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MSE listing drought blamed on economy

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A capital market analyst has blamed the poor performance of the Malawi economy as being responsible for the listing drought on the Malawi Stock Exchange (MSE).

The last listing on the MSE was recorded in 2008.

Speaking in an interview on Tuesday, Stockbrokers Malawi Limited Chief Executive Officer Noel Kadzakumanja said the poor economic environment that has prevailed over the years has made it tough for most companies to meet the listing requirements.

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“The listing drought has been there possibly because of failure to meetlisting requirements due to poor performance since one of the listing requirements is that any company wishing to list on MSE must have a satisfactory profit history for the last three financial years.

“This should not be surprising as our economy has been declining during this period and performance for businesses has also been consequently affected,” said Kadzakumanja.

But he also noted that other companies with an impressive financial history have simply chosen to shun the market for their own reasons.

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“To such, we request that they consider listing in the nearest future,” said Kadzakumanja.

On prospects for the market in 2016, Kadzakumanja said it is difficult to predict how things will turn out this early in the year.

Looking back at the year 2015 where there was a lot of pressure in the economy evidenced by high interest rates, high inflation and significant deva lua t ion of Kwacha, Kadzakumanja said some companies made significant losses which may have also affected their share prices.

“Activity on the stock market was low and this could be attributed to reduced propensity to save in form of investing in shares by those would be stock buyers as a result of the same economic pressure.

“If the economic trend in 2015 continues, things will be worse in 2016. We still hope that the current government is making serious efforts for an economic turnaround to boost performance on the market,” said Kadzakumanja.

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