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Stock market bullish

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The stock market was bullish in the month of April 2017 registering a positive return on investment of 4.30 percent and an increase in total traded value despite a decrease in total traded volume.

Overall, the market made a turnover of K788.1 million in 76 trades against K248.4 million made in 90 trades the previous month.

This is according to a Monthly Market Report for April 2017 which further shows there was an increase of 217 percent in share value in the period under review.

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Daily average share trades exhibited similar trends where the market registered an average daily volume of 483,812 shares compared to 717,012 shares traded in March 2017.

The average daily turnover for April 2017 was K37.5 million compared to K11.8 million in March 2017.

Price gains registered by National Bank of Malawi, Standard Bank Malawi, Sunbird Tourism and TNM were the major drivers resulting into an upward movement of the Malawi All Share Index (Masi).

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“The market registered a positive return on index as reflected in the upward movement of the Masi from 14577.62 points registered in March 2017 to 15203.97 points registered in April 2017, giving a return on index of 4.30 percent,” the statement said.

The Foreign Share Index was steady at 2308.87 points while market capitalization increased in both kwacha and United States dollar terms from K632.13 million in March to K659.30 million in April.

In its Monthly Economic Report for February 2017, Alliance Capital Limited said bullish sentiments continued to prevail in the equities market through February 2017 with the market gaining 3.87 percent boosted by four gainers with only one decliner recorded.

The firm said even though the secondary market registered an increase in traded volume, total turnover decreased in February to K179. million from K299.5 million recorded in January.

“This indicates that the market traded relatively low priced stocks in the review period. However, the recovery in share prices enabled market capitalisation to increase from K569.2 million in January 2017 to K591.2 in February 2017,” the report said.

In an earlier interview, Chief Executive Officer of Alliance Africa Malawi Armstrong Kamphoni observed that there is need to introduce more trading items on the Malawi Stock Exchange (MSE) to create more activity and push up traded volumes.

He said only 10 percent shares are available for trading with the bulk of the shares held for long term investments by holding companies and pension funds leading to increased inactivity on the MSE over the past few years.

“Sometimes major movements in shares are one off and tend to affect the market. The market is moving on but affected by liquidity—to buy and sell shares instantly.”

“We have only 13 companies trading on MSE, the last companies to list were TNM and Real Insurance. If there was more float available, then we would have seen more activity,” he said.

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