The attractive money market rates seem to be taking a toll on the 14-counter Malawi Stock Exchange (MSE) evidenced by subdued performance on the local shares market which closed flat last week.
The lucklustre performance resulted in only two counters recording trading activity with a combined 19 328 shares changing hands, but no share price gain, raising a paltry K619 440 ($ 1 978.35) in three deals, according to a weekly market report.
In contrast, the week before, the market transacted 5.4 million shares raising K93.8 million ($302 040) in 18 deals.
Last week, Illovo Sugar (Malawi) Limited with its share price stuck at K150 transacted 2 588 while Nico Holdings Limited had 16 800 shares changing hands and its share price closing at K14.30.
With this performance, the Malawi All Share Indexâ€”the overall measure of market performanceâ€”remained steady on account of no movement in both the Domestic Share Index and Foreign Share Index.
Analysts have said since the Reserve Bank of Malawi (RBM) raise the bank rateâ€”the rate at which commercial banks borrow from the central bankâ€”the money market rates have been attracting investors shifting their attention from the stock market.
MSE operations manager John Kamanga said there is indeed a decrease in the appetite [by investors] on the stock market.
â€œInvestors are being attracted by the shorter gains on the money market,â€ he said.