MTN Group Ltd (ADR)(OTCMKTS:MTNOY) was a notable mover during Tuesday’ s trading session. The stock surged by close to 3.5% on the back of 2 times the average daily volumes. It is important to state that the stock has been trending lower forming lower tops and lower bottoms indicative of the fact the strong bearish momentum. The stock currently trades below important daily moving averages. The price action seen during yesterdays’ trading session meant that momentum oscillators are now pointing towards a reversal, which is a bullish sign. Traders believe the stock could head to levels of $11.15 in the near term.
MTN Group Ltd (ADR)(OTCMKTS:MTNOY) announced that its Chief Executive Officer, Sifiso Dabengway, had resigned from his post after the company was slapped a whopping $5.2 billion fine by Nigeria. As per the reports, until the appointment of the new CEO, former President Phuthuma Nhleko will serve as the interim authority in the official deal with Nigeria’s Communication Commission.
Insights of Matter
Although things seem to have returned to normal, the management of MTN Group has advised the shareholders to trade cautiously until the further notice. The announcement has been made to ensure that MTN Group doesn’t have to face any issue on the back of recently imposed fine.
Reports claim that Nigerian government decided to impose a penalty on MTN Group after it failed to deactivate 5.2 million unregistered SIM cards before the given deadline. The Nigerian government considers such actions as a probable security threat and takes any action possible to stop similar practices.
As soon as the penalty was announced, company’s shares suffered badly, leaving no other option in front of MTN Group but to announce that it was negotiating the fine imposed by the government. Stocks rose 1.6% post this announcement. The senior management of MTN Group hopes that things will return to normal very soon.
MTN Group & Neotel Purchase Issue of Vodacom
Meanwhile, MTN Group has decided to register its protest regarding Vodacom’s decision to acquire internet service provider company Neotel. According to reports, MTN Group has announced that it would give a dominant broadband position to Vodacom lest it doesn’t execute this acquisition.
Experts think that MTN Group fears that if this acquisition transaction is executed successfully, Vodacom will create a nation-wide LTE network that others can’t. It will give an extra advantage to Vodacom, which can harm others’ performances significantly. Vodacom is yet to speak on this issue and clarify its stand.