Stocks closed Higher in oct
Stocks on the Malawi Stock Exchange (MSE) closed higher in October, registering a positive return on investment of 0.28 percent despite a decrease in both total traded volume and traded value.
A monthly market report for October 2016 shows that the 13-counter bourse transacted a total of 2.6 million shares raising K331.4 million (about $459 835.71) in 64 trades.
This is lower than what was transacted the month before when 29.1 million shares changed hands, raising K520.6 million ($722 459.09) in 104 trades.
Because of this, there was a decrease of 91.08 percent in terms of share volume and a 36.35 percent decrease in share value.
“Daily average share trades exhibited similar trends where the market registered an average daily volume of 123 865 shares compared to 1.3 million shares traded in September 2016,” reads the report in part.
In the month under review, the top five counters that registered capital gains were Blantyre Hotels Limited (BHL) (55.8 percent), Mpico Limited (39.17 percent), FMB (12.12 percent), Sunbird (11.89 percent) and Illovo Sugar (Malawi) Limited (0.01 percent).
The price gains in the five counters—which were enough to offset share price losses in National Bank of Malawi, NBS Bank, Nico Holdings Limited, National Investment Trust Limited, Standard Bank and TNM—pushed the overall market index to 13 782.48 points from the previous month’s 13 744.12 points.
The foreign share index, anchored by one foreign counter, Old Mutual Limited and has been stagnant for a number of months, was steady at 2 026.07 points.
The report shows that market capitalisation—the market value at a point in time of the local bourse—increased in both kwacha and dollar terms from K586 620.72 million (about $813.93 million) in September 2016 to K588 257.66 million (about $816.20 million) in October 2016.
Two government bonds—five-year K822 million at a coupon rate of 10 percent and three-year K106.8 billion at a coupon rate of 15 percent—are trading on the MSE.
However, during the review period there were no trades on the bonds.
In an earlier interview, MSE chief executive officer John Kamanga said the bonds present an opportunity for State-owned enterprises (SOEs) to raise funds on the capital market for their infrastructure developments.
With interest rates hovering at around 40 percent, the capital market could offer an alternative avenue for long-term financing, he said.
But Kamanga said the market is also faced with challenges and these include non-automation on the market, which makes it difficult for a variety of products to be traded there.
“In manual system, you are constrained. Market automation is key because it could enable us to reach out to rural areas through mobile money platforms,” he said. n
