Alliance Capital Limited has hinted at cautionary optimism on the prospects of the Malawi Stock Exchange in 2016 after the market registered a negative return on index to close the month of January at 14440.20 points as compared to 14562.53 percentage points recorded in December 2015.
In its Monthly Economic Review released last week, the advisory firm reported that the market experienced a tough start to the year and that the local bourse registered a decrease in both traded volume and value in the period under review.
“The overall stock market registered a monthly negative return on index of -0.84 percentage points in January, as there were flops in share prices for Mpico and TNM. Nevertheless, the market had a triumph in share price for Blantyre Hotels Limited. The foreign stock was constant for the month,” said Alliance Capital in the statement.
Meanwhile, just last week, the Malawi All Share Index went down by 54.69 points to 14360.00 points due to a corresponding decrease in the Domestic Share Index by 43.50 points from 11345.27 points to 11301.77 points arising from a share price loss in FMB by K1.00 from K14.00 to MK13.00
In an earlier interview, Chief Executive Officer of Alliance Africa Malawi Armstrong Kamphoni observed that there is need to introduce more trading items on the Malawi Stock Exchange to create more activity and push up traded volumes.
He said only 10 percent shares are available for trading with the bulk of the shares held for long term investments by holding companies and pension funds leading to increased inactivity on the Malawi Stock over the past few years.
“Sometimes major movements in shares are one off and tend to affect the market. The market is moving on but affected by liquidity—to buy and sell shares instantly.”
“We have only 13 companies trading on MSE, the last companies to list were TNM and Real Insurance. If there was more float available, then we would have seen more activity,” he said.