The 16-counter Malawi Stock Exchange (MSE) has delivered performance in the third quarter, with the Malawi All Share Index (Masi) surging by 75 percent between July and September, making it one of the strongest rallies in recent times.
MSE data show that the overall measure of market performance jumped from 329 923 points at the start of July to close the quarter at 578 389 points while market capitalisation expanded from K17.96 trillion to K31.53 trillion, adding more than K13 trillion in three months.
The Domestic Share Index, the measure of domestic counters’ performance, rose by 77 percent while the Foreign Share Index, which dropped in the second quarter (Q2), rebounded by 64 percent. Turnover also tripled, with September recording K1.3 billion in trades compared to K483 million in July, the report shows.
The rally built on momentum from Q2 when the Masi increased by a modest 10 percent driven mainly by the five listed banks and telecommunications firms.
In an interview on Thursday, stock market investor Benedicto Bena Nkhoma said MSE’s performance reflects realities of the specific companies’ performance and future prospects.
“Most of the listed companies in the financial sector have performed well above inflation,” he said.
Banks were at the centre of the Q3 surge, with share prices soaring well above inflation. National Bank of Malawi plc (NBM) led the charge, climbing from K6 200 at the start of July to K10 905 by September, an increase of 76 percent.
FDH Bank plc was not far behind, advancing from K350 to K638, representing a gain of 82 percent while NBS Bank plc strengthened from K700 to K1 025, up 46 percent over the quarter.
Nico Holdings plc more than doubled its value, rising from K865 to K1 740, a jump of 101 percent. The most dramatic move came from National Investment Trust Limited (Nitl), which rocketed from K830 to K3 551, a rise of 328 percent, making it the standout performer of the quarter.
In an interview on Thursday, Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa attributed the momentum to both fundamentals and hedging behaviour.
“The rise of the Masi in Q3 was mainly driven by strong company results, higher dividends, and high demand for a few quality shares. Many investors also moved into stocks to protect their money from inflation and currency weakness,” he said.
Makwakwa cautioned that not all gains were fundamental, saying: “This strong demand pushed prices up quickly, though in some cases it may also reflect speculative buying.”
The rally comes against a backdrop of high inflation rate currently at 28.2 percent and foreign exchange shortage and fiscal stress.
One apparent outlier in Q3 was Standard Bank plc, whose share price was split in July.
The bank subdivided its stock at a ratio of one to five, reducing the share price from K12 050 before the split to K2 410 afterwards.
The number of shares in issue for the bank expanded from 234.6 million to 1.17 billion.
