Performance review of MTN share price

Some basic information about MTN

MTN is Africa’s largest mobile network operator. They provide voice, data, fintech, enterprise, wholesale and API services to more than 270 million customers in 19 markets.  We look to break down and review MTN share price from a fundamental and technical perspective.

The head office is based in Johannesburg. They operate in many African and Asian countries.

In 2021, MTN’s revenue was 181,646 million ZAR with a net income of 13,750 million ZAR.  

The rise and fall of MTN shares

MTN share price traded to a peak of 21149 on the 3^rd of March 2022. This was 5 days before an earnings report showing a mild beat in revenue (reported 9.497 trillion, estimated 9.253 trillion).

Figure 1 MTN share price peak

Why did MTN shares price decline in March?

A look from the fundamental view. The company blamed the decline in the share price on the cost to renew its operating licence for MTN Rwanda.

The decline was further accelerated in early April 2022 when the Nigerian communication watchdog (NCC) placed a ‘receive only call’ status on some mobile users until SIMs were properly linked to their National Identity Numbers.

A look from a technical perspective  

Is this a broad-based decline in the telecom sector?

EXV2 is the Stoxx Europe 600 Telecommunications ETF. The fund offers exposure to telecom companies in Europe. How did MTN fare against EXV2?

The answer is ‘not very well’. Since the last earnings reports on the 11^th of August 2022, MTN share price has declined another -20% while the telecom fund has seen a decline of -4.5%.

Figure 2 decline compared to EXV2

A technical support level to watch

MTN Monthly Chart

A look from the technical view. The monthly chart and 10986 acted as support in 2016 and twice in 2017. Often, technical areas that attracted buyers in the past, will do so in the future.

Figure 3 MTN previous support

Looking at the technical study of symmetrical patterns, 10986 could form the start of the BC leg of a cypher pattern known as a Bat formation. This pattern would suggest a correction to the upside once the AB leg completes.

Figure 4 MTN Bat formation