Malawi Stock Exchange (MSE) has reviewed listing and trading requirements on the local shares market, a move meant to protect investors, maintain fair, orderly and efficient market, and facilitate capital formation.
The changes, among others, include review of clauses which were contradicting the provisions of the Financial Services Act and Companies Act and minimum capital requirements for listing and enforcement of the Listing Requirements.
Other reviews are on the listing of local shares market and trading practices to be in line with regional and international best practices on listing guidelines and with new International Financial Reporting Standards.
MSE operations manager Kelline Kanyangala in an interview said the listings requirements, which await Reserve Bank of Malawi (RBM) approval, are meant to be in line with provisions of the revised Acts and directives and with other stock exchanges in the region.
“The Companies Act 2013 as well as the Financial Services Act 2010 incorporated some new definitions and terms such that we also needed our Listings Requirements to be in line with.
“At the same time there were other provisions in the new Acts and Directives such as timelines for publication of financials that needed to be aligned as well,” she said.
According to Kanyangala, the revised listings requirements are also aimed to open up a door through which even companies listed in other countries could be dual listed on MSE.
However, Kanyangala could not mention new minimum capital requirements, saying provisions are still under the review process and will be communicated once final approvals are done.
She said: “Essentially our goal is to ensure that the minimum requirements are enough to safeguard investors but at the same time ensure they do not pose a hindrance to companies that would like to list.”
Currently, the minimum capital requirement for a company to list on the shares market is K500 million with at least 25 percent of the issued capital for which a listing is being sought offered o the public. The company is also required to have less than 30 million equity shares in issue.
In terms of harmonisation with other markets, she said the changes made are on a qualitative basis and not quantitative basis highlighting that the MSE is looking at issues to do with corporate governance and corporate disclosures being more enhanced and in line with peer exchanges within the region.
Indigenous Business Association of Malawi (Ibam) president Mike Mlombwa welcomed the development saying a number of local businesses have been skeptical to list on the shares market due to among others complex requirements and high capital requirements.
“Businesses do have the urge to list on the shares market as we are quite informed and aware that the MSE is the best option for raising cheap capital. Countrywide Car Hire has also been contemplating on doing the same.
“The process to list has however been thorny, especially, on the capital requirement. It is therefore pleasing to note that the MSE has considered to review some of these issues to make the market more attractive to companies,” he said.