Stock market helps edge Malawi’s economic performance

 Stock market helps edge Malawi’s economic performance

Stock market helps edge Malawi’s economic performance.

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Malawi’s economic growth, largely buoyed by the agriculture sector, has witnessed an extra push from the financial sector’s stock market as business productivity increased following capital investment support from equity and debt access.

Kelline Kanyangala, Malawi Stock Exchange (MSE) operations manager, says from the listed 16 companies, the local bourse has managed to provide liquidity to ensure companies have adequate resources for investments to support the national economy.

“Since its inception, the stock market has assisted in raising about MK85 Billion for companies through equity listings,” she says adding that at the of the 2021 first quarter, “the nominal value of listed debt instruments stood at MK825 Billion.”

She notes that in terms of returns for investors, the stock market generally outperforms the money market.

“The compound annual growth return on capital gains can be estimated at around 19 per cent and grows further when dividends are incorporated,” she says explaining that market capitalization in the first quarter stood at MK1.770 Trillion.

During the 2021 first quarter, the MSE registered a 0.53 percent share index score, -3.56 percent score higher than the previous year. However, the bourse registered a decline of 32.2 million in the just ended quarter from the 70.8 million shares traded during the same period in 2020.

Kanyangala highlights that in order to protect the country’s liberalized market from the effects of the Covid-19 pandemic, the bourse restricts upward or downward price movements within a 16 percent band each trading day.

Meanwhile, to spur enough growth propel the country’s economy, the MSE has put in place accommodative measures that will see it improve its trading values and volumes, listed companies and debt instruments.

The Malawi stock market is comprised of 16 listed players in the agriculture, real estate, banking, insurance, telecommunication and the hospitality industries. It provides for both primary and secondary markets. MSE (2017).

The market currently has three members: Stockbrokers Malawi Limited, Cedar Capital, Continental Capital Limited and Alliance Stockbrokers Limited. It operates on three platforms: the main board, which provides services principally to large and well-established companies; the alternate market, which provides services to small and medium enterprises; and the debt market which assists companies in borrowing funds

Charles Mkula

Charles Mkula has over 15 years of working as a Malawian newsroom news reporter and editor as well as a freelance journalist for a number of international news outlets, Charles Mkula has worked as a Public Relations Officer for a Malawi/Germany urban development project. He co-founded Hyphen Media Institute, a platform for sharing information generated from policy debate and advocacy activities. Charles likes reading, writing, traveling, exercises, making friends, listening to music, watching TV, documentaries and cartoons.

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