Malawi Stock Exchange (MSE)-listed counters have collectively paid out K68 billion in dividends to their shareholders in the past financil year, a 47.8 percent jump from K46 billion paid out in 2019.
Data compiled by the local shares market shows that stocks in the telecommunications and banking sectors were the highest paying in terms of dividends per share to their shareholders.
In an interview on Monday, Minority Shareholders Association of Malawi secretary general Frank Harawa, while admitting that companies have had a tough time to remain afloat, blamed some companies for simply not honouring dividend payouts.
He said: “Save for telecommunications and banks which have paid out dividends in huge sums due to their profit records other companies have not paid out dividends while others have [dome so] in small amounts.
“Dividends are very crucial for us shareholders because they are the one gain we bank on as returns from out investments. Most shareholders count on these as a source of income, particularly now when Covid-19 has eaten into incomes for many Malawians.”
According to the data, Airtel Malawi plc was the highest paying counter by volume with data showing it paid out a dividend of K23.1 billion at K2 per share, a jump compared to 2019 when it paid out K13.75 billion at K1.25 per share.
The telecommunications company was followed by National Bank of Malawi plc and Standard Bank plc which paid out K12.99 billion at K27.84 per share and K10.49 billion at K44.74 per share, up from K8.32 billion at K17.82 per share and K7.10 billion at K30.26 per share, respectively.
The data shows that TNM plc was fourth as it paid out K4 billion at K0.40 per share. TNM plc last year paid out K7.53 billion at K0.75 per share.
MSE operations manager Kelline Kanyangala said through the dividend payouts, the local bourse is playing one of its key role of reducing income inequalities in Malawi.
She said: “Currently, there is a huge gap between those who earn more and those who earn less. By providing the public with opportunities to invest in profitable businesses, we would like to open up participation in income generating activities to everyone who would otherwise not be able to be part of such businesses.
“As these listed companies make profits and declare dividends, these dividends go to investors as seen from the statistics given.”
Kanyangala added that the dividends are just one aspect of the benefits earned in investing on the market stating that as the company performs well, the share price also rises over time and shareholders can make gains by selling the shares at a higher price than the buying price.
“If someone had invested K10 000 in each of the 14 domestic counters at the point of the initial public offer, their portfolio would now be worth K6.4 million. If they strategically selected their shares, it would even be more. And this by the way excludes the dividends received,” she said.
MSE performance was, however, generally mixed in 2020 where the market registered a positive return on index despite the decline in values.
According to the MSE annual report, daily average share trades exhibited positive strides where the market registered an average daily volume of 6 633 847 shares compared to 5 620 362 shares traded in the corresponding period 2019, reflecting an increase of 18.03 percent.
The average daily turnover for the year 2020 was K165.66 million compared to K186.97 million for the corresponding period 2019, reflecting a decrease of –11.40 percent.