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Experts speak on Malawi Stock Exchange performance

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Financial market experts say the Malawi Stock Exchange (MSE) is still lagging behind on performance and competitiveness compared to regional counterparts amid efforts and initiatives deployed.

This comes against a background of the Africa Capital Markets Watch 2019 report which, among other things, shows that trends on the local bourse could not match those in other markets.

The report, however, predicts continued volatility and caution that will affect Capital Market Activities across the region in 2020.

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“…growth in the sub-Saharan Africa is projected to rise to 3.5 percent in 2020. However, average growth rate masks the disparity in growth between non-resource intensive and resource intensive countries,” reads the report in part.

MSE registered a declined return on index in 2019 of 3.41 percent from 34 percent in 2018.

There has also been domination of government debt instruments on the market compared to corporate bonds.

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Alliance Stockbrokers Limited Operations Managers, Thokozani Saulosi, said the local market remains one of the smallest stock exchanges in Africa based on traded values and volumes, listed companies and debt instruments.

He then said recent automation on the stock has, however, helped improve performance and efficiency.

“There is more work to be done to increase activity on the debt market compared to other stock exchanges in Africa. However, there is much potential for growth of the capital market with numerous eligible companies who can list,” Saulosi said.

Stockbrokers Malawi Limited Chief Executive Officer, Noel Kadzakumanja, attributed jittery performance of the market in the first two months of 2020 to political impasse.

“Compared to the S&P pan Africa share index that gained by 28.9 percent and the FTSE/ JSE Africa All Share index that was up by 8.1 percent, the MSE performance in 2019 was lower as the [Malawi All Share Index] Masi registered a gain of 3.41 percent. The low performance could especially be attributed to political risk associated with the tripartite elections and disputes that followed,” he said.

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