Malawi Stock Exchange growth slow—RBM
The Reserve Bank of Malawi (RBM) has said the Malawi Stock Exchange (MSE) has registered insignificant growth in the 20 years it has been in existence largely due to macroeconomic instability.
Speaking during the 20th anniversary celebrations of MSE in Blantyre on Friday, RBM Governor Charles Chuka said the local equity market’s subdued growth is contrary to the regulator’s expectations at the time it opened its doors in 1996.
He said the economy has been slow in creating wealth because of macroeconomic instability and stagnation in economic diversification.
Said Chuka: “As of last year, Malawi’s GDP was only $4.4 billion when that of Zimbabwe, Zambia and Botswana reached $14.2 billion, $27.1 billion and $17.2 billion, respectively. It should not be surprising, therefore, that MSE still requires central bank support after 20 years in operations.
“With the benefit of hindsight, therefore, the [stock] exchange has been one of the most expensive to the general public, not because of mismanagement or lack of vision, but because of macroeconomic instability.”
Figures from RBM indicates that MSE remains the smallest in the Southern African Development Community (Sadc) region with a market capitalisation, as at the end of 2015, of $1.3 billion compared with $2.7 billion for Lusaka Stock Exchange (LuSE), $3.1 billion for Zimbabwe Stock Exchange (ZSE) and $4.5 billion for Botswana Stock Exchange (BSE).
In his remarks, MSE chief executive officer John Kamanga said that despite the tremendous achievements and opportunities that have been created by MSE over the years, there is more that needs to be done if MSE is to register vibrant growth.
“We have provided a platform for raising alternative capital at a low cost and created a pool of investors in excess of 40 000 with companies listed on the exchange growing to international levels,” he said.
Kamanga said they are not satisfied with the performance of MSE because there are still few listed companies.
During the event, MSE presented awards to listed companies and four stockbroking firms.
