Jittery 2019 start for stock market

By William Kumwembe:

The Malawi Stock Exchange (MSE) has started 2019 on a slightly low note, registering a 2.20 percent decrease in share value in January 2019, despite recording a 9.11 percent increase in traded volume.

During the month under review, the market ended the listing drought with the listing of Icon Properties Plc whose share price inched upwards by 37.14 percent on the first day of trading.

But the market was marginally bearish as it registered a month-on-month return on index of -0.60 percent (-0.64 percent in US dollar terms), 29.63 percent on a year-on-year basis.

In its January Monthly Performance Report issued yesterday, MSE said the average daily turnover for January was K112.2 million ($153,930.25) compared to K114.7 million ($157,290.64) in December 2018.

In an interview Wednesday, MSE Operations Manager, Esnart Suleman, attributed the drop in share value to a drop in share prices of four counters; NBM, Nico, TNM and Mpico.

“There has been no negative news on the counters so this was probably due to some investors seeking liquidity or cash during the period,” Suleman said.

The market transacted a total of 46,773,797 shares at a total consideration of K2.3 billion ($3,232,535.16) in 221 trades.

In December 2018, the market transacted a total of 42,869,348 shares at a total consideration of K2.4 billion (US$3,303,103.52) in 265 trades.

The market registered a negative return on index as reflected in the downward movement of the Malawi All Share Index from 28983.53 points registered in December 2018 to 28808.89 points registered in January 2019.

The market registered a positive return on index of 34 percent as at December 2018.

Suleman said the 2018 market performance would spill over into the rest of 2019.

She said the outlook is good as the local bourse intends to build on the automated trading system it launched this year.

“The outlook is still positive; the economic fundamentals have been good and as a result companies are expected to post positive results for 2018. Investors may read positively into this and performance of the market may increase,” Suleman said.

She said the recent decline in interest rates from 16 percent to 14.5 percent would also woo investors to join the capital market as returns on the money market will be low.

In 2018, MSE phased out issuing of physical share certificates through the local bourse’s automation initiative.