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Malawi Stock Exchange arrays listing fear

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James Chimwaza

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and the Chamber for Small and Medium Enterprises have singled out fear of losing business ownership as a major factor deterring industry players from listing on the Malawi Stock Exchange (MSE).

But the MSE has since said the concerns are not valid, as listing conditions and requirements are soft.

This comes as the 16-counter MSE has, for the greater part since its inception in 1994, been hit by lack of new entrants both on the main board and an alternative capital market which is dominated by government debt instruments.

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In an interview, MCCCI President James Chimwaza said phobia has always been there.

“Companies are shy because the dominant players would rush to have majority stock and be exposed to corporate plans as shareholders. For indigenous firms, they would have to hand pick shareholder to avoid such,” Chimwaza said.

In a separate interview, Executive Director of the Chamber for Small and Medium Enterprises James Chiutsi said most small and medium enterprises do not know about the MSE let alone how it works.

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“There is a need for deliberate efforts to raise awareness of the MSE among SMEs. Also, the requirements for one to join the market are difficult for SMEs to meet. It is not easy to get accounts audited for an SME especially in difficult times like we live in. There is also need to ease up listing requirements for SMEs,” Chiutsi said.

MSE Chief Operating Officer Kelline Kanyangala said listing requirements for the alternative board market are more flexible to accommodate SMEs.

For example, a company is not required to have a history of profit to list on the alternative capital market board while the main board requires a three-year profit history.

Kanyangala said the local bourse continues to engage companies to enlighten them on listing requirements and opportunities that are on the market.

“This initiative started a long time ago and we came up with a concept where we have an incubation programme targeting potential issuers to link them with corporate advisers for 18 months so that, at the end of that period, the companies are able to list. That is progressing quite well,” Kanyangala said.

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