More companies needed for robust economic growth—RBM

An increase in companies listed on Malawi Stock Exchange (MSE) could lead to a robust market if people are encouraged to buy more shares for investment that can foster economic growth.

Reserve Bank of Malawi (RBM) general counsel and bank secretary Samuel Malitoni said this at Sunbird Ku Chawe in Zomba on Monday when he opened a day-long workshop on securities law for the capital markets sector in Malawi.

Notable figures at the workshop were Stockbrokers Association of Malawi president Armstrong Kamphoni, interim chairperson for Fund Managers Association of Malawi, Mark Mikwamba and the chief operations officer for MSE John Kamanga, among others.

In his keynote address, Malitoni said RBM wanted to hear from the industry challenges encountered in the implementation of the new Securities Act which became active in 2010.

“The Reserve Bank of Malawi takes this opportunity to provide explanations to the market over some areas of the Act and the directives which remain unclear currently. Without appropriate legal and regulatory reforms, it becomes difficult for an economy to deepen and widen its financial market to efficiently allocate the scarce resources.

“A well-functioning, developed and transparent financial market increases incentives for investor participation thereby promoting the savings and investment culture which ultimately translate into sustainable economic growth and development of an economy. There is need to create an enabling environment that will channel resources, particularly pension funds towards infrastructural development in this country,” said Malitoni.

He added that the role of the regulator in the capital market sector is to ensure the viability, integrity and stability of the financial system as well as that of public confidence in the institutional financial structure of the economy as a whole is maintained.

It is to this fact that the general counsel and bank secretary concluded that due to the heterogenic and increasingly complex nature of the capital markets sector, its regulation and supervision are obviously complicated; hence requiring a more robust legal framework.