NBM Fund’s Growth Paves Way for 2026 Business Opportunities in Malawi

Key Business Points

• Keep equity exposure below the 60 percent ceiling by shifting assets to government bonds and unlisted shares.
• Use the strong 2025 stock‑market gains to lock in profits and strengthen pension reserves for 2026.
• Build cash buffers and review contribution rates now to weather a bearish market.

NBM Pension Administration Limited (PAL), a subsidiary of the listed National Bank of Malawi, reported that its fund grew to K400.7 billion for the year ended 31 December 2025. The result came despite a tough operating environment that continues to affect the current year. At the annual general meeting on Thursday, Board of Trustees Chairperson Michael Kampani said the fund had expanded dramatically over five years, from K47.1 billion in 2021.

Kampani credited the 2025 performance to exceptional gains on the Malawi Stock Exchange (MSE), where the Malawi All Share Index (MASI) delivered a 247.63 percent return. The fund passed a 115 percent return to members, showing that pension assets are growing to support retirees. He warned, however, that the outlook for 2026 is mixed. The stock market has already shown weaker performance in first half of the year and is expected to stay bearish, which could drag down investment returns.

A new regulatory rule from the Reserve Bank of Malawi, the Financial Services (Investment Management of Life Insurers and Pension Funds) Directive of 2025, caps listed‑equity holdings at 60 percent of total assets. Because the fund’s equity share rose to 80 percent at the end of 2025, managers have begun selling shares to comply. As of June 2026, listed equities fell to 78 percent, government securities rose to 12 percent, and unlisted equities increased to 4 percent from 2 percent. The fund’s value slipped slightly to K395.1 billion.

Stakeholder Richard Chakhala, Director of Finance at Blantyre City Council, expressed concern but confidence in the fund’s strategy. He noted that the plans put in place should address the highlighted challenges.

The sharp rise in the Malawi All Share Index illustrates how quickly equity valuations can change in a thin market. Pension trustees across the country are now reviewing their asset‑allocation policies to avoid breaching the new ceiling. Many are increasing allocations to treasury bills and corporate bonds, which offer steadier yields and lower volatility.

For small and medium enterprises, the shift creates a chance to negotiate better terms on group pension schemes. Employers can ask fund administrators to place a larger share of contributions in government securities, protecting ndalama from sudden market drops. This also frees up cash flow for working‑capital needs.

Investors looking at the broader economy should note that the Reserve Bank of Malawi’s directive aligns with a push for stronger prudential standards. As Malawi works toward deeper capital markets, the current rebalancing may lay the groundwork for more diverse financing options, including green bonds and infrastructure funds that can support long‑term growth.

For local m’bizinesi owners and entrepreneurs, the message is clear: regulatory changes are reshaping portfolio mixes, and a softer equity market demands prudent chuma management. Businesses that align their retirement‑fund contributions with these shifts can protect employee benefits and preserve capital for future growth.

Business leaders can take practical steps now: review the pension fund’s latest fact sheet, request a scenario analysis for a 10‑percent market decline, and adjust contribution holidays if cash reserves fall below three months of operating expenses. Acting early preserves mphamvu for both employees and the enterprise.

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