Stock market earns K3.1 billion
The stock market has extended its bullish run into the second quarter, realising a turnover of K3.1 billion.
In the corresponding period 2016, the market transacted slightly over 91 million shares at a total consideration of K991.6 million. This reflects a 17.07 percentage increase in terms of share volume and a 222.36 percentage increase in share value.
According to an update from the Malawi Stock Exchange (MSE), the market registered a positive return on index as reflected in the upward movement of the Malawi All Share Index from 14577.62 points registered on April 1 to 15772.51 points registered on June 30.
This gave a return on index of 8.20 percent compared to –2.19 percent registered during the same period last year.
The price gains registered by FMB, Illovo, NBM, Nico, NITL, PCL, Standard Bank, Sunbird, TNM and OML were enough to offset share price losses registered by Mpico, resulting into an upward movement of the Malawi All Share Index.
Both the Domestic Share Index and the Foreign Share Index also went up.
Market capitalisation also increased in both kwacha and United States Dollar terms from K632.1 million ($871.1million) in April 2017 to K683.9 million ($942.5 million) in June 2017.
Daily average share trades exhibited similar trends where the market registered an average daily volume of 1,719,070 shares compared to 1,468,401 shares traded in the corresponding second quarter of 2016.
The average daily turnover for the second quarter 2017 was K51.5 million compared with K15.9 million for the corresponding second quarter 2016.
T he month of May registered the highest in terms of both value and volume.
In an earlier interview, Chief Executive Officer of Alliance Africa Malawi, Armstrong Kamphoni, said good results are dependent on the performance of big companies listed on the MSE.
According to Kamphoni, a bullish run may tilt the other way if big companies post poor results.
“It depends on good results from companies. The market is expected to respond favourably to the trends, but some few big companies have been pulling down performance of the market. But, it is likely that the bullish run will extend to the foreseeable future if companies continue to post good results,” Kamphoni said.
The MSE has also continued to be affected by the number of trading items. Experts have suggested that there is need to introduce more trading items to create more activity and push up traded volumes.
Currently, about 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 market.
