The Malawi Stock Exchange (MSE)-listed companies are expected to double their 2025 cumulative profit to K1.5 trillion, a move analysts say will improve their valuations and ease capital raising initiatives. An analysis of the published trading statements shows that all the 16 companies will post profits with five banks account for more than half of the total profit at K800 billion, which is slightly higher than the market’s K740 billion combined profit of 2024. This highlights how the local bourse is resilient to economic shocks as it closed 2025 as the continent’s best performing stock market with a return of 247 percent.
In an interview on Tuesday, MSE chief executive officer John Kamanga said the doubling of profit is a positive development as profitable firms will have better valuations; hence, easier to raise capital through equity issuance or corporate bonds. He said: “It is also easier for such listed companies to undertake finance expansion through mergers and acquisitions. “Doubling profitability is also a signal of corporate sector resilience where these companies are able to hedge against inflation, foreign exchange volatility and policy uncertainty.” Kamanga said this is a reflection of good corporate governance and risk management improvements.
“The doubling of profitability is, therefore, a signal of strong corporate performance of listed companies, increased market confidence and enhanced market credibility,” he said. For the investors, according to Kamanga, there is an expectation of good dividend, which will be reflected in price re-rating of the profitable companies. In a separate interview, market analyst Brian Kampanje said such profit jump in profit guarantees increased dividends and further gains of share values due to increasing demand.
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He said: “This is great news for the local bourse as it means more dividends for the shareholders and resulting in increased demand for shares leading to more capital gains in view of the surge in the share market price. “The financial industry, especially the banking sector, registered the significant increase in the profits which was then passed on to their conglomerates. This was on the backdrop of high interest rates and lending to the government.” However, Kampanje said looking ahead, listed banks must re-strategise to explore opportunities for sustaining the high profits as the new regime wants to lower the interest rates and discourage short-term borrowing as well as overruling on domestic debt to finance the budget deficit. Stock market investor Purity Chitalo described the 2025 performance as reflecting to MSE’s economic resilience having maintained investor confidence despite worse economic environment associated with high inflation.
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