The Malawi Stock Exchange has lost nearly five trillion kwacha — equivalent to approximately 2.8 billion dollars at current exchange rates — in market capitalisation over the past five months, in a rout that analysts say reflects a combination of domestic economic pressures, shrinking foreign investor appetite, and the lingering aftermath of a currency crisis that has never been fully resolved.
The decline, which accelerated through April and May of this year, has wiped out roughly a third of the exchange’s total listed value and left many of the country’s largest listed companies trading at multi-year lows. The Malawi Stock Exchange’s main index, the Mangochi Composite Index, has fallen by more than 31 percent since January — making it one of the worst-performing equity markets in the world over that period.
The proximate trigger for the latest phase of decline was a combination of a sharp kwacha depreciation against the dollar and a deterioration in government fiscal metrics that prompted the International Monetary Fund to signal concern about the sustainability of Malawi’s public debt. The IMF’s latest Article IV consultation, published last month, noted that Malawi’s external position remained “vulnerable” and that the central bank’s foreign exchange reserves — which had been rebuilding slowly after the 2022-23 crisis — were again under pressure.
But the market’s prolonged weakness reflects deeper structural issues. Malawi’s stock exchange is small by any international measure — total market capitalisation at its peak was less than 10 billion dollars, and trading volumes are thin. The exchange has historically been dominated by a handful of large domestic institutional investors, particularly the country’s pension funds, whose investment decisions are heavily influenced by the direction of domestic interest rates. When the Reserve Bank of Malawi raised its policy rate sharply in 2024 to combat inflation, many pension funds shifted capital out of equities and into government securities, which offered risk-free returns that were suddenly competitive with dividend yields on listed stocks.
The effect on market liquidity has been stark. On many days, no shares change hands at all. The trading screens at the exchange’s Lilongwe offices have become eerie in recent months, with staff outnumbering active participants.
“This is not really about the companies,” said Chikondi Moyo, a financial analyst at Capital Asset Management in Blantyre. “The underlying businesses are largely performing adequately. This is about confidence — in the currency, in the government’s fiscal management, and in the idea that Malawi is a place where your savings can grow safely. That confidence has been broken and it has not been rebuilt.”
The stock exchange’s decline has been most severe in the banking and telecom sectors, which together account for the majority of listed market capitalisation. The two largest banks by assets — Standard Bank Malawi and FMBH — have both seen their share prices fall by more than 40 percent since the start of the year. Telekom Networks Malawi, the country’s largest telecom operator by subscriber base, has fallen by a similar proportion.
The government of President Lazarus Chakwera, whose administration has struggled to restore economic stability since taking office in 2020, has made no public comment on the market’s decline. A spokesperson for the Ministry of Finance said only that the government was “monitoring developments in the financial sector and remains committed to maintaining a stable macroeconomic environment.”
For ordinary Malawians — most of whom have no direct exposure to the stock exchange — the market rout might seem like an abstract concern. But analysts warn that the connection between a functioning equity market and broader economic health is more direct than it appears. A functioning stock market allows companies to raise capital for expansion, which in turn drives job creation and economic growth. When the market collapses, that channel closes.
“In Malawi, the stock exchange is not an abstraction,” Moyo said. “It is the only formal mechanism that Malawian companies have to raise equity capital. When it stops working, the whole economy loses a gear.”
