Widening profit margins have bolstered confidence – The Times Group

Fueling Growth: Revitalizing Malawi’s Economy Through Strategic Opportunities

Post was last updated: January 9, 2026

Key Business Points

  • The Malawi Stock Exchange (MSE) recorded exceptional performance in 2025, with the index rising above 260 percent, driven by strong capital formation, rising liquidity, and sustained investor confidence.
  • The market’s performance was largely driven by the strong performance of listed companies, supported by solid balance sheets, resilient business models, and widening profit margins that have bolstered investor confidence.
  • The introduction of capital gains tax on all share disposals has had a transitional impact on trading activity, with the Exchange engaging with government to implement measures that balance market attractiveness with fair taxation, and a key focus on expanding participation among low-income Malawians and youth.

The Malawi Stock Exchange (MSE) has once again emerged as Africa’s top performer, with its index rising above 260 percent in 2025. According to MSE Chief Executive Officer John Kamanga, the market’s exceptional performance was driven by strong capital formation, rising liquidity, and sustained investor confidence. The Exchange successfully facilitated TNM’s capital raising of K30 billion through an issue for cash, strengthening corporate capitalization and supporting the share split and subsequent listing of Standard Bank of Malawi, which enhanced liquidity and price discovery.

The market’s performance was largely driven by the strong performance of listed companies, supported by solid balance sheets, resilient business models, and widening profit margins that have bolstered investor confidence. FMB Capital Holdings emerged as the largest listed company, valued at K8.02 trillion or $4.58 billion, reflecting robust earnings performance and investor confidence. The retail investor base grew to over 72,000 by November 2025, while annual trade turnover increased sharply by 183.9 percent, from K116.1 billion or $67.1 million to K329.5 billion or $190 million, reflecting improved market depth and engagement.

The introduction of capital gains tax on all share disposals has had a transitional impact on trading activity, with the Exchange engaging with government to implement measures that balance market attractiveness with fair taxation. A key focus remains expanding participation among low-income Malawians and youth, with the Exchange positioning the capital market as a sustainable, productive, and rewarding avenue for long-term financial inclusion and wealth creation. As the market continues to grow, it is essential for investors to understand the factors driving this growth and the opportunities available, such as zinthu zikukwana (growing opportunities) in the market.

Concerns have been raised that overvalued shares, combined with the capital gains tax, could trigger a market correction. However, the MSE remains a relatively efficient allocator of resources, with valuations grounded in earnings expectations, growth prospects, and macroeconomic conditions. Much of the discussion has focused on price-to-earnings (P/E) ratios, which reflect how the market prices a company relative to its earnings. Strong historical and projected earnings often justify higher P/E ratios, as investors pay today for anticipated future returns, highlighting the importance of kusimba kwa mwayi (investing for the future).

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Vanessa Banda
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