Ten companies listed on the Malawi Stock Exchange (MSE) registered share price drops in the week ending November 10 2023, a weekly market update published by Nico Asset Managers has shown.
The development affected performance of the market in the week, reflected by a 0.24 percent drop in the Malawi All Share Index (Masi) to close the week at 113 643.46 points compared to 113 920.30 points in the previous week.
The Domestic Share Index (DSI) closed at 89 366.61 points representing a 0.27 drop when compared to last week’s 89612.56 points.
“The decrease in Masi and DSI was due to share price losses in Airtel, FDH Bank, Illovo, NBS Bank, Nico and TNM despite the share price gains in NBM, NITL and Standard Bank. A total volume of 8.84 million shares were traded during the week at a value of K1.06 billion in 160 deals,” the update reads.
Market analyst Kondwani Makwakwa said the trend was normal considering that in a stock market, investors always aim to buy shares when the prices are low and sell them when the prices go up.
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“Going forward with the recent devaluation, the stock market looks to be one of the best investment options because the return on the stock market is still better compared to other investment options.
“Furthermore, some companies are likely to be more profitable in this environment which should cause demand for stocks. Another point to consider that might cause demand is the Malawian in diaspora and other foreign investors now when investing on the stock market they will be able to buy more as their buying power has gone up,” Makwakwa said.
In a separate interview, General Secretary of the Minority Shareholders Association of Listed Companies Frank Harawa said the movements are not that significant but people must consider performance of such counters in the whole year.
“…for example, FDH was at K14 per share and now is trading at over K60, NBS was at K22 per share in January and now is trading at K108 so any drop does not affect the shareholder. This is the time to buy because prices have dropped.
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“If we also look at the company’s six months result, they are all good and some of them are already paying dividends and very soon we will have final results for the year so we hope this is just panic selling especially from retailers who do not understand the market so trend does not affect the market significantly,” Harawa said.
MSE Chief Operating Officer Kelline Kondowe said, during the month, the market observed that there was more supply compared to demand on the market, which led to a drop in prices of some counters.
“This fits well into the concept of market correction where following a rally in prices we normally see the market establishing a new pricing level which sometimes results in some counters registering price declines. Nonetheless we are hopeful that the market will close on a positive note this year,” Kondowe said.
