FDH Bank has encouraged potential investors to buy shares in the bank, saying listing on the Malawi Stock Exchange (MSE) presents a rare investment opportunity in the banking sector.
The bank is offering 1.38 billion shares at K10 each during the initial public offer (IPO), which closes on July 17 2020. The shares represent 20 percent stake in the bank.
In an interview on the sidelines of a pre-listing cocktail in Blantyre on Tuesday, which was graced by FDH Financial Holdings Limited chairperson Noel Mkulichi and notable industry captains, FDH Bank managing director Elias Ngalande said the listing has a number of advantages to the investor.
He said: “We are delighted with the listing of our bank as it will accord many Malawians an opportunity to invest in this business and become part owners of this company.
“Investing in this bank is a wise idea because it would enable an investor to invest in the future of our own country.”
He said this far, ordinary Malawians who are the target of this offer, are buying the shares.
Yusuf Shiraz, country managing partner for EY, a tax and investment advisory firm, which is also the lead corporate advisor for the IPO, said the offer presents an opportunity to investors to be part of a growing bank.
He said at K10 per share, FDH Bank is giving potential investors a good offer.
“If you look at the price earnings ratio, the IPO has been priced in a manner that people who want to invest should be able to get a return,” said Shiraz.
One of the prospective investors, Sangwani Hara, who is also Tea Association of Malawi chairperson, said the listing is a huge opportunity for the investing public.
“It is interesting to see the prospects that the bank has for us as prospective investors. The profit growth is there and we are also expecting to be receiving dividends.
“We think the pricing at K10 per share is fair. The underlying assets are worth more than that which means if you are buying, you are already buying value,” he said.
FDH Bank announced its intention to list on the shares market on June 28 this year.
The listing on August 3 will enable the bank to comply with a contractual obligation with the Malawi Government as part of acquisition of wholly government owned Malawi Savings Bank in 2015.
The move will also help the bank to raise capital and allow existing shareholders to dispose part of their stake in the bank.