The Malawi Stock Exchange (MSE) in January registering a positive month-on-month return on index of 1.84 percent (1.71 percent in $ terms) and 13.85 percent on a year-on-year basis.
However, during the month under review, the market registered a substantial decrease in both total traded volume of shares and value.
In its published Monthly Market Performance Report for January, MSE says the market transacted a total of 2,280,928 shares at a total consideration of K62,754,084.91 ($81,211.68) in 147 trades.
In the previous month of December 2020, the market transacted a total of 161,286,709 shares at a total consideration of K3,860,233,393.68 ($5,061,229.77) in 221 trades.
This reflects a 98.59 percent decrease in terms of share volume traded and a 98.37 percent (98.40 percent in Dollar terms) decrease in share value traded.
In an interview Wednesday, MSE Chief Executive Officer John Kamanga attributed the drop in traded share volume and value to seasonality of the economy as business tends to be slow during first months of the year coupled with a Covid cold.
He said most investors were still in a wait-and-see position while others opted out of the market for quick cash.
“We have seen that the tourism counters have been heavily affected to the effect that some investors have been withdrawing from the market by selling at a lower price but in huge volumes and some investors are also pushing funds into agricultural production,” Kamanga said.
However, he was upbeat that the market would stabilise in the coming months.
In a separate interview, capital market expert and Stockbrokers Malawi Limited Chief Executive Officer Noel Kadzakumanja said, amid the January market performance, the outlook remains promising.
“The market has performed better and that is mainly because of improvements we saw on Standard Bank shares. That improvement is arising from increased demand for the shares,” Kadzakumanja said.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.