Standard Bank plc says it is considering a subdivision of its shares on the 16-counter Malawi
Stock Exchange (MSE), in a move stock market analysts say will make the share price affordable to low- income investors.
The subdivision of shares, also known as share split, could offer an opportunity to investors to buy part of the stock at affordable price without altering the actual share value and it happens
when the share price increases significantly. In a cautionary statement on Tuesday, Standard Bank plc company secretary Norah Nsanja said the subdivision will improve the marketability of its shares by making the stocks affordable.
Reads part of the cautionary statement: “The proposed subdivision of shares will not alter any shareholder’s percentage ownership interest in the company’s issued shares and is intended to increase the liquidity and marketability of the company’s shares.” However, the bank , however, said the proposed
transaction is subject to regulatory approvals , including shareholder approval.
“Accordingly, shareholders are urged to exercise caution and consult professional advisers before dealing with
the company’s shares until a formal announcement is made regarding the final terms and implementation
of the transaction,” reads the statement. MSE chief executive officer John Robson Kamanga, in an interview on Tuesday, described the move as a simplified way of making the Standard Bank stock, which is currently selling at K9 500 per share, affordable.
“This is the best option of making the high-valued shares at least affordable to low-income earners and it can also help in terms of liquidityon Standard Bank shares,” he said. In a separate interview, Stock market investor
and finance expert Brian Kampanje on Tuesday welcomed the move, saying it enable shareholders to cash in part of their stocks without losing out on shareholding while also giving an opportunity for others to invest in Standard Bank shares.
He said: “This will enable minority investors earn substantial income while holding sizeable number of
shares. “This will have a positive impact on the Malawi Stock Exchange as the number of issued shares rises and so will
those changing hands. With neither no initial dilution of shareholding nor requirement to pump in additional funds like in the case of rights issue, minority investors will be better off.” Meanwhile, Minority Shareholders Association of
Listed Companies Central Region chairperson Purity Chitalo said in an interview on Tuesday the move is what the grouping has been lobbying for some time. He said: “A share split will improve the availability
of Standard bank shares on MSE and equally preserve the value of shareholders already owned shares in this
company. “We are excited that Standard Bank has acted accordingly.” Standard Bank, one of the blue chips on the local
bourse, is most valued stock on MSE at K9 500 followed by National Bank at K6 200 and Press Corporation plc at K3 802.21
