Share trades on the Malawi Stock Exchange (MSE) picked up exponentially in February, raising hopes of a significant capitalisation boost for listed companies in 2024.
According to a published monthly market performance report, the 16-counter market transacted 21,645,195 shares at a consideration of K3.3 billion in 893 trades in the month.
This represents an 80.64 percent increase in share volume traded and a 58.04 percent rise in share value when compared to 11,982,617 shares at a consideration of K2.1 billion recorded in January.
“Daily average share trades exhibited similar trends where the market registered an average daily volume of 1,030,724 shares compared to 570,601 shares traded in January 2024, reflecting an increase of 80.64 percent,” the report reads.
However, the market registered a negative return on the index which culminated in a downward movement of the Malawi All Share Index (Masi) from 115,670.54 points registered in January 2024 to 113,039.66 points registered in February.
Stockbrokers Malawi Limited Equity Research Analyst Kondwani Makwakwa said the increase in trading activity can be attributed to emerging demand for some stocks that experienced price drops, as investors believe they will soon recover.
However, he was quick to note that there remains a surplus of sellers across various counters, likely due to investors selling their shares to fulfill other financial obligations or invest in alternative opportunities.
“The outlook appears positive, with the anticipation that most listed companies will report profitability surpassing that of the previous year.
“This potential increase in profitability could lead to the declaration of good dividends, consequently triggering demand for shares,” Makwakwa said.
Stock market analyst Bond Mtembedzeka said such trends are normal stressing that, as the year progresses, trading volumes pick up.
“There is still interest in the capital market and generally listed companies have done well in 2023. There is nothing adverse that could weigh down the stock market in the short to medium term,” Mtembedzeka said.
MSE Chief Operations Officer Kelline Kondowe said one of the factors which led to the negative performance is the impact of an increase in policy rate.
