Stock market bullish in August

KANYANGALA—Covid-19 remains a threat

The Malawi Stock Exchange (MSE) has started showing signs of recovery from effects of Covid-19 after it registered a month-on-month return on index of 4.95 percent in August.

The local bourse recorded a year-on-year return on index of 7.3 percent.

The development has resulted in an upward movement of the Malawi All Share Index (Masi) from 29851.63 points registered in July 2020 to 31328.10 points in August 2020.


An MSE Monthly Market Report issued yesterday shows that the market transacted a total of 314,772,282 shares at a total consideration of K4,857,975,498.30 in 407 trades during the month under review.

This reflects a 402.17 percent increase in terms of share volume traded and a 284.44 percent increase in share value when compared to 62,683,022 shares traded K 1 , 2 6 3 , 6 3 9 , 8 7 9 . 9 2 realised in July.

“Daily average share trades exhibited similar trends where the market registered an average daily volume of 14,989,156 shares compared to 2,849,228 shares traded in July 2020, reflecting an increase of 426.08 percent.


“The average daily turnover for August 2020 was K231, 332,166.59 compared to K57, 438,176.36 in July 2020, reflecting an increase of 302.75 percent,” reads the report in part.

The report shows that price gains registered by FDH Bank at 29 percent, Airtel Malawi at 22.86 percent. Mpico at 14.29 percent and National Bank at 12.50 percent were enough to offset share price losses by Illovo at 14.81 percent, TNM at 8.98 percent, FMBCH at 5.88 percent, NBS Bank at 0.26percent and NITL at 0.01 percent.

Chief Executive Officer of Stock Brokers Malawi Limited, Noel Kadzakumanja, said the trend is expected to continue in coming months.

“Values and volumes traded have also increased and it might not be surprising to see this trend continuing in the next months since the economy is now opening up after months of slow down due to Covid-19,” Kadzakumanja said.

MSE Operations Manager, Kelline Kanyangala, said the increase in traded volumes and value was mainly due to negotiated deals on two counters in which 228.79 million shares were traded.

She said listing of an additional counter, FDH Bank, in the month also contributed to the increase in traded volumes.

“The positive return was on account of gains registered on four counters despite declines being registered on five counters. Looking ahead, the main downside risk remains the Covid-19 pandemic. We are yet to see the full impact the Covid-19 pandemic will have on performance of the stock market.

“If you look at the trading statement released so far, you will see that most companies half year results are projected to be lower than what was registered in the prior year. Only a few are projected to register growth in returns. Nonetheless, we remain hopeful that the brunt of the pandemic will only be felt in this year and that things will improve for companies going forward,” Kanyangala said.

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