The Malawi Stock Exchange (MSE) showed strong resilience between July and September 2024, registering significant return on index and improved trading activity driven by the banking sector.
A quarterly report shows a market with a positive return on index of 17.82 percent in third-quarter (Q3) from 8.99 percent in corresponding period in 2023 while also indicating increases in value and volume of shares traded.
Reads the report in part: “In Q3 of 2024, the market registered a positive return on index of 17.82 percent or 17.81 percent in dollar terms, 28.60 percent or 24.85 percent in dollar terms year to date compared to 8.99 percent or 2.90 percent in dollar terms in Q3 2023.
“The market also registered an increase in both total value of shares in Malawi kwacha terms and total volume of shares traded. There were no trades on the listed debt securities.”
On trading activity, the market transacted a total of 192.61 million shares at a total consideration of K29.13 billion ($16.80 million) in 4 378 trades from 156.94 million shares at a total consideration of K23.79 billion ($21.82 million) in 3 334 trades.
“This reflects a 22.73 percent increase in terms of share volume traded and a 22.47 percent (-23.01 percent decrease in US dollar terms) increase in share value traded. The decrease in US dollar terms traded value is as a result of the depreciation of the Malawi Kwacha,” it says.
Five companies, led by FDH and NBS Bank, whose shares gained 75.47 and 65.23 percent, respectively lifted the market, according to the report, while Airtel, Icon Properties and Illovo were among the five companies whose shares plunged during the quarter.
In an interview, equity investment analyst at Stockbrokers Malawi Limited Kondwani Makwakwa attributed the market resilience to positive prospects of most listed companies in first half performance while not ruling out current macroeconomic risks.
“In the just-ended quarter, numerous companies have reported impressive half-year results and declared substantial dividends, thereby delighting shareholders and fueling demand, which in turn has driven prices upward.
“However, despite the market’s resilience this year, potential macroeconomic risks, such as currency fluctuations, may foster cautious sentiment among investors.
Consequently, investors are advised to maintain diversified portfolios to mitigate risk and capitalise on opportunities across various sectors,” Makwakwa said.
In a separate interview, Central Region Minority Shareholders Association of Listed Companies chairperson Purity Chitalo expressed delight with the market performance which guarantees capital gains for shareholders.
“A lot of counters seem to have stabilised, and are experiencing share price gains.
“Looking ahead, shareholders stand to continue benefiting from better dividends and capital gains,” Chitalo said.
In second-quarter 2024, the market registered a 6.01 percent return on index while it registered a decrease in both total traded value and volume of shares highlighting the significant recovery in the third-quarter.
