Investors cling to TNM shares at Malawi Stock Exchange

An imminent deal between  Telekom Networks Malawi  (TNM)Limited and South Africa’s Vodacom has led to many investors clinging on to the local firm’s shares at the Malawi Stock Exchange (MSE) in the hope that the share price may increase, Nyasa Times can reveal.

This is clearly indicated in MSE’s daily reports for the past three weeks where only around 100,000 TNM shares are being traded despite the counter having over 10 billion shares in issue.

When news that TNM was in talks with Vodacom to become a strategic partner in the company, investors reacted by pushing in to demand the firm’s shares, which in the end raised the price from K1.32 each to the current price of K1.90.

TNM CEO Willem Swart: He was part of the initial team that set up Vodacom

But at K1.90 each, the share value is still 10 tambala down from TNM’s Initial Public Offer (IPO) price of K2 each.

Financial market analysts have indicated time and gain that TNM has an advantage compared to other counters as it is the only listed telecoms company on MSE.

But critics stress that the company is not doing well accordingly since its un-audited  six months financials say total current assets were K2.6 billion against total current liabilities of K7 billion.

This means the company is technically unsustainable as it cannot service its debts despite revenue climbing to K5.3 billion as at June 30, 2011 up from K4.2 billion recorded in 2010.

The MSE has now has 14 counters after the delisting of Packaging Industries Malawi Limited (PIM) and they include Blantyre Hotels Limited (BHL), NBS Bank, Illovo, Malawi Property Investment Company (Mpico), National Bank of Malawi, Nico, Press Corporation Limited, Real Insurance, Sunbird, Standard Bank Malawi, National Investment Trust Limited (Nitl) and Old Mutual.

Last week market registered shares sales in 7 of the counters in 12 deals with 238,815 shares sold valued at K3.6 million or US$21,628.48.

All this stands at the stock exchange’s total market capitalisation of K209.1 billion.

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