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MTN and earnings from Nigeria...

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Super Contributor
A few weeks ago, MTN dropped 11% when the market woke up to the fact that Nigerian currency (NGN) was in free fall devaluation. At that stage it was trading 127 NGN to 1 USD. As at 26.12.008 the currency has weakened further to 137 NGN to 1 USD. MTN's earnings from Nigeria is approx 25%. This has to impact earnings from Nigeria...
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Frequent Contributor
Then why is the price still steadily climbing
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Super Contributor
The market has a short memory. It is climbing on extremely thin volume. Will be interesting to see whether it manages to go beyond (and stay beyond) the R106.80 resistence.
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Not applicable
Its built up some good momentum on very low volume. Broke strong resistance today, watch and see if this one can stay above the 105 mark..
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Not applicable
then it may test the resistance of the previous bull trend support again, imo. Otherwise if that doesn't break another reversal.
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Super Contributor
Compare ZAR and NGN - MTN reports in rands. The rand has also fallen over against the dollar during the same time period.
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Super Contributor
Can email graphs if anybody wants.
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Frequent Contributor
Any reason for the sudden drop/recovery in the share price a few minutes ago?
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Contributor
Any opinions on the rissistance levels ?
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Not applicable
According to Std Bank analysis about a week ago: First level to breach: R106.95 (bullish signal) Second: R112.80 Then above R125.50 will indicate strong reversal and will most probably push prices to R136.80.
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Frequent Contributor
Do you know if the Naira to the dollar has now stabilised.
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Super Contributor
Still 139 NGN to 1USD (www.exchange-rates.org). To the ZAR it is 14 NGN to 1 ZAR (whilst as at 31 December 2007 reporting period it was 18 NGN to 1 ZAR - so it has actually strengthened to ZAR).
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Frequent Contributor
MTN failed at resistance lwevels of 112 - possible downside to support levels of mid 90's
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A question regarding fundamentals. I remember reading that MTN's tax haven status in Nigeria has expired and effective immediately, it is subject to taxation. does anyone have any info on this?
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Super Contributor
Quite correct, Tjops (tax holiday expired 1 april 2007). Earnings from Nigeria will now be taxed at +- 35% for 2008. For details peruse page 36 of 31 dec 2007 annual report from www.mtn.com
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Frequent Contributor
Surely this would have been factored into the current share price.
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Super Contributor
It seems that small countries/exotic currencies seldom convert directly (to avoid arbitrage), but rather first convert to USD and then from USD - in this case - to ZAR.
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Super Contributor
Have a suspicion MTN wont penetrate the 11280 level. Back to R89 from there. Any opinions will be appreciated.
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Frequent Contributor
Is price manipulation possible where prices seem to be on a downward trend but there are always buyers at higher prices?
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In my opinion this share is radically overvalued. No one knows how cell phone spend will react to this kind of market. There is no history + New taxes. And, they report in US dollars, they do not earn US dollars. Also they still priced as a growth share, but this is limited.
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