Fitch’s BMI Research says MTN might seek to delay its initial public offering (IPO) in Nigeria as political risks escalate in the West African nation ahead of general elections.

"Mounting Nigerian political risks make for less than ideal market conditions for MTN’s planned listing, likely delaying the operator’s IPO application filing," the company said.

The mobile operator is required to list its business in Nigeria as part of its settlement with the government over its failure to disconnect unregistered SIM cards. But despite unfavourable market conditions, BMI said MTN "may yet be pressured by the government to comply with mandatory listing requirements ahead of general elections in [February] 2019".

The government might want to "show some semblance of stability in a push to revitalise the country’s capital markets", BMI said.

MTN CEO Rob Shuter said last week it planned to conclude the IPO in 2018, if market conditions were "favourable".

Though it was a complicated process, "for us it’s full steam ahead", Shuter said.

But BMI said growing political risks had likely made MTN more "apprehensive" because of the probable decline in market liquidity until the election process was concluded. Investor uncertainty would "hamper the success of its listing".

Heightened political risk was already reflected by protracted bearish investor sentiment on the Nigerian Stock Exchange. "The sustained weakened performance of the country’s capital markets, coupled with the Nigerian Securities and Exchange Commission’s July 2018 announcement that it has yet to receive MTN’s IPO application filings, has fuelled speculation that the operator may not list on the local bourse in 2018."

If MTN does not list in 2018 it will join a number of companies that have abandoned their 2018 listing ambitions. IHS Towers, an MTN associate, halted its planned listing in New York in June, and Helios Towers Africa and Eaton Towers did the same. (BusinessDay SA)