Malawi's financial market recovered in the second quarter of 2020, after the fall in March. In this wake, Malawi All Share Index, the composite index of all companies listed on the stock exchange, rose by 2.1%, while the Domestic share index, which includes companies based solely in Malawi, rose by 4%.

Although this positive performance is welcomed in this period of uncertainty caused by covid-19, it is below the result in the same period in 2019. The two indices were up by 9.7% and 11.7% respectively, according to data collected by Ecofin Agency. The value of securities traded on the market over the second quarter this year ($9.17 million) is also lower than that in the second quarter of 2019 ($20.4 million).

This overall performance conceals disparities. NBS Bank, a financial company indirectly controlled by the South African insurer Sanlam, grew by 25.4% over the period and continues with a recovery that started in November 2016. At the same time, BKW Capital Holdings, which reported lower results for the 2019 financial year, posted the largest decline in the period (-25.3%) on this financial market. Telekom Networks Malawi, which is the second-largest company on the Malawi Stock Exchange by market capitalization, generated the largest volume of shares traded (45.7%).

Malawi has remained on relatively stable macroeconomic fundamentals, despite the coronavirus pandemic, albeit at a slower pace. The country’s GDP at the end of April 2020 was 7,590 billion Malawian kwachas ($10.3 billion), up 1.9% YoY according to the Central Bank. However, this positive level is still well below the level of inflation, which is up 9.4%.

Idriss Linge