Sunbird Tourism Limited and National Investment Trust Limited (Nitl) gained in share prices last week, pushing up the local bourse’s two indices, the indicative Malawi All Share Index (Masi) and the domestic share index.
But despite not gaining in value, Standard Bank exhibited notable demand for its shares, according to market analysts, largely because of the bonus share issue—an offer of additional shares to existing shareholders based on the number of shares that the shareholder already owns at a price of K359 per share.
Standard Bank has adequate distributable reserves of K19.96 billion to meet the Reserve Bank of Malawi (RBM) adjusted minimum capital requirement for all the country’s banks pegged at K2 billion (an equivalent of $5 million) from K850 million.
“This option [bonus issue] would not require shareholders to pay for additional shares as bonus shares are allotted by capitalising the company’s reserves and surplus,” said the bank in a statement last week.
In the week, on the back of 20 000 shares changing hand, Nitl, a collective investment scheme, gained 0.1 percent to close the week at K31.54 per share whereas Sunbird’s share price surged by 0.6 percent to K7.55 per share.
Analysts have explained that Sunbird’s gain is due to the hotel chain’s profit which jumped by 162 percent to K457 million in the year ended December 2013, an issue that attracted investors.
A total volume of 9.4 million shares were transacted, raising K35.23 million in 24 deals, up from last week K16 million in 19 deals.