Money market slows local shares market
Yields on money market, a sector for financial instruments with high liquidity and short maturities, has slowed down the performance of Malawi Stock Exchange (MSE), the local bourse’s chief operations officer John Kamanga has confirmed.
With the money market yields, particularly treasury bills (T-bills), hovering around 27 percent since December last year, returns on the stock market are way below, at around 10 percent, a situation that an analyst says has influenced a shift in investors focus.
Kamanga said yesterday that although in January trading is usually slow, the stock market has also been affected by a shift to the money market, which is offering higher returns.
The January 2015 MSE report shows that the stock market registered a decrease in traded value and volume compared to the previous month. Compared to January 2014, the traded value and volume rose by 82.67 percent and 118.3 percent respectively.
According to MSE, 13 million shares were transacted in January 2015, raising K306.5 million in 115 trades.
In December 2014, the market transacted a total of 26 million shares at a value of K397 million in 152 trades, reflecting a 49.6 percent decrease in terms of share volume and 22.91 percent decrease in share value.
“In January, there is usually low activity at the stock market. However, the performance is picking up and we hope the stock market will improve due to the annual financial statements that listed companies will soon start publishing.
“Most of the companies have achieved a 20 percent profit and we believe that this will attract investors into the stock market,” said Kamanga.
