Malawi Stock Exchange extends bullish run

Post was last updated: September 6, 2017

The Malawi Stock Exchange (MSE) continues to be buoyant registering a positive return on investment of 18.80 percent in the month of August.

The market made a total turnover of K1.5 billion in 148 trades with close to 43.5 million shares changing hands.

The average daily turnover for the month was K75.6 million.

Price gains registered by FMB, Illovo, Mpico, National Bank of Malawi, Nico, NITL, TNM and Old Mutual Limited were enough to offset share price losses registered by NBS and Standard Bank, resulting into an upward movement of the Malawi All Share Index.

Market capitalisation also increased in both kwacha and United States dollar terms.

The bullish sentiments also prevailed on the stock market in July 2017 when it registered a positive return on investment.

Total traded volume and value rose remarkably with the former registering 230,820,088 shares at a market value of K1.7 billion, representing a 65.09 percent increase in value and an 839.72 percent increase in volume.

According to Alliance Capital Limited July Market Performance report, the trends can be attributed to the fact that most companies were trading with trading statements showing an increase in their profits.

The firm said the development increased the demand for the stocks thus increasing trade activity on the bourse.

This is coming at a time when the MSE is optimistic to break its listing drought, having registered no new listing since 2008. In that time, the market was also dealt another blow when two companies,

Packaging Industries Limited and Britam, delisted from the bourse.

Speaking recent l y, MSE Chief Executive Officer, John Kamanga, said the improvement seen in most macroeconomic fundamentals raises hope for new entrants on the share market.

Most companies are reluctant to list on the Malawi Stock Exchange following what they call rigid requirements put on investors.

According to the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), most family owned enterprises shun the local bourse as they lack capital to expand quickly to meet some of the requirements put on listed companies.

Speaking in an earlier interview, MCCCI Chief Executive Officer, Chancellor Kaferapanjira, said the majority of businesses of Malawian origin are family owned and as such they do not want to dilute their shareholding and lose their influence or power by listing on the stock exchange.

“Li s ting requires a lot of transparency, including transparency of financial dealings, a thing some of the companies prefer to keep to themselves,” he said.

Another economic analyst, Armstrong Kamphoni said the market responds favourably if big companies listed on the market post good results.

He, however, said there is need to introduce more trading items on stock market to push up traded volumes and value.

“Only 10 percent of are available for trading with the bulk of share held for long-term investment by holding companies and pension funds leading to increased inactivity on the market,” he said.

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