Minority shareholders of Malawi Stock Exchange (MSE)-listed firms have expressed worry over share value losses on most counters in 2020, saying this has left them with less value from their investment.
An MSE market analysis by investment and advisory firm Bridgepath Capital indicates that share prices for FMBCH, TNM, Sunbird and Illovo have declined by 70 percent, 26 percent, 11 percent and 47 percent in that order.
In a interview on Friday Minority Shareholders Association of Malawi secretary general Frank Harawa said the market has faced some hurdles in view of the Covid-19 pandemic, a development that has affected share prices and cost shareholders.
“We have come from an environment where the political impasse dented the business environment and the Covid-19 this year has just worsened things.
“We have seen some people selling their shares in fear of what might happen on the market, a development which has led to share price shake ups. Suffice to say most of the share price declines are on account specific reasons in particular loss-making records for the companies,” he said.
With most shares on the MSE trading at about 20 percent below last year, Harawa said shareholders are particularly concerned with the declining capital gains.
“Most companies are at almost half of what they were trading last year, which is worrisome for us. This is a clear indication that this year will be another painful year for us the shareholders,” he said.
In the ending year, MSE performance has been sluggish, a development market analysts said was anticipated due to the poor operating environment.
In the first quarter (Q1) for instance, the shares market registered a negative return on investment of -3.56 percent.
The sluggish performance was seen in the downward movement of the Malawi All Share Index (Masi)—the overall measure of local shares market performance—from 30 252.20 points registered in January to 29 176.23 points in March, according to the market performance report for Q1.
In the second quarter (Q2), the market was bullish, registering a 2.09 percent return on the market index despite that was lower than the 9.71 percent recorded in the previous year same period.
But in the third quarter, the market was bearish, with most companies recording share price losses including FMBCH at 19.97 percent, TNM at 15.80 percent, Illovo at 14.81 percent, PCL at 3.98 percent, Mpico at 3.92 percent, Nico at 0.87 percent, NBS Bank at 0.31 percent and NITL percent at 0.01 percent.