ISSUES: MTN and EFCC – leave it to market forces
By: Edgar Joseph
Just read that the EFCC have gone to raid the MTN offices as a result of complaints from brokers that they have not seen the stock to buy. They have attributed it to a possible manipulation during the listing.
These are the kinds of things that just makes someone feel like running into the Lagoon.
SEC remains the regulator, there has been no official complaints, no investigations by the SEC or the NSE who owns the Exchange and EFCC don run to MTN.
Is it MTN that did the listing. They had advisers inv bankers, brokers, lawyers etc and also on the side of the stock Exchange. If there is to be any meaningful investigation it should start from there if at all.
The exchange is a market driven by demand and supply. So, if there is no offer there would be no sale. It’s a deliberate struggle to get the equilibrium price at which a sale would be made.
Now if MTN did not meet the legal floating shares as prescribed by listing rules, then we have to see if there were any waivers sought for and given but certainly not attracting a ‘raid’. Because there are appropriate sanctions in the system.
A seller reserves the right to fix his tip off price and wait to sell just as the buyer can also take a buy decision based on his own parameters. There can be no forced sale or forced buy.
The allegation that they want to drive the price before the IPO also falls flat. Pricing that is not supported by intrinsic value will not stand no matter the manipulation. Price will always find its level as a result of the continuous interplay of demand and supply. Many IPOs have failed due to no value. So, I think EFCC should relax and wait for market to react cos that is the real reaction.
If the EFCC are so desirous of getting to the ‘bottom’ they should first familiarise with market rules and trends before jumping in.
Me I wonder why small thing dem go slam MTN. Maybe they should stop using fine yellow women for them adverts may be na wetin dey cause all the wahala.
Edgar Joseph is an Ex stockbroker