In 1996 there were just over 2, 000 shareholders able to trade their shares on the MSE - this figure has increased to over 25, 000 many being participants in employee share participation schemes and beneficiaries of the Government's privatisation loan scheme. The MSE now regulates 71 listed company directors and requires greater levels of governance and transparency from them through the MSE rules and corporate governance guidelines.
The performance of the MSE has been mixed and dependent to a degree on Malawi's economic climate. However, strong performance from some companies has created inflation-beating returns.
In 2006 the MSE successfully raised new capital for the first time, an event repeated in a subsequent privatisation listing. The increasing number of players in Malawi's capital markets not only provides the opportunities to tap new sources of investment capital but has resulted in more efficient capital markets, especially as liquidity has increased. Liquidity levels have increased significantly and investments in listed equities have become part and parcel of financial institutions' treasury functions.
Further evidence of a deepening of Malawi's capital markets is evidenced by the active participation of 3 stock broking firms and 8 registered asset management companies and increased competitiveness in the commercial and merchant banking sector. The listing of new financial products is expected soon, as is increased private sector activity, as a result of improved macro-economic fundamentals and valuation ratings.
MPICO's IPO provided another landmark in Malawi's development in that investment into real estate is now possible as a core investment management activity. MPICO's fully underwritten IPO has been Malawi's largest to date, offering shares to the value of MK866 million to the general public. The offer was compliant with the MSE's requirement to have at least 25% of the issued share capital of listed companies in the hands of the general public.
MPICO's IPO and listing has provided the opportunity for further diversification of share portfolio intoa sustainable, lower risk, long term, asset class hitherto inaccessible to meaningful broad public participation.
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