The Malawi Stock Exchange (MSE) registered a mixed performance in the first quarter (Q1) of 2024 characterised by a positive return on index of 2.96 percent and a slowdown in transaction volumes.
A first quarter market report published by the MSE indicates that the return on index, though positive, is lower than the 29.44 percent registered during the corresponding period of 2023.
The report further shows that the market transacted a total of 53,935,741 shares at a consideration of K8.91 billion in 2,516 trades.
This reflects a 54.61 percent decrease in terms of share volume and a 30.04 percent increase in share value when compared to the 118,816,338 shares at a total consideration of K6.85 billion in 1,545 trades recorded in the corresponding period of 2023.
“Daily average share trades exhibited similar trends where the market registered an average daily volume of 884,192 shares in the first quarter of 2024 compared to 1,916,393 shares traded in the corresponding period in 2023 reflecting a decrease of 53.86 percent.
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“The market registered a positive return on index as reflected in the upward movement of the Malawi All Share Index (Masi) from 110,951.21 points registered on January 1 2024 to 114,236.98 points registered on March 31 2024, giving a return on index of 2.96 percent,” the report reads.
It adds that market capitalisation, increased from K6 trillion in January to K6.18 trillion in March 2024.
Stockbrokers Malawi Limited Equity Research Analyst Kondwani Makwakwa said the upward trajectory of the Masi can be attributed to the market’s response to the release of financial statements by select listed companies, showcasing significant improvements in profitability compared to the preceding period.
He said it is noteworthy that the local bourse is predominantly comprised of banks, which exhibited commendable profitability performance in the fiscal year 2023.
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“Consequently, this strong performance has spurred demand for shares in some of these companies. The outlook for the year appears promising. It is pertinent to recall that in 2023, certain companies’ financial statements were adversely impacted by currency devaluation.
“However, these entities are expected to embark on a path of recovery, assuming no significant further devaluations occur. Furthermore, the declaration of robust dividends may further stimulate demand for these stocks,” Makwakwa said.
In a separate interview, MSE Chief Operations Officer Kelline Kondowe said despite the volatility and slowdown which is not out of the ordinary for markets, they are happy that the market continues to generate positive returns for investors.
“Looking ahead, we note that the market continues to operate in a challenging macroeconomic environment which tends to suppress demand and create uncertainty.
“However, the economy is projected to register an improved performance in 2024 and that should help bolster investor confidence,” Kondowe said.
