Stock market analyst calls for incentives to boost listings

A stock market analyst has called on regulators to introduce incentives aimed at encouraging more companies to list on the Malawi Stock Exchange (MSE).

Speaking to Capital FM, Kondwani Makwakwa, an analyst at Stockbrokers Malawi Limited, observed that while the MSE delivered a positive performance in the 2024 fiscal year, it remains stagnant, closing the year with the same 16 counters.

Highlighting the market’s progress, Makwakwa cited; “Since January, we have seen various developments in the market. Currently, five companies boast a combined market value of K1 trillion.”

Reflecting on the year’s performance, Makwakwa described the MSE’s trajectory as a slow start followed by a strong rebound.

“The Malawi Stock Exchange began 2024 at a slow pace compared to the extraordinary performance of 2023. However, the market has picked up, which is a positive sign,” he noted.
Key sectors, particularly telecommunications and financial services, have driven the market’s recovery.

“We have observed significant strides, especially in the telecommunications industry. For instance, Airtel Malawi’s share price rose from K44 to around K100, while TNM shares increased from K14 to approximately K26,” he added.

In the week ending December 6, 2024, the market demonstrated bullish trends. The Malawi All Share Index (MASI) climbed to 165,159.24 points, up from 163,189.14 points the previous week.

“This rise in share prices has pushed the MASI upward, delivering a positive return for the overall market,” Makwakwa explained.

Despite these gains, he stressed the importance of diversifying the market by increasing the number of listed companies.

“The MSE remains at 16 counters. To enhance market activity, regulators and the government should consider introducing incentives like tax breaks or other motivating factors to attract new listings,” he suggested.

Makwakwa also emphasized the need for investor education to improve participation and understanding of the stock market’s benefits.

“When you invest in shares, your return comes in two forms: dividends, which are a share of profits, and capital gains realized as share prices increase,” he explained.