Despite the quickening of the Malawi Stock Exchange (MSE) in 2023, the dawn of this year came with jitters and doubts among investors over sustainability.
This was partly due to the 44 percent devaluation of the Kwacha in November last year.
Financial market experts and economists were quick to indicate that the impact of the devaluation would spread across the months that followed.
However, the stock market demonstrated resilience from the shock and maintained a growth trajectory in 2024.
For example, while 2023 saw a total of 612.18 million shares traded, according to the 2023 Annual Market Performance Report, 2024 showed stronger momentum with 618.02 million shares traded in November alone.
Furthermore, total market capitalisation has grown from K5.99 trillion ($3.56 billion) in December 2023 to K8.81 trillion ($5.08 billion) by November 2024, representing a 47 percent increase.
The Malawi All Share Index (Masi) continued its bullish trend from 2023, when it closed at 110,951.21 points representing a 78.85 percent annual return, to register 163,189.14 points by November 2024. This represents a 47 percent increase.
This indicates sustained market confidence despite various macroeconomic challenges that faced the country in the year gone by.
Looking at the MSE’s published market reports for the third quarter and November, it is evident that, this year, the market has grown tremendously.
For instance, traded volumes showed significant growth throughout 2024, with a remarkable spike in November when the market transacted 618.02 million shares, up 410.26 percent from October’s 121.12 million shares
The total value traded in November reached K35.8 billion (or $20.64 million), compared to K19.38 billion in October, representing an 84.72 percent increase. Besides that, daily average trading volumes increased dramatically from 5.51 million shares in October to 30.90 million shares in November.
The Masi also showed consistent growth rising from 121,101.77 points in July to 142,686.97 points by September representing a 17.82 percent increase and increased further to 147,216.86 points in October before reaching 163,189.14 points in November, illuminating a 10.85 percent month-on-month gain.
There were other exciting developments on the market in 2024 such as the rights issue of Blantyre Hotels Limited plc. This is a good sign that listed companies are looking forward to using the market to raise capital for substantial growth.
Having been fully underwritten, BHL is guaranteed of completing its Lilongwe hotel project.
There is also exciting news that the market may register new companies and increase the number of counters.
Earlier this year, representatives of PressCane Limited indicated that the company was contemplating listing on the bourse very soon.
This means that the depth and breadth of the equity instruments is going to increase upon successful listing on the MSE.
Furthermore, some six firms including; Agro- Input Supplies Limited, Combine Cargo Limited, Nagowa Finance Limited, WealthNet Finance Public Limited Company, Ziweto Enterprises Limited and Unitech Technologies Limited joined the Mzinga Incubation Programme which the MSE rolled out in 2024.
The programme aims to provide handholding support to companies that would like to raise long term capital through listing on the MSE.
This means that these companies are expected to eventually list on the MSE, growing the market further.
The decree by the Government of Malawi that all large-scale mining companies must list on the MSE is another exciting thing that came out in 2024. This will be good for the market and will attract regional and global investors to participate on the local bourse.
One of the stock market investors, who is also Director for Minority Shareholders Association of Listed Companies (Misalico), Brian Kampanje, notes that there was massive erosion of market capitalization in the telecommunication sector but it has since bounced back.
In an interview, Kampanje said this shows the resilience which the MSE has had during the year which also cultivates investor’s confidence.
He also noted that the banking sector continued to do well witnessed by impressive dividends licted banks continue to give out which also excites the market.
However, Kampanje worried about few shares in the public hands from the sector calling on two top banks listed on the market to consider increasing the number of shares through either share split or rights issue to allow more Malawians a chance to have ownership in that lucrative sector.
“Nico registered a sharp increase in the market share towards the end of 2024 is a positive development as its market share price has been grossly undervalued but it has an impressive asset base. The property investment sector saw some growth in 2024 thanks to the substantial acquisition of shares in Mpico by the Public Service Pension Fund.
“Both Mpico and Icon counters benefitted from that. It is pleasing to note that the Public Service Pension Fund is becoming a dominant force on the MSE and that will increase the vibrancy and liquidity of the market as more shares can be offered to institutional investors,” Kampanje said.
He was quick to indicate that the MSE activities have been hampered by slow processes experienced with Stockbrokers as it takes a long time for a retail investor to open an account which he claimed puts off some potential investors with huge cash to the detriment of the MSE.
These are but just a few developments on the MSE in 2024. All in all, 2024 marked a year of consolidation and growth for the MSE, building on the momentum from 2023.
The market demonstrated remarkable resilience post-devaluation, with significant increases in both trading activity and market capitalisation.
The continued upward trajectory of the Masi and broad-based stock appreciation suggest a maturing market with improving fundamentals, despite challenging macroeconomic conditions.
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