Banks share prices drop - Nation Online

Market Volatility Hits Malawi’s Banking Sector: What It Means for Business and Investment

Post was last updated: November 27, 2025

Key Business Points

  • Market correction: Share prices of five Malawi Stock Exchange (MSE)-listed commercial banks have declined, with analysts attributing the drop to a "market pullback" as investors cash in on high-valued stocks.
  • Profit-taking: Investors are realizing profits from significant capital gains recorded in recent months, contributing to share price declines across banks and other sectors.
  • Correction and realignment: The market is correcting itself, with overpriced stocks realigning to more realistic valuations, presenting opportunities for investors to reassess and potentially rebalance their portfolios.

The Malawi Stock Exchange (MSE) has experienced a decline in share prices of five commercial banks, including Standard Bank plc, NBS Bank plc, FDH Bank plc, FMB Capital Holdings, and National Bank of Malawi (NBM) plc. This decline has been attributed to a "market pullback" by analysts, as investors cash in on high-valued stocks. The share price of Standard Bank plc, for example, declined by 44 percent from K6 468 to K4 489 between October 1 and November 24.

According to Armstrong Kamphoni, chief executive officer of Cedar Capital Limited, the market was "overbought" based on surging share prices and price-to-earnings (P/E) ratios in the third quarter. The P/E ratio for the MSE averaged K42.57 for K1 of earnings on the bourse, significantly higher than historical averages. Kamphoni noted that the market’s weighted average P/Es were K13.75, K21.92, K18.89, and K40.45 for 2022, 2023, 2024, and 2025, respectively, indicating that the current ratio is "significantly out of the historical range."

Stock market investor Benedicto Bena Nkhoma said the drop in shares is not surprising, as the market is correcting itself in terms of prices. He noted that this could signal a correction on the counters that had gone very high when considering the historic price-to-earnings ratio. However, Nkhoma is optimistic that when companies start releasing trading statements in the next few days, there will be a change in the trajectory of the promising stocks.

Kondwani Makwakwa, equity investment analyst at Stockbrokers Malawi Limited, attributed the share price declines to profit-taking by investors, who chose to realize profits after significant capital gains in recent months. He noted that the selling pressure contributed to the share price declines across banks and other sectors from October. Makwakwa said the movement may reflect a combination of profit-taking, tighter market liquidity, and cautious investor sentiment regarding the current valuations of these counters.

Financial expert and stock market investor Brian Kampanje said the significant fall of Standard Bank plc shares was prompted by an oversupply of shares, as a significant number of minority shareholders wanted to cash in after the share split in July. He noted that the shareholders were willing to accept lower offers, which will enable the purchasers to experience massive gains in the future.

As the market continues to correct itself, investors should consider reassessing their portfolios and looking for opportunities to rebalance. The decline in share prices may present a chance to buy undervalued stocks, and investors should keep a close eye on the market as companies release their trading statements. With the MSE’s strong potential, investors can look forward to mwayi wa mphelo, or a "harvest of profits," in the future.

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Vanessa Banda
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