Financial services group, FDH Financial Holdings Limited, has disclosed plans to wind up its stock broking business, the FDH Stockbrokers Limited.
This should be a big blow to the Malawi Stock Exchange which is still leaking the wounds of the delisting of Britam from the market last year.
FDH Stockbrokers has been a provider of stock broking services in Malawi for both retail and corporate investors since it was established in 2007.
In a statement yesterday, FDH Holdings said the winding up of the FDH Stockbrokers is subject to approvals from the Reserve Bank of Malawi.
“FDH Financial Holdings Limited and FDH Stockbrokers have arrived at this decision after taking into account the relevance, profitability and sustainability of the operations of FDH Stockbrokers Limited in its current group structure and service offering.
“FDH Financial Holdings felt it was necessary to withdraw its interest from the stock broking market and instead focus on the core strategic areas of the group that will allow it to continue to provide quality innovative services which have earned a stellar reputation in all its business arms,” the statement reads in part.
The development brings the number of stockbrokers on the local bourse to three. Malawi Stock Exchange Chief Executive Officer, John Kamanga, yesterday described the pulling out of FDH Stockbrokers as saddening.
“It is a sad development to lose a member because they are the ones who bring buyers and sellers to the market,” Kamanga said.
He emphasized that the development will not affect the levels of competition on the market.
Kamanga said the market still has three stockbrokers against 13 listed counters which should help sustain the levels of competition.
FDH Financial Holdings has since indicated that it will continue to offer these services through FDH Bank Limited, FDH Money Bureau, FDH Advisory Services and the First Discount House Limited.
It said necessary steps have been put in place to close all outstanding business transactions that FDH Stockbrokers entered into before the resolution to discontinue the operations was passed,in addition to that, all such transactions will be handled by a liquidator who will be announced with guidance from RBM.