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Mixed fortunes for Malawi Stock Exchange in 2020

John Kamanga

The Malawi Stock Exchange (MSE) registered a mixed fortunes in 2020 as share volumes traded increased while the value traded decreased compared to the preceding year of 2019.

According to a report from the local capital market, in the year under review, the market transacted a total of 1.6 billion shares at a total consideration of K41 billion in 3,114 trades while in the corresponding period of 2019, the market transacted a total of 1.3 billion shares at a total consideration of K46.3 billion in 3,064 trades.

This reflects an 18.03 percent increase in share volume traded and a –11.40 percent decrease in share value traded.

Speakin in an interview, MSE Chief Executive Officer John Kamanga attributed the mixed performance to the Covid-19 pandemic, political instability and listing of new companies on the market.

”Some of the counters were heavily affected, especially the hospitality industry, and some counters saw the price going down, so as in the result of that, investors increased their sales but at a lower price but we also saw some counters where there was an increase such as the banking and the telecommunications industries,” Kamanga explained.

In the year, two counters were added to the market bringing the total to 16 after the listing of Airtel Malawi and FDH Bank.

Both companies saw the prices going up above the Initial Public Offer prices after listing.

Even though 2021 has so far been faced with political stability after the June 23 2020 elections, the second wave of the Covid-19 pandemic has hit the country hard threatening the growth of the economy.

Kamanga added that he believes that the market will be better at the back of a good rainfall pattern and the Affordable Input Programme which will result in bumper maize harvest which is the biggest contributor to macroeconomic indicators such as inflation.

“The World Bank and International Monetory Fund have forecast that there will be some recovery to the economies and we are also hopeful that agricultural activities will turn out positively. Therefore 2021 might be a mixed bag but we are hopeful that it will be a good year,” he added.

The market also registered a positive return on index as reflected in the upward movement of the Malawi All Share Index from 30252.20 points registered on January 2, 2020 to 32392.84 points registered on December 31, 2020, giving a return on index of 7.08 percent compared to 4.38 percent registered in 2019.

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