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Market bearish as five counters suffer losses

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The market was marginally bearish in May 2016, registering a negative return on investment of -0.36 percent compared to 0.76 percent in May 2015 with a decrease in both traded value and volume while no trades were registered on the two government bonds.

An update from the Malawi Stock exchange shows only two counters, TNM and FMB, registered capital gains while NBS Bank, Nico Holdings Limited, National Investment Trust Limited and Illovo Sugar Malawi suffered capital losses in the period under review.

And the price gains registered by FMB and TNM were not enough to offset share price losses registered by the four counters resulting into a decrease in the Domestic Share Index by -0.37 percent from 10109.50 points to 10072.19 points.

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In total, the market transacted 30,578,347 shares at a total consideration of K302,536,644 in 82 trades, this is compared to 54,962,804 shares changing hands at a total consideration of K528,512,298.00 in 74 trades in the previous month, reflecting a -44.37 percent decrease in terms of share volume and -42.76 percent decrease in share value.

“The market registered an average daily traded volume of 1,456,112 shares in May 2016 compared to 2,617,276 shares in April 2016. The average daily turnover for May was K14,406,506.86 compared to K25,167,252.29 for the previous month, reflecting a decrease of -42.76 percent (-44.62 percent in US dollar terms),” reads part of the market commentary.

It further said the market registered a negative return on index as reflected in the downward movement of the Malawi All Share Index from 12861.07 points registered on April 30, 2016 to 12814.18 points registered on May 31, 2016, giving a monthly return on index of -0.36 percent. The Foreign Share Index was steady at 1762.13 points

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In an earlier interview, Chief Executive Officer of Alliance Africa Malawi, Armstrong Kamphoni, observed that there is need to introduce more trading items on the Malawi Stock Exchange to create more activity and push up traded volumes.

He said only 10 percent shares are available for trading with the bulk of the shares held for long term investments by holding companies and pension funds leading to increased inactivity on the Malawi Stock over the past few years.

“Sometimes major movements in shares are one off and tend to affect the market. The market is moving on but affected by liquidity—to buy and sell shares instantly,” he said.

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