The 16-counter Malawi Stock Exchange (MSE) return on investment (RoI) in 2021 increased to 40.05 percent from 7.08 percent the year before, giving a better deal to shareholders of listed firms, analysts have said.
RoI measures the gain or loss on an investment relative to the amount of money invested, as such, the current figures mean shareholders earned more than they realised in the previous year.
In an interview yesterday, Bridgepath Capital Limited chief executive officer Emmanuel Chokani linked the development to a better market performance in the year.
He said: “This is a result of the recovery from a difficult 2020 for some companies as they navigated the different waves of Covid-19. There was a bit more certainty in 2021 compared to 2020 on this front.”
Chokani said overall, the market demonstrated some resilience as shown by some listed companies which grew their profits.
He said: “Other sectors had a good year as well as the telecoms and segments within the banking sector.
“On the other side, demand by pension funds for assets continues to grow with supply constraints of investable assets leading to some of these returns.”
Stockbrokers Malawi Limited chief executive officer Noel Kadzakumanja said the market registered good performance, a development that increased investors’ confidence.
In 2021, the MSE performance was mixed, a development that was anticipated due to the depressed economic environment in view of the Covid-19 pandemic.
In an earlier interview, MSE operations manager Kelline Kanyangala said the stock market performed reasonably well, considering the challenges that were experienced.