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FDH Bank share price up 50% on listing day

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Ellias Ngalande

FDH Bank Monday listed on the Malawi Stock Exchange (MSE) with pomp to become the sixteenth counter and fifth bank on the local bourse.

Shareholders and investors were excited on the listing day as share prices went up by 50 percent to trade at K15 per share.

The jump is from an Initial Public Offer (IPO) of K10 per share.

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By 9:45 am, about 985,000 shares of the bank were traded on the local bourse, a development market analysts rated as an indication that there is high appetite on the market.

FDH Bank listing comes after a 2.1 percent over subscription of the IPO, where 1.38 billion shares were offered but 1.41 billion shares were applied for at a value of K14.1 billion.

Listing of the bank has added K69.01 billion to the MSE market capitalisation according to MSE Chief Executive Officer, John Kamanga.

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Speaking prior to the listing, Kamanga said other than deepening the capital market and increasing market liquidity, the listing would be beneficial for Malawians through growth in capital markets and the economy at large.

“Today we are witnessing the fulfilment of this objective where there are about 2,800 new shareholders into the company, the majority of which are retail investors and 40 as institutional investors,” Kamanga said.

Following the listing, FDH Financial Holdings Limited holds 74.05 percent, Malawi Government holds 4.75 percent, MSB Employee Share Ownership Scheme has 1.2 percent and the public has 20 percent stake.

FDH Bank Managing Director, Ellias Ngalande, hailed the listing, rating it as a success step towards further growth of the bank.

“This [the listing] means we now have access to a wider investing community whenever we want to raise capital. It further means we have more shareholder and more people to respond to and ensure we deliver.

“We believe that there will be more trading going forward and that the value of the bank would continue to go up,” Ngalande said.

Among other things, FDH Bank listing is line with the bank’s contractual obligation with the government as part of the Malawi Savings Bank acquisition.

Public Private Partnership Commission Acting Chief Executive Officer, Audrey Mwala, said entry of FDH Bank on the stock market entails a significant step on the path of financial inclusion.

She then urged Malawians to participate in activities on the capital market as a way of inculcating savings and investment culture.

“This is a great opportunity as it allows a lot of Malawians to become shareholders. It also provides Malawians an opportunity to benefit from the investment itself,” Mwala said.

In the past five years, the bank has recorded an average revenue growth of 19.2 percent per annum.

In the year ending December 31, 2019, the bank registered a post tax profit of K7.84 billion, up from a K5.96 billion profit registered in the preceding year.

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