Stock prices of some counters in the banking and real estate sectors have picked up in anticipation of positive year-end earnings, a stockbroking firm has said.
An analysis by Cedar Capital Limited shows that four counters—National Bank of Malawi (NBM) plc and NBS Bank plc, Mpico Limited plc and Icon Properties plc—have registered highest share price gains.
The analysis shows that over the past year, NBM share price rose by 58.12 percent to K525 from K332 in 2018 while NBS Bank plc registered a 35 increase in share price to K13.50 from K10.
On the other hand, Mpico Limited plc and Icon share prices gained by 47.95 percent and 20 percent, respectively, to K19.53 from K13.20 and K10.50 from K8.75.
During the same period, according to the analysis, dual-listed Press Corporation plc also registered a share price gain of 22.81 percent to K1 400 from K1 140 in 2018.
Cedar Capital has attributed the share price gain in NBM to a cautionary statement published in the fourth quarter on the possible regional acquisition.
On Mpico, the firm observes that the counter did not retrace when the kwacha clawed back all the losses to close almost flat for the year.
Says the firm: “For NBS Bank, we observe that the bank’s share price appreciated three percent as its turnaround continued to gain momentum.
“We are, thus, bullish on the bank and have it as one of the top stock picks.”
But for PCL, Cedar Capital said the conglomerate has largely rallied on renewed interest from a foreign fund; hence, the pickup in share price.
However, PCL expects its profit after-tax for the year ended December 31 2019 to be lower than the corresponding period by more than 35 percent.
PCL has attributed this to the one-off gain of K6.2 billion emanating from a share subscription transaction involving Open Connect Limited.
In an interview, Minority Shareholders Association of Malawi secretary general Frank Harawa said the rise in share prices and positive earnings prospects give shareholders the confidence to remain on the market as their capital gains improve.
“When share prices move up, we rejoice because this means we would have more cash should we want to dispose our shares whose money can be used for other meaningful purposes like buying other shares within the market,” he said. MSE operations manager Kelline Kanyangala is upbeat that 2020 will be a good year for the 14-counter MSE.