Malawi Stock Exchange (MSE) moved into the negative territory in November, registering a negative return on index of 3.74 percent, a monthly report shows.
This is despite registering an increase in both volume and value of traded shares.
The report shows that the Malawi All Share Index (Masi)—the overall measure of local shares market performance—dropped from 30 344.49 points in October to 29 215.33 points in November this year.
MSE has attributed the negative return on index on price losses in two counters, namely Illovo Sugar (Malawi) plc by 27.14 percent and FMB Capital Holdings (FMBCH) by 6.25 percent.
During the period under review, the market transacted a total of 342.6 million shares, raising K7 billion (about $10.1 million) in 307 trades, a rise from 185.4 million shares valued at K2.4 billion (about $3.4 million) in 243 trades in October.
Reads the report in part: “The average daily turnover for November was K333.9 million compared to K118.8 million in October, reflecting an increase of 181.01 percent.”
Market analysts previously said the sluggish MSE performance is expected, particularly in an environment where interest rates are declining.
The analysts argue that declining interest rates have impacted 14-counter market because investors opt for other investment avenues, leaving demand for shares for most of the companies at a minimal.
But MSE chief executive officer John Kamanga in an interview said this development should not be a cause for concern, adding that it is a normal occurrence that the market experiences from time to time.
“At this time of the year, people panic with a number of things such as preparing for the agriculture season while others seek fast cash to use for school fees. This pushes investors to offload shares at any given price,” he said.