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Positive outlook for stock market

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Bearish outcomes which marred the performance of the Malawi Stock Exchange (MSE) in 2016 may not spill over into 2017. Officials at the MSE believe predictions pointing to a general positive performance of the economy this year as well positive trading statements posted by some listed companies are likely to boost operations of the local bourse.

MSE Operations Manager, Esnart Lweya, said the stock market started 2017 on a positive note, a sign of positive performance this year.

“We have started on a good note, although it is a little too early to tell. Most companies have posted positive trading statements which are also an encouragement to investors,” Lweya said.

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She said this is likely to trigger improvements in the performance of the bourse as well counters, specifically in areas of price movement.

Making reference to Reserve Bank of Malawi’s economic outlook for 2017, which points to an improvement in key macroeconomic indicators, Lweya said the operating environment is likely to improve, thereby influencing positive performance in listed counters.

The stock market did not only experience drought of new entrants in 2016 but also had a bearish performance, registering a negative return on investment of 8.53 percent.

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This is compared to a negative return of 2.17 percent the local bourse recorded in 2015.

In 2016, MSE also recorded a decrease in both total traded value and volume compared to a corresponding period in 2015.

According to MSE 2016 Annual Market Performance Review, the market transacted a total of 410,895,390 shares at a total consideration of K6.1 billion in 913 trades.

“2016 was indeed a challenging year for Malawi Stock Exchange. The state of the economy in the year contributed largely to the negative performance. However, overall individual performance was positive,” Lweya said.

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