MTN gains to end worst four days of losses in seven years

MTN Group Ltd., the mobile-phone operator fined $5.2 billion by Nigerian regulators, gained on Friday on speculation that a four-day losing streak which wiped almost 20 percent off the company’s market value was overdone.

The shares of Johannesburg-based MTN advanced 3 percent to 159.04 rand as of 12 p.m. in the city, rebounding from a three- year closing low. The company’s 14-day relative strength index fell to 29.4 on Thursday, below the 30 level that signals to some analysts that the stock is oversold for the first time since Aug. 27.

MTN’s shares tumbled 19 percent this week through Thursday, the biggest four days of losses since 2008. The company on Oct. 26 issued a statement a day after a news report in Nigeria’s Technology Times saying MTN is being fined for failing to disconnect customers with unregistered SIM cards. MTN is in talks with Nigerian authorities regarding the fine and also with officials at the Johannesburg Stock Exchange on the timing of the announcement over the regulatory action, the company said on Friday.

“The rules state in technical analysis that after any too quick, too steep price action, then you’ll most likely see a counter-trend,” Peet Serfontein, a technical analyst at Nedbank Capital, said by phone from Johannesburg. “The overall trend is still down; what you’re seeing now is pressure relief.”

– Bloomberg [Neo Khanyile]