Slow second quarter start at stock exchange
The Malawi Stock Exchange (MSE) registered a slowdown in trading in April as 19,494,634 shares exchanged hands at a value of K1.5 billion in 657 trades.
The volume is lower than the 27,385,170 shares traded in the preceding month where K1.7 billion was realised in 599 trades.
According to a monthly market performance report published by the MSE recently, this reflects a 28.8 percent and a 12.1 percent decrease in share volume and value traded, respectively.
However, the report indicates that the market registered a positive return on index as reflected in the upward movement of the Malawi All Share Index (Masi) from 80,298.12 points in March to 86,462.61 points in April.
“This gives a month-on-month return on an index of 7.68 percent. Equity market capitalization also increased in both Kwacha and Dollar terms from K4.33 trillion ($4.22 billion) to K4.66 trillion ($4.54 billion),” the report reads.
In an interview, MSE Chief Operating Officer Keline Kondowe, however, said the market performance remains good, despite the decline in volume and value of shares traded.
“There are quite a number of explanations that can be provided for the performance. For instance, some of the share price gains are being anchored by performance of the companies given that most listed companies are releasing their financial results.
“At the same time, there has been increased demand for shares on the market as investors look to the stock market as an avenue for value preservation especially given developments within the macroeconomic environment,” Kondowe said.
She added: “We remain optimistic that investors will be able to benefit from their investment. As the MSE, our focus will remain on bringing in more companies to list on the Exchange so that we can increase the options that investors have in choosing companies to invest in.”
Equity market analyst Kondwani Makwakwa said the positive performance of Masi was mainly due to the rise in share prices of some of the counters.
“Performance of the Masi is linked to share prices. So, despite any drops in trades, if the share price rises significantly, then expect the Masi to rise.
During the month under review NBS saw its share prices increasing by 27.2 percent, Nitel share prices went up by 24.9 percent, Old Mutual soared by 16.47 percent and TNM share prices grew by 15.74 percent.
There were also share price increases in Illovo at 13.34 percent, National Bank at 13.24 percent, Nico at 10.29 percent, Airtel 6.76 percent, Standard Bank at 2.25 and Sunbird.
These increases were enough to foster a positive performance than the share losses recorded in the remaining five companies on the market.