* Following reports that K5 trillion in market value has been wiped off the Malawi Stock Exchange (MSE)
* Market volatility is expected in stock markets — MSE Chief Executive, John Robson Kamanga
* The market continues to experience a market correction subsequent to the performance that was registered in 2025 where the market registered a historic return of 247.63%
By Duncan Mlanjira
Malawi Stock Exchange (MSE) Chief Executive, John Robson Kamanga contends that they remain confident that the market will continue to offer opportunities for investors.
John Kamanga
He said this following reports that K5 trillion in stock market value has been wiped off the MSE, and emphasised that “market volatility is expected in stock markets”.
“The market continues to experience a market correction subsequent to the performance that was registered in 2025 where the market registered a historic return of 247.63%.
“The supply of shares on the market has been high compared to demand for the same. The situation has been exacerbated by the suppressed demand from pension funds, who are working on aligning their portfolios with the New Directive which aims to limit exposure to listed equities.”
Thus Kamanga highlights that the MSE “usually emphasises that the stock market is for long term investments and for those that hold such a horizon. Short term fluctuations are not a cause for concern”.
Kamanga explains that MSE has “observed that liquidity has slowed down compared to the previous year, which in turn creates a shallow price discovery mechanism”.
“This, however, does not have an impact on orderly trading conduct in the market. The market has legal and regulatory instruments which we utilise to ensure all trading activity is conducted in a fair, orderly and transparent manner.”
Advertisement
Kamanga adds that the “intention of the 60% ceiling on listed equities for pension funds is meant to first limit exposure to the stock market, and secondly to create opportunities for financing other sectors of our economy — especially towards infrastructure”.
“What is important is for infrastructure project sponsors is to have in place bankable projects which are capable of attracting pension funds and indeed other financiers.
“This is critical because pension funds are inherently cautious given that they are entrusted with people’s life savings.”
Reserve Bank of Malawi
The CEO further reiterated that the Government initially introduced a 30% Capital Gains Tax to be computed on share disposals and explained that the market considered the rate to be too high and would have posed implementation challenges.
“Through our engagements with Government, the Capital Gains Tax was removed and instead a Capital Gains levy of 2% is now applicable on share disposals.
“This offers a more balanced outcome where investors can contribute their fare share of taxes whilst benefitting from a levy that is more predictable and lower than what was initially proposed.”
He thus highlighted that “market volatility is a natural and expected feature of stock market operations — it should not automatically be interpreted to mean something is wrong”.
“Currently, the market has experienced more supply compared to demand. Other times we will see the opposite where there is more demand compared to supply.
“As Malawi Stock Exchange, our focus remains to grow the market by bringing new companies to list on the Exchange.
“We also continue to monitor secondary trading of listed securities to ensure orderly conduct at all times,” says Kamanga.
Advertisement