Investors on the main board of the Malawi Stock Exchange (MSE) can afford a smile as eight out of 10 listed companies that have issued trading statements have projected an increase in profit above 20 percent.
Among other things, listings requirements for the MSE demand that a listed company publish a trading statement as soon as it is reasonably certain that the financial results for the period to be reported next will differ by at least 20 percent from the financial results for the previous corresponding period.
Trading statements, that we have seen, show that some eight listed companies’ profits will increase by between 20 percent and 150 percent.
For example, FMB Capital Holdings (FMBCH) advises that its forecast consolidated profit after tax for the interim period ended June 30 2022 will be more than 70 percent higher than the consolidated profit after tax it reported for the interim period ended 30 June 2021.
The other companies include Sunbird Hotels and Resorts, which has projected a 150 percent rise in profit, Nico 35 percent, National Bank of Malawi 30 percent, Standard Bank 25 percent, Nitel 22 percent while Icon properties and FDH bank have projected a 20 percent profit rise.
However, two companies, Blantyre Hotels Limited and Airtel Malawi, have projected a loss trajectory at -65 percent and -25 percent, respectively.
In an interview, MSE Chief Operating Officer Kelline Kanyangala said the trading statements are an indication of good performance of the listed companies in regards to the half year results.
“I think, when the year started, we saw the economy opening up even more compared to what was experienced in the past two years.
“As the exchange, we do expect that the performance will also be reflected in share prices increases. As at the end of May, the return stood at 10.78 percent, which is really good for the market,” Kanyangala said.
“…however, we are also aware that the recent developments within the macroeconomic environment do pose a downside risk to the performance of the companies which ultimately could affect share prices. However, we will have a more clear picture as the year progresses,” she added.
Chief Executive Officer of Stockbrokers Malawi Limited Noel Kadzakumanja concurred with Kanyangala, saying the performance will excite trading of shares on the market.
“This means that the majority of listed companies are doing well. As such, we should expect generally good performance of the counters on the share market,” Kadzakumanja said.
In recent months, performance of the market has shown continued recovery from the slowdown brought about the Covid pandemic, witnessed by an increase in the Malawi All Share Index.