Airtel Africa Suffers More Losses on the LSE Despite Recent Listing Among 101-350th Largest Companies

Telecom company Airtel Africa suffered extended losses to their shares in the seventh trading session on the London Stock Exchange (LSE) despite their addition to the index of mid-capitalised companies (FTSE 250).

The shares of Airtel Africa declined by about 3% to 55.80 pence on the LSE on Wednesday, September 11.

Airtel’s fall in shares shows the company’s gross underperformance on the London equity gauge, as a 30% plunge has been registered since it got listed on the LSE.

The FTSE quarterly review which is conducted every March, June, September and December shows promotions and demotion to the index to ensure the indexes reflect the true state of the London equity market.

The FTSE 250 index represents a capitalisation-weighted index consisting of the 101st to 350th largest companies on LSE. And effective Monday, September 23, Airtel Africa will be listed in the FTSE 250 index.

However, Airtel Africa’s imminent inclusion in the FTSE 250 index did not protect the company against Wednesday’s fall.

Airtel Africa has had a hard time since it debuted on the LSE. An initial public offer (IPO) raised £595 million which saw interests from global investors, but its shares plunged 15% on its debut trading in London.

According to Business Day, analysts attributed Airtel Africa’s poor debut on LSE to the unfavourable market conditions in the UK.

Airtel’s subsidiary in Nigerian, Airtel Nigeria, gained the maximum allowable 10% on debut trading session in Lagos but declined by the same 10% the next trading day. Currently, its share remains flat at N323.50/share.

However, with a 26.81% market share, Airtel Nigeria has risen over Globacom (26.7%) to become Nigeria’s second-biggest mobile operator according to the latest figures by the Nigerian Communication Commission (NCC).

Airtel’s listing on the Nigerian Stock Exchange (NSE) added over N1 trillion to the market value, making it the third-most capitalized stock on the LSE behind MTN Nigeria and Dangote Cement.

Also, Airtel’s earning report for the quarter that ended on June 30, 2019, showed a sales increase of 22% in Nigeria and revenue growth of 10.2% to $795.9 million from $744.5 million in a year.

Airtel Africa is the second-largest mobile operator in Africa with presence in Nigeria and 13 other countries, which contributes over 35% to the company’s revenue. The double-digit constant currency growth of the company could help offset the impact of the free fall on the LSE.