Investors have steadily accumulated the telecommunications shares despite the rather bumpy month for the domestic equity market, which has been characterised by the spectacular collapse of African Bank Investments Limited's share price, before the company was suspended and put under curatorship.
The ratings downgrade of SA's main banks by Moody's last week, coupled with some disappointing earnings updates from big-name retailers, undermined sentiment.
Imara SP Reid analysts said in a note last week that overall MTN's performance looked decent, though it faces continued increases in competition and pricing.
"Part of MTN's attraction is its growth potential outside SA. Although the company appears to be managing reasonably well, we remain cautious on SA given a weak consumer environment, competition and cautious forecasts from management," Imara SP Reid said.
"We continue to see MTN as being attractively valued in light of Nigerian growth prospects, strong free-cash-flow growth and resilient margins. Scope for increased returns of cash going forward is also positive. Yield is a powerful driver and this could be supportive of the MTN share price."
Headline earnings per share in MTN - which now commands a market capitalisation of about R456bn, making it the seventh-most valuable share on the JSE - were up 9% to 729c in the six months to June this year.
"Investors have been particularly pleased with the healthy increase of 20.3% in the company's interim dividend. MTN also finds favour with foreign investors due to its high proportion of earnings outside of South Africa," said IG SA Market Analyst Shaun Murison.
"The growing African footprint sees the company well poised to benefit from highly-populous, low-penetration markets. Nigeria, for example, has become the group's cash cow, contributing to almost half of total earnings before interest, tax, depreciation and amortisation," said Murison.
MTN Nigeria, grew revenue 21.5% to R27bn while in its second-largest market, South Africa, revenue actually shrank 7% to R19bn. The cellphone network's overall revenue grew 10.7% to R72.76bn.
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