By Chimwemwe Mangazi:
The Malawi Stock Exchange (MSE) saw a sluggish start for the year with reduced volume and value in January, a published monthly market report shows.
In the report, MSE showed that the market transacted a total of 11,982,617 shares at a total consideration of K2.07 billion in 870 trades in January 2024.
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This reflects a 26.53 percent decrease in share volume traded and a 2.51 percent dive in share value traded when compared to the 16,309,567 shares at a total consideration of K2.12 billion in 615 trades recorded in December 2023.
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“Daily average share trades exhibited similar trends where the market registered an average daily volume of 570,601 shares compared to 858,398 shares traded in December 2023, reflecting a decrease of 33.53 percent,” the report reads.
However, 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 in December to 115,670.54 points registered in January 2024.
In an interview, Stockbrokers Malawi Limited Equity Research Analyst Kondwani Makwakwa said the sluggish start can be attributed to an imbalance between sellers and buyers, with a notable surplus of sellers across several counters.
“This discrepancy is likely influenced by reduced liquidity among retail investors, who typically face heightened financial obligations in January.
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“Moreover, both retail and institutional investors are exercising caution, opting to await the release of financial results beginning in March before making informed investment decisions. However, amidst this cautious sentiment, the positive trading statement suggests a promising outlook for the year ahead,” Makwakwa said.
However, MSE Chief Operations Officer Kelline Kondowe said it is a seasonal trend that activity subsides in January when compared to December activity.
“You will note that in the current period, when compared to January last year, there is still a significant decline of around 80 percent in terms of volumes traded.
“This can be attributed to a number of factors, one of which being the reduction of disposable income due to the prevailing macroeconomic environment especially post the devaluation,” she said.
