuable company in the Nigerian Stock Exchange on Monday. Dangote Group made way few days ago for the telecom giant. I expect Airtel Africa which quickly cracked the top four, upon listing, to settle as #2 in coming months. [Currently, Dangote has recovered its position as #1].

It may be a new kid on the block, but MTN Group Ltd.’s Nigerian unit has become the most valuable company on the Lagos stock exchange. Three months after listing, MTN Nigeria Communications Plc had a market capitalization of 2.82 trillion naira ($7.82 billion) as of Monday’s close. The mobile phone company has overtaken Dangote Cement Plc, owned by Africa’s richest man, Aliko Dangote.

For MTN Nigeria, I see an era of dominance. Our largest bank, GTBank, by market cap with value market of N795 billion (about $2.2 billion using black market exchange rate), will experience more pressure as MTN Nigeria turns into a quasi financial institution. GTBank few months ago had a market cap of N1.3 trillion but has been bleeding value due to enormous pressure that MTN will take over the financial services sector. 

This is a big deal in Nigeria’s financial sector – MTN Nigeria receives Central Bank of Nigeria’s “full super agent” licence, Reuters reports: “Through the network established by YDFS, MTN is in a position to broaden the availability of financial services for the under-served across the country. This marks a very important first step in leveraging our infrastructure to scale our Fintech initiatives,” said MTN Nigeria CEO. Besides, MTN Nigeria has applied for Payment Service Bank Licence as it works to close the loop.

Yes, MTN will become Nigeria’s largest financial institution with excess of 65 million customers while Access Bank, the largest bank by asset, cannot command close to unique 15 million customers. More so, First Bank is still well below 20 million customers. So, MTN has no major competitor in this space.

When you model all these elements, you can see why MTN Nigeria is now the king of Nigeria’s broad street! For the banks, you are the small boys now – MTN has a bigger “car” with 65 million passengers; none of you is close to 20 million. I predict erosion in bank profits starting Q1 2020 as MTN reshapes our financial sector.

Update: Dangote Group has regained the position as at today. MTN N has a market cap of N2.809T  while Dangote Group has a little more.

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4 thoughts on “MTN is the King, Overtakes Dangote Group in Nigerian Stock Exchange [Updated]

  1. “More so, First Bank is still well below 20 million customers.” You mean First Bank is not nearing 28 million customers yet? Some time in 2017 we almost exchanged blows here, while arguing the plausibility of the promise from the Bank’s chief to grow its customer base to that size by 2021 I guess. We are already more than halfway through that period, and we are yet to be proven wrong…

    I think MTN Nigeria has the clearest route to growth and profitability, investors are not stupid; so expect more players congregating and converging there. The tussle between MTN and Dangote may continue, but the former is likely to win.

    As for GTbank, I have always had special affection for it, so I always want it to remain up there. I will suggest it goes for name change in the Stock Market: rather than answering GTbank – it can go for GT Group (just like Google’s Alphabet), to free itself from the ‘bank’ toga; and subsequently it can diversify and acquire tech firms with high growth potentials.

    I like what is happening, serial entrepreneurs should be ready to create more companies, and let these behemoths fight to acquire them at sumptuous valuations.

    This is the greatest time to be alive, the rollercoaster ride promises to exhilarating!

    Reply
    1. “You mean First Bank is not nearing 28 million customers yet? Some time in 2017 we almost exchanged blows here, while arguing the plausibility of the promise from the Bank’s chief to grow its customer base to that size by 2021 I guess. ” Hahaha, we will come there next year

      Reply
  2. ” I predict erosion in bank profits starting Q1 2020 as MTN reshapes our financial sector.”

    Your prediction is audible to the deaf and visible to the blind. Global economy is tech driven and MTN understood this ab initio, hence the strategy of covering Nigeria within a minimum time frame.

    Sad as it sounds, I was in a street gathering where the BOP class engaged in making fun of one of the new age bank’s policy of ‘zero balance account opening “. I tried to join the nodes after reading your write-up and can now understand that MTN has started beating the drums and dictating the dance steps in Financial services sector.

    A positive development I can say cos the class of Nigerians who were making mockery of that “Zero balance policy” funnily remembered with nostalgia, when same bank was marked as an elitic bank for high networth customers. Competition is, and still remains the best game changer. Glo vs MTN readily come to mind. We are watching.

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