Investors shun TBs, eye capital market,Investors shun TBs, eye capital market
by: Aubrey Mchulu,Aubrey Mchulu, 11/18/2003, 5:41:56 PM

News of expected aid inflows to Malawi and the subsequent reduction in the Reserve Bank of Malawi (RBM) lending rate have resulted in declining yields for money market instruments, a development which Malawi Stock Exchange (MSE) operations manager John Kamanga said has made the capital market more attractive to investors.
Responding to a question on factors contributing to increased activity on the MSE, Kamanga said yesterday that investors are anticipating more potential for future growth on the registered stocks than to invest in RBM and Malawi Government Treasury Bills which are currently exhibiting a downward trend.
“Returns from the money market instruments are going down and the most attractive avenue to invest now is the capital market,” he said in an interview in Blantyre.
Kamanga also said when buying shares in listed companies, buyers look at the ratios on the daily information sheet and, using the available indicators, they are able to judge long-term expectations for future growth.
Last week, five companies—Stanbic Bank Malawi, National Bank of Malawi (NBM), Packaging Industries Malawi (PIM), Sugar Corporation of Malawi (Sucoma) and Sunbird Tourism—registered price gains on the MSE.
The share price for Stanbic jumped to K6.60 from K6.50 the previous week while that of its major competitor NBM moved from K5.80 to K5.85 and troubled PIM gained K0.20 to trade at K1.60 from K1.40.
Sucoma’s shares traded at K3.65 from K3.60 and Sunbird was the highest price gainer, trading at K1.40 from K1 while Nico Holdings Limited shares lost K0.10 after trading at K0.90 from K1 in the last transaction.
The price gains pushed the Domestic Share Index up by 2.29 percent from 222.53 points to 227.82 points, raising the Malawi All Share Index—a barometer of economic activities on the local bourse—to 442.22 points from 442.14.
During the week, 533,851 shares exchanged hands in six deals.
RBM last Tuesday reduced the bank rate from 45 to 40 percent, a move, economic commentators said, would automatically reduce the cost of borrowing.
Economics Association of Malawi (Ecama) spokesman Perks Ligoya said last week the adjustment in the bank rate was long overdue because it did not make sense for inflation to come down while interest rates remained stagnant.


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News of expected aid inflows to Malawi and the subsequent reduction in the Reserve Bank of Malawi (RBM) lending rate have resulted in declining yields for money market instruments, a development which Malawi Stock Exchange (MSE) operations manager John Kamanga said has made the capital market more attractive to investors.
Responding to a question on factors contributing to increased activity on the MSE, Kamanga said yesterday that investors are anticipating more potential for future growth on the registered stocks than to invest in RBM and Malawi Government Treasury Bills which are currently exhibiting a downward trend.
“Returns from the money market instruments are going down and the most attractive avenue to invest now is the capital market,” he said in an interview in Blantyre.
Kamanga also said when buying shares in listed companies, buyers look at the ratios on the daily information sheet and, using the available indicators, they are able to judge long-term expectations for future growth.
Last week, five companies—Stanbic Bank Malawi, National Bank of Malawi (NBM), Packaging Industries Malawi (PIM), Sugar Corporation of Malawi (Sucoma) and Sunbird Tourism—registered price gains on the MSE.
The share price for Stanbic jumped to K6.60 from K6.50 the previous week while that of its major competitor NBM moved from K5.80 to K5.85 and troubled PIM gained K0.20 to trade at K1.60 from K1.40.
Sucoma’s shares traded at K3.65 from K3.60 and Sunbird was the highest price gainer, trading at K1.40 from K1 while Nico Holdings Limited shares lost K0.10 after trading at K0.90 from K1 in the last transaction.
The price gains pushed the Domestic Share Index up by 2.29 percent from 222.53 points to 227.82 points, raising the Malawi All Share Index—a barometer of economic activities on the local bourse—to 442.22 points from 442.14.
During the week, 533,851 shares exchanged hands in six deals.
RBM last Tuesday reduced the bank rate from 45 to 40 percent, a move, economic commentators said, would automatically reduce the cost of borrowing.
Economics Association of Malawi (Ecama) spokesman Perks Ligoya said last week the adjustment in the bank rate was long overdue because it did not make sense for inflation to come down while interest rates remained stagnant.