Fakoyejo OlalekanAirtel Africa investors have lost -19 per cent of their investment in just two days amid meltdown experienced in the Nigerian stock exchange.
The Nigerian stock exchange depreciated by -4.85 per cent, with the bourse’s stock value falling from 47,569.04 ASI to 45,366.32 between Monday and Tuesday, reflecting faster depreciation of Airtel shares.
Join our WhatsApp ChannelPrime Business Africa (PBA) reports that, as a growth stock, Airtel Africa is being shunned in the capital market by investors following Monday’s report of Nigeria’s inflation rate hitting 20.77 per cent in September, from August’s 20.52 per cent rate.
The hike in inflation is expected to drop consumer spending in the fourth quarter, and this often affects growth stocks. This also comes at a time telecommunications companies increased internet data prices by at least 10 per cent.
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Airtel Africa shares had been on a downward path prior to the week, falling -10 per cent the week before. However, on the back of reports on accelerating inflation at the beginning of the week, the stock depreciated faster by -19 per cent. This led to the share dropping in value, from N1800 with which it started this week, to N1458 on Tuesday evening, resulting to loss of N1.28 trillion by the company’s shareholders in just two days.
The loss indicates that investors are snubbing Airtel stock on the market floor, considering drop in consumer spending on the firm’s call and data services have a tendency of affecting their expected returns on investment (RoI).
Prime Business Africa gathered that the loss has reduced Airtel Africa’s market valuation from N6.76 trillion to N5.47 trillion within two days.
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