Malawi Political Market Performance Report

7/31/2019 Malawi Political Market Performance Report

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Malawi Political Market Performance Report

By Kumbukani Kuntiya

The Malawi political market continued to register some growth in terms of activity but was a bit comparably

slower than the previous month. The activities were also slower as opposed to some 6 months ago when Peoples

Party was admitted to the political exchange market. Despite not registering major developments like those of

previous periods, the market registered some positive growth almost by all major participating players with just a

few registering negative or no significant growth at all .

DPPThe major casualty were shares as well as political market capitalization for DPP following its failure to acquire any

significant resources towards shares in the Mzimba by-elections. In addition, the offloading of major shares held by

its major shareholder and Chief Executive Officer, Mr. Wakuda Kamanga further worsened the political value of

DPP. In addition, DPP shares and share value as well as 2009 initial 2,963,820 votes political capitalization were

further worsened following resignation of its Executive Vice Director, Dr. Goodall Gondwe who withdrew his

UDF MCP AFORDMgwirizano

CoalitionDPP Others

1994 1,404,754 996,353 562,862 - - 15,624

1999 2,442,685 2,106,790 - - - 114,276

2004 1,195,586 937,965 - 836,118 - 354,132

2009 - 1,365,672 20,150 - 2,963,820 129,232

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Capitalisation

(Votes)

Market Capitalisation - 1994 to 2009


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shares much to the surprise of market analysts and potential investors. He is yet to offer them back on the market

for resale in PP or might stick to his words by not further investing them back on the political market.

PP

On the other hand, the highest climber on the political exchange was Peoples Party. It acquired 100% ownership

of Mzimba South west and later acquired share management rights in Mzimba Central. These greatly boosted its

shareholding of the overall political market for now and it is hoped it might maintain it until the next re evaluation

in May 2014. In terms of its capitalization, PP further gained following acquisition of shares offered by former DPP

CEO Wakuda Kamanga who offered his shares to PP at almost above market value. It is further speculated, share

value for PP might improve further as we move towards the next period should Dr. Goodall Gondwe decide to

offer his shares for sale with a view to get some ownership rights in PP. This again follows a similar offloading by

Mai Chiponda who had a considerable shareholding portfolio in DPP.

In the absence of any independent evaluation and analysis, PP boasts of market capitalization of over 2.5 million

against a possible 5,871,819 as of 2009 market evaluation. It is therefore anybodys guess if DPP is still hanging to

its 2,963,820 market value it acquired in 2009 along with the 113 initial shares it managed to acquire which have

since then been depleted.

AFORD

Another significant movement though quite small was registered by AFORD. This despite not acquiring any shares

during the recent twin sale offer of Mzimba Central and Mzimba South West. It still maintains its 2 prized shares

and hopefully its 20,150 capitalisation it acquired in 2009 is still intact. By the mere effort of indicating interest to

acquire shares in the two companies of Mzimba Central and South West, prospects for increased supporter

confidence might have increased as well as share value prospects. The same scenario applied to Malawis firstfemale company CEO and currently non-voting CEO, Loveness Gondwes NARC who also showed some interest in

the two companies but failed to acquire any shareholding rights despite the terrain being a familiar one. The

company only managed to raise a meager 18 vote acquisition rights which were far below the threshold to secure

the shares available.

Independent conglomerates

Of major interest within the period, were enterprises under Public share ownership scheme or called Independent

conglomerates in other political exchange markets. They continued to offload their shares and the recent one

being the Mzimba Central which was sold off to PP even before the exchange directorate was able to verify theinitial acquisition. It is speculated that the share value at its subsequent disposal to PP had almost tripled in value

and the accrued proceeds have since then been disbursed.

Overall, at an initial 32 independents as of 2009, the shares as well as their value have significantly dropped by

over 50% with PP being the major beneficiary of the majority share capital in most of these public share ownership


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scheme beneficiaries. To date, this is one category that has mostly changed hands in recent times as at one time,

these shares were owned by DPP and have since then been voluntarily transferred to PP at no fee accruing to DPP.

UDF

Finally, UDF did not register any movements on the political exchange. This despite UDFs share price still

registering some volatility ahead of the companys upcoming AGM and share dividend declaration if any will

happen. This bearing in mind, the company has now two parallel board of directors being run by its Executive

President and Chief Executive Officer, Friday Jumbe and Kennedy Makwangwala respectively whilst allegedly being

bankrolled by its former Executive President, Executive Chairman and now Patron, Dr. Muluzi. As of 2009, the

company had 17 shares but a good chunk of them have been depleted possibly at the discretion of one of the

boards or both. To worsen the situation, UDF as of 2009 registered a joint market capitalization of 1,365,672 with

MCP and it is not yet known who provided or now owns the majority of that.

The major players under this period mostly included the following:

Political

Exchange Code

Counter Name Market

Capitalization

2009

No of Shares

2009

Movement

AFORD Alliance for Democracy 20,150 1

DPP Democratic Progressive Party 2,963,820 113MCP Malawi Congress Party 1,365,672 27 Unchanged

NARC National Rainbow Coalition 0 0 Unchanged

Others Others 129,232 35

PP Peoples Party n/a n/a

UDF United Democratic Front n/a 17 Unchanged

Total 4,478,874 193

Note: MCP and UDF had a joint candidate in 2009

UDF MCP AFORD DPPIndepende

ntsOthers Undecided

1994 85 56 36 - - 6 -

1999 93 66 29 - 4 -

2004 49 57 6 - 40 35 6

2009 17 27 1 113 32 2 1

-

20

40

60

80

100

120

Shares

Share Distribution (MPs) - 1994 to 2009


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Prospects for October November period

Next period is likely to bring in some further activity on the political market should DPP and UDF manage to have

support of the Political Exchange Director, Rt. Hon Chimunthu Banda to have shares acquired by PP being

withdrawn through Section 65 of the Companies Act or not. This will be determined in the upcoming joint AGM

which has already been called for by the Exchange Director. But it still remains unknown if the 193 company

representatives will indeed discuss the shares under dispute bearing in mind the case is now in court as per

injunction that was obtained against the Exchange Director including his domestic servants. What is likely to be

discussed instead as per our records is the probable confirmation of the shares acquired by PP in Mzimba.

Other than this issue, more movements in terms of share offloading might continue especially through

consortiums held by previous DPP shareholders like Wakuda Kamanga or Mai Chiponda. Some might as well simply

give them up freely.

The market may also see some possible movements generated by MCP should leadership wrangles take a practical

format as regards some members continue planning to upsurge the incumbent company President and de factoCEO, John Zenus Tembo. This following continued leadership ambitions as shown by party shareholder and legal

mind, Edwin Banda as well as court reinstated CEO Chris Daza. But being a company that believes in maintaining

company discipline as exemplified by Mai Dinala, we are yet to see what will transpire beyond the horizon.

About the author:

Kumbukani Kuntiya is a project and media consultant and personally runs Towards Malawi Elections2014 on

Twitter and Facebook - @Malawi2014 and http://www.facebook.com/MalawiElections2014

Feedback: [email protected] or +265 (0) 884 88 2014
mailto:[email protected]:[email protected]

Malawi Political Market Performance Report

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