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Britam delisting puts MSE under pressure

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The Malawi Stock Exchange (MSE) has admitted that the delisting of Britam, formerly Real Insurance Company, from the local bourse has created new pressure for the bourse to find ways of listing more companies.

Britam said in a statement on Wednesday that following court approval of a minority share buy-out scheme, the firm has been de-listed from the stock market effective Monday this week.

Britam has offered to buyout 87.5 million ordinary shares from its entire minority shareholders at K3.00 per share, paving way for its delisting from the stock market.

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This is part of a restructuring of the company in an attempt to recapitalise and meet the Reserve Bank of Malawi’s (RBM) newly set capital requirement of K750 million for general insurers, from K 50 million previously.

Britam becomes the second company ever to delist from the MSE after Nampak Limited did the same a few years ago.

Commenting on the development, MSE director of operations, Esnart Lweya, said Britam’s move would create demand for additional counters on the local bourse and that there is now an urgent needs for new companies to be listed on the market.

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“Essentially what this means for the stock market is that we will have one less counter, so instead of 14 we will now have 13 counters. In terms of trades; where we previously had trades on that counter, those trades will no longer be there and this means will create demand for additional counters,” she said.

She said the development puts the market operators at a tight corner and that they now have to work diligently and list additional counters to create supply in an attempt to meet growing demand.

Lweya said the stock exchange is working tirelessly in sensitising prospective companies on the need and requirement for listing.

“There are different factors that companies consider when they want to list and sometimes there is a misconception that listing requirements are stringent.”

“As a stock exchange we are implementing a long term strategy which includes increasing the number of the listings. We are looking at increasing awareness and meeting a number of companies to give them more information on the listing process,” she said.

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