Stock market trading slows
A monthly market report published by the Malawi Stock Exchange (MSE) has shown that trading slowed on the local bourse in the month of July, registering an average daily volume of 1,047,162 shares compared to 7,391,068 shares traded in June 2021.
This reflects an 85.83 percent decrease in trading activities per day in the month.
The report indicates that the market transacted a total of 21,990,398 shares at a total consideration of K994, 831,445.53 in 298 trades lower than a total of 162,603,497 shares at a total consideration of K4, 769,000,833.21 in 326 trade transactions recorded in June.
However, the market registered a positive return on index as reflected in the upward movement of the Malawi All Share Index (Masi) to 36496.03 points from 35144.56.63 points registered in June.
“This gives a month on month return on index of 3.85 percent. The price gains registered by Illovo at 20.81 percent, Airtel at 9.9 percent, FMBCH at 8.66 percent, Press Corporation Limited at 8.34 percent, TNM, National bank and Standard bank were enough to offset share price losses registered by NITL at 15 percent, Old Mutual at 4.11, NBS and FDH bank resulting into an upward movement of the MASI,” the statement reads.
Stockbrokers Malawi Limited Chief Executive Officer Noel Kadzakumanja said the Masi has gained as it is driven by price changes on the counters and not by volumes and values traded.
“We should expect increased trades as some of big players are coming out of closed period, and as Covid situation is expected to get better,” Kadzakumanja said.
Alliance Stockbrokers Limited Operations Manager Thokozani Saulosi said in a separate interview that, when overall prices have risen in a certain period, Masi will increase.
He said the market exhibits some seasonality trends where activity is at its pick once companies’ financial statements are out, which acts as a trigger in decision-making by fund managers who are the biggest investors in the market.
“We should expect lower volumes and values than April and May. However this is not exhaustive as some months activity could pick up and the market registers high values and volumes,” Saulosi said.
MSE Operations Manager Kelline Kanyangala said part of the drop in trade is indicative of the seasonality factor of trading activity patterns that have been observed over time.
“Looking forward, we are hopeful that activity should pick up once most companies start releasing half-year financial results.
“However we are also aware of the downside risk posed by the Covid pandemic which, we have observed, causes a slowdown in activity when positive cases spike,” Kanyangala said.