Three counters, Nico Holdings Limited, Press Corporation Limited (PCL) and Sunbird, last week registered share price losses driven by desperate sellers and reaction to half year results, according to a market analyst.
The Malawi All Share Index (Masi)—the overall measure of market performance—dropped by 19.02 points to close the week at 5 907.42 points as a consequence of share price losses in Nico Holdings by 70 tambala to K14.30 from K15.00, PCL by K3.00 from K188.00 to K185.00 and hotel chain Sunbird by four tambala to K6.50 from K6.54 the week before.
However, the Foreign Share Index (FSI), anchored by counters Old Mutual plc (OML) climbed by 62.84 points to 754.12 points because of a share price gain by K50 to K600 from K550 the previous week.
Market analyst Nelson Mkwende, who is also acting manager at FDH Stockbrokers Limited, said on Sunday activity on the stock market was generally driven by foreign investors who took positions in Nico and PCL.
“The downward trend on Nico may be justifiable when we consider the half year results,†explained Mkwende.
He noted that PCL’s downward trend is somewhat a result of ‘desperate selling’ because looking at the fundamentals of the stock, it is not expected to take such a path, but the future is still good for the counter.
On Sunbird, which released better-than expected results last week, Mkwende said the counter has also been hit by desperate sellers for some time, especially because the hotel chain has not been active since the dawn of 2012.
“This supply at discount prices is the one that triggered a downward movement last week, despite the hotel chain releasing half year results which look somewhat promising,†he said.
But he observed that the huge demand for OML shares was the key driver for its surge, arguing that the market has lots of buyers of the stock, but most investors have taken what is called a ‘buy and hold’ strategy on it; hence, the deviant supply.
The 14-counter market recorded trading activity in eight counters; FMB, Nation Bank of Malawi, Nico Holdings, PCL, Real Insurance Company (Malawi) Limited, Standard Bank and OML with 5.4 million shares changing hands raising K93.8 million ($302 040) in 18 deals.
