Issue 5, 2021 MSE Magazine 1 Members Stockbrokers Malawi Ltd Cedar Capital Ground Floor, NBM Tours 4th Floor, Livingstone Towers Corner Hannover Avenue Glyn Jones Road Henderson Street PO Box 3340, Blantyre PO Box 31180 Malawi Blantyre 3, Malawi Tel: (265) 1 831 995 Tel: (265) 1 822 803 [email protected] (265) 1 824 327 Fax: (265) 1 824 353 Email: [email protected] www.stockbrokersmalawi.com Continental Capital Limited Alliance Stockbrokers Ltd Ulimi House Old Air Malawi Building Blantyre Robins Road Malawi PO Box 510 Tel: (265) 1 821 300 Blantyre, Malawi (265) 1 753 840 Tel:(265) 1 830 704/5 Email: [email protected] [email protected] www.cdh-malawi.com www.alliancestockbrokersmw.com Non - Members Old Mutual Investment Group NBM Capital Old Mutual Building PO Box 945 PO Box 393 Blantyre Blantyre. Malawi Malawi +265 1 820 677 +265 1 820 622 [email protected] [email protected] NICO Asset Managers Continental Asset Management Chibisa House PO Box 1444 PO Box 3173 Blantyre Blantyre, Malawi Malawi +265 1 832 085 +265 1 821 300 [email protected] [email protected] Corporate Advisors CDH Investment Bank Standard Bank of Malawi Thoko Mkavea Enock Kondowe PO Box 1444, Blantyre PO Box 1111, Blantyre +265 1 821 300 +265 1 774 688 [email protected] [email protected] Deloitte NICO Asset Managers Nkondola Uka PO Box 3173 PO Box 187 Blantyre, Malawi Blantyre, Malawi +265 1 832 085 +265 1 820 277 [email protected] [email protected] Old Mutual Investment Group EY Mark Mikwamba Chiwemi Chihana PO Box 393 Apex House, Kidney Crescent Blantyre , Malawi PO Box 530 +265 1 820 677 Blantyre, Malawi +265 1 876 476 / 870 367 [email protected] My Bucks Corporation Bridgepath Capital Mwai House Emmanuel Chokani PO Box 31567 1st Floor, Development House Lilongwe 3, Malawi Blantyre, Malawi. +265 1 772 500 +265 1 828 355 [email protected] [email protected] [email protected] NBM Capital Markets FDH Financial Holdings PO Box 945 PO Box 512 Blantyre, Malawi Blantyre +265 1 820 622 [email protected] [email protected] 2 MSE Magazine Issue 5 2021 Issue 5, 2021 CONTENTS 06 THE ROLE OF THE STOCK EXCHANGE IN THE RECOVERY PROCESS OF AN ECONOMY Page 06 LISTED COMPANIES Page 10 THE PICTORIAL Malawi Stock Exchange 2020 activities pictorial. Page 20 UNIT TRUSTS 10 Unit Trusts are simple and smart way to invest. Find out how. Page 22 THE MALAWI CAPITAL DEVELOPMENT PLAN Page 24 DEMYSTIFYING STOCK MARKET INVESTMENT Page 26 WHERE TO FIND 20 INFORMATION ON INVESTING IN MALAWI Page 28 Also Inside INVESTING IN UNCERTAIN TIMES How does one make a choice to invest in uncertain times? 2 Foreword Page 30 8 Requirements to raise JOURNALISTS AND THE capital through the stock STOCK MARKET exchange Page 32 20 Pictorial 20 34 2020 Trading Summary 36 Corporate Governance Issue 5, 2021 MSE Magazine 1 CEO’s Foreword Looking ahead, the economy is projected market; The Exchange conducted an online to grow by 3.5% anchored by a good maize journalist seminar and hosted a round table harvest and easing of restrictions put in place virtual discussion with journalists. by health authorities to contain the covid-19 pandemic. However, the major downside risk • The Exchange continued with investor emanates from the increasing public debt awareness campaigns which included profile which could push interest rates up and development of a WhatsApp chat bot that crowd out private sector borrowing. There provides information on investing on the are also concerns around further depreciation stock market of the Kwacha due to scarcity of foreign exchange on the market. • The Exchange participated in a saving and investing awareness week hosted by Reserve Market Performance Bank of Malawi. The market registered a positive return on Initiatives going forward investment of 7.08% (2.21% in US$ terms) in 2020 compared to the return of 4.38% Going forward, the Exchange would like to (3.41% in US$ terms) in the prior year. exert all efforts in implementing its strategic It also recorded an increase in volume of plan with emphasis on courting new issuers shares traded despite registering a decrease in order to increase the number of listed in total value traded compared to the securities on the Exchange. This will be corresponding period in 2019. The market done by focusing on expanding the Stock t is with the benefit of hindsight that transacted a total of 1,645,194,139 shares at Exchanges’core business by engaging with we look back at the year 2020 and a total consideration of K41,085,584,358.55 potential issuers to access the market on their recognize the remarkable milestones (US$54,522,713.98) representing an increase capital raising initiatives.The Exchange is that were achieved by the Exchange in of 18.03% in volume and