MSE return on indexup 8 percent—report

T

he 16-counter Malawi Stock Exchange (MSE) recorded a positive return on index in August, signalling investors’ confidence with the local bourse.

The monthly market report shows that the return on index increased by 8.6 percent in August from 6.52 percent in  the previous month.

The report further shows that the share price increases in National Bank of Malawi plc, FDH Bank plc, Old Mutual Malawi plc, TNM plc and Standard Bank plc outweighed the share price losses in nine companies during the month.

Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa described the performance as an indicator of investors’ optimism driven by companies’ expectations  of good performance.

He said: “Additionally, there is renewed hope for recovery among stocks that were impacted by last year’s 44 percent kwacha devaluation, with investors betting that the remaining months of the year will avoid further currency shocks.

“The belief that these companies are now on a recovery path has increased demand, pushing share prices higher.”

Makwakwa said the anticipated strong corporate performance is likely to sustain the recent upward momentum, adding that although some volatility is expected, the general trend should remain positive as long as these fundamentals hold.

For instance, TNM plc share price which dropped in recent months following losses in 2023 due to the kwacha devaluation rebounded during the month, gaining 9.4 percent from K16.31 to K18  per share following a trading statement which indicated that its profit after-tax will rise by 200 percent in the first half of this year.

In its trading statement, TNM plc said that “after further reviews, profit after tax for the half-year ending June 30 2024 is expected to be between K2.1 billion and K2.3 billion due to improvements in revenues”.

“This represents an increase of between 181 percent and 201 percent from the previous corresponding period ended June 30 2023 when the company reported a profit after-tax of K780 million,” reads the trading statement in part.

MSE chief operating officer Kelline Kondowe said in an interview yesterday that although trading activity has remained low for the better part of the year compared to last year, investors are still getting returns from their investment.

She said: “When compared to last year, the market has slowed down in terms of both returns as well as activity on the market.

“However, we are happy to see that investors are still earning positive returns on the market.”

In a separate interview, Minority Shareholders Association of Listed Companies secretary general Frank Harawa expects the market to be more active in the second half,  saying the August positive return on index was expected.

He said: “Although the market started badly in 2024 with most stocks losing value, we have seen improvements.

“This is a fair performance. Especially with companies such as TNM who are now on a recovery note, we believe the market remains profitable and in a position to finish strongly in the remaining months of the year.”n