Some Malawi Stock Exchange (MSE)-listed firms expect their profits for the period ending December 31 2017 to be higher than the previous corresponding period.
In published trading statements yesterday, hotel chain Sunbird Tourism Plc and integrated information and communications technology and Internet service provider TNM Plc indicated that they are expecting their profits to exceed the previous corresponding period by more than 70 and 60 percent respectively.
During the same period last year, Sunbird profit after tax increased by 31 percent from K1.022 billion in 2015 to K1.33 billion in 2016 while TNM Plc posted after-tax profit of K8.206 billion, an increase of 52 percent from K 5.414 billion in 2015.
The listed counters said the information on which the trading statement is based has not been reviewed by their auditors, but the companies will in due course provide another published audited financial results.
MSE listings requirements require listed counters to publish a trading statement as soon as there is a reasonable degree of certainty that the financial statements for the period to be reported upon next will differ by at least 20 percent from the financial results for the previous reporting period.
In the year under review, the country’s economic environment remained largely stable with interest and inflation rates as well as the kwacha remaining stable.
In an interview, African Alliance Securities chief executive officer Armstrong Kamphoni said the stock market is largely driven by performance of listed companies, stressing that the current environment helps companies to perform better.
“With the current economic environment, the cost of financing is low as such almost every company will need finance and they access cheaper finance because of the low interest rates. Exchange rates are also a huge factor in Malawi where most companies are affected by them when they are volatile which affects profitability and planning.
“All these lead to better performing companies and better performing companies lead to better performance of share price on the stock market. Generally, share prices have fared well this far and we see that this year has been good,” he said.
But MSE operations manager Esnat Chilije said until all companies produce their financials, it would be difficult to cite specific reasons behind the performance of the listed counters.
However, in an earlier interview she said the decline in inflation and interest rates as well as the stabilisation of the exchange rate has created conducive environment for business operation and also attracting investors to the capital market.
Despite some counters projecting higher profits, Standard Bank Plc says it is expecting its profits for the year ending December 31 to be below 30 percent