decline of 11.40% also exploring ways of optimizing its trading I the midst of a global health pandemic. in traded value. There were however no trades infrastructure to enhance financial inclusion, on the debt securities market. for instance, through introduction of a mobile The Exchange worked within a challenging trading platform in the near future. Public environment to ensure that the planned Market capitalization, a measure of the awareness initiatives for the investing public activities were undertaken during the year in size of a market, increased both in Kwacha will remain the main focus for the Exchange pursuit of our 2017-2021 strategic plan which and United States Dollar terms from in 2021. We will also continue engaging is now in its final year of implementation. MK1,428,752.94 million (US$1,939.51 policy makers on policy issues affecting stock Whilst we look back to celebrate these million) in January 2020 to MK1,759,857.40 market operations and development. milestones, we do so with fond memories of million (US$2,280.38 million) as at 31st those we wish were still around, but sadly we December 2020 resulting from additional Appreciation lost to the pandemic. In order to celebrate their listing of two counters on the bourse and legacy, we look ahead with resilience, focus share price gains on nine listed companies. Special thanks should go to the Registrar of and renewed optimism in recognition of the Market liquidity, measured by a ratio of Financial Institutions who, is the Governor important role we need to play in rebuilding total value of trades to market capitalization of the Reserve Bank of Malawi, for the our economy and society. The Exchange is was slightly lower at 2.33% from 3.25% support rendered to the Exchange and all geared to play its role in facilitating private registered in 2019. capital market participants and members sector growth and facilitating infrastructure who share the MSE vision of promoting a development in our country through its role Accomplishments for the year 2020 responsive market worthy of public trust that of offering alternative and longterm finance. is characterized by transparency and integrity. It is therefore our hope that you will remain 2020 was yet another busy year for MSE as a valued stakeholder on this journey we are we continued to implement our 2017-2021 Special gratitude is also extended to the taking.With these remarks, I present to you, strategic plan. The Exchange accomplished MSE Board of Directors, for the untiring our readers, the MSE 5th Edition Magazine among others the following strategic activities effort, support and guidance in steering the that provides an overview of the year 2020. during the year: Exchange to achieve its mandated objectives of providing a market for raising capital Economic Environment. • Airtel Malawi Plc raised K27.92 billion and trading of securities. I am also greatly through an Initial Public Offer and indebted to my fellow team members of the The economy took a hit from the covid-19 subsequently got its shares listed on the Stock MSE for their effort and dedication that pandemic which saw real GDP grow by a Exchange on 24th February 2020. has made it possible to attain the achieved dismal 0.9% from earlier projections of 5%. goals. The work we have achieved has Inflation remained within single digit for most • FDH Bank Plc raised K13.80 billion demonstrated that we indeed hold true to our part of the year and averaged 9.31%, which through an Initial Public Offer and values of Transparency, Teamwork, Fairness, is marginally lower than 9.38% registered in subsequently got its shares listed on the Stock Professionalism, and Integrity. 2019. The policy rate was revised downwards Exchange on 03 August 2020. to 12.0% from 13.5% at the end of 2019. Lastly to our esteemed investors, I would Returns on the money market however • The Malawi Government listed 16 bonds like to assure you that the MSE remains increased as depicted by the return on 91 days with a face value of K651.32 billion on 28 committed in propelling the market to greater and 364 Treasury bills from 6.15% to 9.95% September 2020. heights. We are confident that the Exchange and from 10.89% to 13.55%, respectively. will attain the aspirations encompassed in its The exchange rate was largely stable against • The Stock Exchange conducted various goals. the US$ recording a depreciation of 4.76% activities aimed at courting potential issuers and was trading at MK771.74/US$ as at including holding one on one business clinics May God bless Malawi and all of us. 31 December 2020. This depreciation was reflected in the official import cover which • The Exchange continued to conduct Keep safe.