NBM Capital projects a downward trend on Malawi’s money market

Investment and financial markets analysis firm NBM Capital says it foresees a downward trend in the interest rate and rejection levels on Malawi’s money market avenue.

The company has said this in its weekly market review where it noted that the rejection of money directed toward Treasury Bills was at K10 billion.

“K3.004 billion was raised against an announced amount of K3 billion. The rejection was 69% and the system remains awash with K10 billion. We foresee the downward trend to certainly continue in the coming weeks. Maturities for the week ending 16th August, 2013 stand at K3.1 billion. Average interbank borrowing rate decreased to 24.20% from 24.68%,”NBM said.

Treasury Bills maturities during the week ended 09th August, 2013 amounted to K793 million. Malawi’s Treasury Bills are open to foreign investors and both the capital and interest are remittal after deduction of withholding tax on interest currently at 15 percent.

Malawi Kwacha

Malawi Kwacha

On the capital market, the Malawi Stock Exchange recorded trading activity in 7 counters of, Illovo, Mpico, NBS Bank, Nico, National Investment Trust Limited, TNM and Old Mutual.

A total of 7.2 million shares were transacted during the week at a total consideration of K45.01 million (US$135,178.59) in 18 deals.

The Malawi All Share Index inched upwards by 194.52 points to close the week at 7483.43 points due to an increase in the Domestic Share Index by 155.29 points from 5705.97 points to 5861.26 points as a result of share price gains in Illovo by K11 from K200 to K211 and NBS by 50 tambala from K10 to K10.50.

The Foreign Share Index was steady at 1256.86 points.

NBM Capital attributed the share price gains in Illovo to the K20 billion net profit which it posted for the year 2012/2013.

“This performance is constantly building up investor’s perception, increased investor’s perception is triggering demand on the stock. Hence, this week’s 5.5% price gain on the counter. Also NBS Bank promises an improved performance in the current year, this too has been pushing up the demand on the stock hence, this week’s 5% price gain on the counter amidst low supply,” said NBM Capital.

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