The listing on the JSE of MTN Zakhele Futhi, the black economic empowerment scheme of MTN Group, disappoints investors.
The shares of MTN Zakhele Futhi debuted on Monday on the JSE.
Yesterday, the stock opened at R6 and peaked at R9,20 to close at R4,80.
By 1153, the stock was trading at R5.50 a share.
Investors of MTN Zakhele Futhi are disappointed as this implies the stock has lost close to 90% of its value.
The shares are trading way below its net asset value which was more than R22 in September 2018.
Black investor spent R20 each, with a minimum buy-in investment of R2000 to be shareholders of MTN Zakhele Futhi.
Some investors are not happy at all.
“We bought these shares 3 years ago as an investment for R20, yesterday they were listed on the JSE for as little as R0.82, so people who bought them yesterday actually made more profit than those who did 3 years ago, we basically got ripped off about 95% of our money,” an irate reader told TechFinancials.
“Some people are not even knowledgeable about shares, yesterday they sold their shares because they were promised of a good profit, and they lost their money, because some bought 100 shares for R2000 which was the minimum price, and yesterday when they sold they got R500 and lost R1500.
“So, tell me how is this helping the people? Besides ripping them off?”
Sindisiwe Mabaso-Koyana, the chairperson of MTN Zakhele Futhi, has called for patience amongst investors.
“It is early days, today was the first day. It (the shares) started very slow. We do believe that as the day goes the market may take it to where the net asset value is,” she told Business Day TV.
But she warned that the market is about a willing buyer and willing seller mentality.
Mabaso-Koyana also added that some of MTN Zakhele Futhi shareholders might have sold their shares to cash in money for the festive season and ended up accepting a lower price for their shares.
“But we do believe with the trade that is trickling in it will actually stabilize at a reasonable point.”
Mabaso-Koyana also reminded disappointed investors to use the previous MTN Zakhele scheme as a yardstick for performance.
MTN’s previous scheme, MTN Zakhele, listed on the JSE in 2015, but delisted in the next year as the scheme was wound up. Investors who bought at R20 a share sold them at R60.
The newly listed MTN’s Zakhele-Futhi will be listed for a minimum period of five years, until 25 November 2024.
MTN’s Zakhele-Futh is a ring-fenced special purpose vehicle aimed at facilitating investment by previously disadvantaged South Africans in MTN Group (MTN).
It holds about 77 million shares in MTN, amounting to 4% of MTN’s issued share capital.
It also has about 89 000 shareholders holding 123.4 million MTN’s Zakhele-Futhi ordinary shares.
The listing of MTN’s Zakhele-Futhi will facilitate and enable trading in the shares amongst qualifying black participants.
The MTN’s Zakhele-Futhi shares are tracking the performance of MTN Group.