FDH Bank plc share price jumped by 50 percent to trade at K15 per share on the first day of listing, becoming the fifth bank listed on the Malawi Stock Exchange (MSE).
The share price climbed from an Initial Public Offer (IPO) price of K10 per share.
Stock market analysts have described the listing of FDH Bank, which has increased the number of counters on the market to 16, as a significant feat which will provide diversified products on the local shares market and a valuable venture for shareholders.
The listing, which is part of a contractual obligation with the Malawi Government as part of acquisition of formerly wholly government-owned Malawi Savings Bank in 2015, followed a 2.1 percent oversubscription of the IPO in which FDH Bank raised K13.8 billion.
In an interview on the sidelines of the listing in Blantyre yesterday witnessed by industry captains and the Reserve Bank of Malawi director of capital markets Mark Lungu, FDH Bank managing director Elias Ngalande said they are proud to have finally listed on the MSE.
He said: “As FDH Bank, we are glad to have reignited the market that now has access to the wider investing community whenever we want to raise capital.
“We now look forward to doing even more in future as we continue to seek investment opportunities that will benefit the bank, our stakeholders and Malawi at large.”
MSE chief executive officer John Kamanga said in an interview that the listing is significant to the local bourse and FDH Bank as it gives the company numerous advantages.
“One of the objectives of the MSE is to distribute wealth to all Malawians and the coming in of FDH Bank on the MSE has enabled retail investors who would not have managed to establish a bank on their own to be part of the bank,” he said.
By 10:52am yesterday, FDH Bank had traded 905 000 shares in five trades at K15 per share.
Investment advisory firm EY, lead advisers of the transaction, said the listing has broadened assets that investors can buy into.
Said EY country manager Shiraz Yusuf: “We are proud to have seen a successful IPO which signifies investor confidence in the bank.
“This was done under difficult circumstances where the economy has generally slowed down due to the Covid-19 pandemic.”
On his part, Minority Shareholders Association of Malawi general secretary Frank Harawa described the listing as a milestone.
“Reading from the reaction of the market where the share price has risen by K5 from the initial price offer of K10, we have high hopes for the bank as a profitable venture,” he said.
The composition of FDH Bank shareholding is as follows; FDH Financial Holdings Limited, the parent company of FDH Bank, has 74.05 percent, Malawi Government 4.75 percent, MSB Employee Share Ownership Scheme 1.2 percent and the public 20 percent.
During IPO, 1.38 billion applications were allotted shares. Of the amount held by the public 2 807 comprise retail investors while 41 are institutional investors, including preference shareholders.
FDH Bank plc was incorporated on May 17 2007 and was re-registered as a company on June 3 2020.