The Covid-19 pandemic has halved traded shares on the Malawi Stock Exchange (MSE) in the second quarter despite the local bourse retaining its bullish sentiments during the review period, investment firm Alliance Capital Limited has said.
In its published second quarter quarterly economic review, the firm said Covid-19 pandemic has had an impact on the MSE with a total of K6.75 billion shares been traded compared to K15.13 billion traded in the same period in 2019.
However, the market still retained its bullish sentiments during the period under review, registering a 2.09 percent return on the market index despite that it was lower than the 9.71 percent recorded in the previous year same period.
This, the firm said, is due to the share price gains registered by NBS plc (21.88 percent), Airtel plc (14.29 percent), Icon Properties plc (8.67 percent), Standard Bank plc (8.22 percent) and NBM plc (1.85percent ) which were enough to offset share price losses registered by FMBCH plc (25.03 percent), Old Mutual plc (12 percent), TNM plc (2.35 percent), Nico Holdings plc (0.14 percent), Mpico plc (0.08 percent), Press Corporation plc (0.02 percent), National Investment Trust plc (0.01 percent) and Sunbird Tourism plc (0.01 percent), resulting into an upward movement of the Malawi All Share Index (Masi).
Reads the review in part: “The Domestic Share index inched upwards by 4.06 percent whilst the Foreign Share Index fell by negative 23.27 percent.
“The Malawi All Share Index touched 29 784 points on 29 June 2020, the highest level since 14 January 2020.
Meanwhile, published trading statements for seven out of the 15 listed firms indicate that only two firms are poised for higher returns.
According to the statements, Airtel Malawi plc and NBS plc expects their profits after-tax for the half-year ending June 30 2020 to be approximately 300 percent and 50 percent higher, respectively, than the profit reported in the previous corresponding period.
On the other hand, tourism operators Blantyre Hotels plc and Sunbird Tourism plc expects their profit after-tax for the half-year ending March 31 and June 30, to be lower than the previous corresponding period by more than 50 percent and 150 percent, respectively.
Integrated information and communication technology services provider Telekom Networks Malawi plc and National Investment Trust plc also expects their profit after-tax for the half-year ending June 2020 to be at least 20 percent and 75 percent lower than the previous corresponding period, respectively.
MSE chief executive officer John Kamanga said currently, the market is dry as investors are on ‘a-wait-and-see’ mode which has seen the return on investment stagnating.
“Few companies have registered gains but many are stagnant and some have registered a decline in prices,” he added.