The local bourse, the Malawi Stock Exchange (MSE), was bullish in May 2017 as it registered a positive return on investment of 2.43 percent from April or 16.92 percent same period last year.
According to MSE’s May Monthly Market Performance report released on Monday, the positive return on index is reflected in the upward movement of the Malawi All Share Index (Masi) which inched upwards from 15 203.97 points registered in April to 15 573.68 points registered in May.
The market transacted a total of 71.8 million shares at K1.3 billion in 97 trades whereas in the corresponding period, the market traded 10.1 million shares at K788 million in 76 trades.
Reads the report in part: “Daily average share trades exhibited similar trends where the market registered an average daily volume of 3 421 88 shares compared to 483 812 shares traded last year.
“Average daily turnover for May was K63.9 million compared to K37.5 million in April reflecting an increase of 70.42 percent.”
According to the report, five counters namely TNM, FMB, Nico, Sunbird and Mpico were the top five traded stocks by volume in May.
In terms of value, FMB, Sunbird, TNM, Nico and Illovo were the top five traded stocks in the same period.
Market capitalisation on the other hand also decreased from K622 115.40 million as at January 2016 to K577 621 .92 million on December at the close of 2016.
In terms of turnover velocity as measured by the ratio of total by value of trades to market capitalisation— an indicator of the liquidity of asset traded on the market— was recorded at o.20 percent, higher than 0.12 percent registered in April.
The ratio of total value of trades to gross domestic product (GDP) recorded a liquidity level of 0.03 percent in May while in April the ratio stood at 0.02 percent.
In an interview with Business News last week, MSE chief operations officer Esnat Chilije was upbeat that the local market is set for strong performance on the back of a stabilising macroeconomic environment.
She said it’s time for the private sector to take advantage of the stock market as a capital raising tool as current economic underpinnings are good for MSE as well as investors.
“We feel that with the economy picking up, issues of profit will not be a problem. The stock exchange is there for businesses so that they benefit from it. We know that the private sector plays an important role in the economy but to do so they need access to the right capital,” she said.