The Malawi Stock Exchange (MSE) has recorded sustained losses since the announcement of a 30 percent capital gains tax on share disposals, with market indicators showing a bearish trend and investor confidence shaken.
Figures drawn from MSE weekly reports beginning the week ending November 28, 2025, a week after the tax measure was announced; show that the Malawi All Share Index (Masi) fell from 635,645.46 points on 21 November to 598,062.80 points by 23 January 2026.
This represents a 5.91 percent drop. Market capitalisation declined by approximately K916 billion, from K34.015 trillion to K33.099 trillion.
The tax measure, announced by Finance minister Joseph Mwanamvekha, removes the exemption previously granted to shares held for more than one year.
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The move has drawn sharp criticism from market participants, including the Minority Shareholders Association of Listed Companies (Misalico), which says the tax threatens to reverse years of progress in financial inclusion and market development.
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In a position paper addressed to the Minister, Misalico General Secretary Frank Harawa warned that the tax would discourage Malawians from investing on the stock market and could undo the progress registered this far.
“People will be dis-incentivised to sell their shares as they try to avoid the hefty 30 percent capital gain tax. This is likely to negatively impact the volume of trades, price discovery, and, most importantly, entire market liquidity,” Harawa said.
The weekly trading data support Misalico’s concerns as major counters such as FMB Capital Holdings (FMBCH), NBS Bank, and National Bank of Malawi (NBM) have posted consistent losses.
For example, FMBCH dropped from K3,641.53 on 21 November to K3,013.39 by 23 January—a 17.24 percent decline. NBS Bank fell by 11.33 percent while NBM shed 4.51 percent.
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FDH Bank, Standard Bank, and TNM also recorded losses ranging from 5 to 6 percent over the same period.
Only Illovo Sugar and Sunbird Tourism posted gains, with Sunbird surging by 134 percent, attributed to a post-Covid tourism rebound.
Misalico also raised concerns about the broader economic implications of the tax.
“This has the potential to cause market crush, with pension funds likely to be the biggest losers because over 60 percent of pension fund assets are invested in listed equities,” Harawa said.
The association warned that the tax could push investors toward informal savings mechanisms, reduce company capacity to raise capital and ultimately slow job creation and development.
Misalico has since proposed alternative revenue measures, including a 1 percent levy on trades, listing of government-owned companies such as Salima Sugar and Escom, and offloading of government shares in Sunbird Tourism.
“This model works well in Zimbabwe and still brings the government revenue without damaging the market,” Harawa said.
In an earlier interview, MSE Chief Executive Officer John Kamanga said the introduction of a capital gains tax triggered a short-term increase in selling, as some investors sought to realize gains before the tax took effect, however, this surge was largely transitional.
“The Exchange is engaging with government to implement measures that balance market attractiveness as a platform for raising longterm and patient capital with fair taxation. A key focus remains expanding participation among low-income Malawians and youth.
“With rising gambling activity, it is increasingly important to position the capital market as a sustainable, productive, and rewarding avenue for long-term financial inclusion and wealth creation,” Kamanga said.
Minister of Finance Joseph Mwanamvekha has defended tax measures being implemented by the government saying they target wealthy Malawians rather than the poor.
“We are working on the principle that those that earn more should contribute more. We don’t want to squeeze the very poor people that we want to protect. Those that make more money have to contribute more,” Mwanamvekha said during the pre-budget consultation in Blantyre recently.
