The share price for property development and management firm Mpico jumped by 12.24 percent last week to K18.52.
This has raised confidence in the counter among investors on the Malawi Stock Exchange (MSE).
A daily market report published by MSE on Thursday shows that the development also culminated in a K2.02 share price increase for Mpico—from the opening price of K16.50 on the day.
This follows Old Mutual’s relinquishing of 404,032,686 of its stake in Mpico, for K7.48 billion, to Public Service Pension Trust Fund (PSPTF).
A Withdrawal of Cautionary Announcement and Notice of Substantial Acquisition published by Mpico on Monday showed that PSPTF now holds 17.58 percent in the company.
Currently, the share composition for Mpico is that Old Mutual Life Assurance Company Malawi Limited owns 42.98 percent shares, the general public holds 21.55 percent, Public Service Pension Trust Fund has 19.46 percent, Old Mutual Malawi Limited now holds 11 percent while Lincoln Investments Limited owns 5.01 percent.
Minority Shareholders Association of Listed Companies Central Region Chapter Chairperson Purity Paschal Chitalo said such positive news may influence the counter’s share prices.
“The sale of Old Mutual’s part ownership will provide a cash injection to the company to pursue its other interests such as business expansion or investment in new technology but the acquisition of more share in Mpico by PSPTF is a demonstration of the counter’s attractiveness and the level of confidence people and institutions have in the market,” Chitalo said.
MSE Chief Operating Officer Keline Kondowe said the stock market operates in a disclosure regime, which means transparency of all substantial transactions on the market is key to ensuring investors are well informed on all developments.
She said the transaction was a normal secondary market transaction between two investors.
However, due to the size of the same, it requires to be disclosed especially given that it involves changes in holding of a significant shareholder.
“The price of a share is dependent on a lot of factors, key of which is investor sentiments and prospects on future performance. So far, we have seen the share price register some capital gains following the release of the cautionary statements.
“Our view is that, in the long run, the stock market provides good returns for investors and, so, we call upon the public to participate in activities in this market,” Kondowe said.
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