What's Happening in Malawi?

Derry Thornalley
Nov 13
9 min read

Malawi Stock Exchange’s 2025 Rally: Performance, Drivers, and Investor Outlook

Meta Title: Malawi Stock Exchange’s Record Rally in 2025 – Analysis and Investor Insights Meta Description: The Malawi Stock Exchange (MSE) has delivered unprecedented returns in 2025, far outpacing peers. Explore the market’s history, recent reforms, sector winners, macro drivers, regional context, and what this means for local and foreign investors. Learn how the Veri Platform enables seamless cross-border access to markets like Malawi.

The Malawi Stock Exchange (MSE) has emerged as Africa’s best-performing bourse in 2025, achieving astonishing gains that have captured global attention. Over the year-to-date, the Malawi All Share Index (MASI) surged by roughly +240–270% (in both kwacha and US-dollar terms). Even in the past quarter alone, the MASI jumped about +75%. Trading volumes exploded (turnover +289% in Q3) and every listed stock finished higher by end-September. This rally has nearly doubled the market capitalization (to ~MK31.5 trillion, about US$18.2 billion) and lifted the market-cap-to-GDP ratio to an extraordinary ~127%.

This report examines the context behind this boom: the MSE’s history, recent policy changes, the stocks driving the surge, currency/inflation factors, regional comparisons, and the implications for investors. We close with how the Veri Platform provides a bridge for cross-border investment into frontier markets like Malawi.

1. Background and Historical Context

The MSE was established in the mid-1990s (in existence since 1994) and began equity trading in November 1996, listing the National Insurance Company (NICO) as its first issuer. Initially conceived to provide a secondary market for government Treasury bills and bonds, it has since grown into a formal stock exchange licensed under Malawi’s financial laws. Today the MSE comprises a Main Board, an Enterprise Development & Growth segment (for SMEs), and a Debt Market.

Over the decades the MSE was very modest in size – only a few dozen listed companies and limited trading activity. Listings include banks (e.g. FDH Bank, Standard Bank Malawi, National Bank of Malawi), telecoms (Airtel Malawi, TNM), consumer/property firms (e.g. Blantyre Hotels, ICON Properties, Sunbird Tourism), and conglomerates (Press Corporation). By 2022 market capitalization was only about US$3.3.

In recent years the exchange modernized: it automated trading, launched a mobile trading app, simplified listing rules, and began requiring ESG disclosures. Its 2023–27 strategic plan focuses on market growth, efficiency, and sustainability, including initiatives to incubate SME listings (Mzinga program) and introduce green/sustainable bonds. These reforms improved transparency and helped deepen local participation – factors that underpin investor confidence in the exchange today.

2. Economic and Regulatory Catalysts

Beyond exchange-specific reforms, Malawi’s broader policy environment has shifted in ways that encouraged investment. In 2024–2025 the government passed several laws to stimulate FDI and market efficiency. Notably, the Investment and Export Promotion Act (2024) created a one-stop Malawi Investment and Trade Centre to attract foreign capital. A new Competition and Fair Trading Act and other regulatory improvements aimed to level the business playing field. Special tax incentive booklets for agribusiness and a pitched-up SME focus also began attracting entrepreneurs.

Crucially, the Reserve Bank of Malawi (RBM) took steps to stabilize the financial system. After severe currency devaluations in 2022–23 and capital controls that strained markets, the RBM has signaled more disciplined policy. In 2024–25 it maintained a high policy rate (~26%) to tame inflation, while improving disclosure standards. According to analysts, these RBM reforms – in monetary policy transparency, bank liquidity management, and financial disclosure – were key to restoring confidence in Malawi’s markets. As one regional report notes, these measures “stabilize the financial system and promote market confidence”.

At the same time, fiscal pressures (soaring public debt, losses in state enterprises, IMF program suspension) compelled talks of structural reforms. Media commentary has stressed reforming loss-making SOEs and curbing fiscal deficits. While much of this concern remains unresolved, the overall message to investors has been intent on liberalizing markets and engaging private capital.

Monitor displaying data charts in a cozy room. Text: VERI PLATFORM, CONNECTING AFRICA. Link: www.veri-global.com. Lamp and plant nearby.

3. Sector and Company Drivers of the Rally

The MSE’s surge has been broad-based across sectors, but financials and a few large counters led the charge. Robust earnings growth in banks, insurers, and telecoms – even amid economic hardships – fueled investor demand. As documented by analysts and brokers, all listed companies were up in Q3 2025. Top gainers included:

National Investment Trust Plc (NITL): +328% in Q3. This investment trust (with a portfolio of securities, bonds, property and cash) more than quadrupled its share price as speculative inflows chased high-growth targets.
Standard Bank Malawi Plc: +174.6%. The stock split in July 2025 boosted liquidity, and its banking franchise benefited from high interest margins.
NICO Holdings Plc: +101.1%. Diversified insurance/financial firm NICO saw its value double, reflecting optimism in financial services.
FDH Bank Plc: +82%. FDH (banking and investment services) jumped roughly 80% in Q3.
National Bank of Malawi (NBM): +75.9%.

Other banks (FMB Capital, Old Mutual Malawi, NBS Bank) and the telecoms Airtel and TNM also gained strongly, as credit growth and mobile money expansion lifted revenues. Consumer names (e.g. Blantyre Hotels, Sunbird Tourism) rallied on tourism recovery hope, though off much lower bases.

Key corporate themes stand out: banks enjoying huge lending spreads at 26% policy rates, telecoms capitalizing on digital services demand, and insurance/investment groups profiting from inflows.

Importantly, domestic institutional (pension) funds and retail investors piled into these stocks as a hedge against inflation and a scarce alternative. One stockbroker put it: “Local retail investors…look for a home for their funds which they presume to be safe for capital preservation”. With banks dominating trade volumes, pension fund rebalancing also amplified gains. In short, strong corporate earnings (especially in finance) plus limited investment alternatives have driven every sector upward.

4. Currency, Inflation and Valuation Dynamics

Paradoxically, the stock surge coincided with serious macroeconomic strains. Inflation in 2025 averaged roughly 25–30% annually, far above the RBM’s 3–6% target. Food and fuel shocks kept prices elevated. The kwacha remained volatile: on the official market it traded around MK 1,730–1,800 per USD, but a black-market rate of over MK 4,500/$1 emerged. Foreign exchange was scarce – the IMF’s $175M program was suspended for lack of reform progress– prompting capital controls and limiting imports.

Against this backdrop, Malawian investors understandably flooded into local equities to preserve value. With bank deposit rates capped and cash rapidly losing purchasing power, stocks became an attractive inflation-hedge. As one analyst observed, “the rally in stocks might be sustained as investors do not have much alternative home for their money”. High lending margins made banks and insurers especially profitable, reinforcing their appeal.

However, such rallies raised valuation concerns. By September 2025 the MSE’s weighted average P/E ratio was about 42–43×, and the P/B ratio around 14–15× – well above any regional norms. Analysts caution that these sky-high multiples are hard to justify without sustained earnings growth. In fact, some stockbrokers note that with so few listed stocks (and many tightly held), share prices have been pushed higher than underlying fund. As one advisor put it: “while spectacular gains…these surges may not reflect genuine business growth… but rather the structural limitations of the market.”.

In sum, currency weakness and double-digit inflation have propelled equity valuations to extremes, creating a classic case of inflation-driven asset re-pricing. Any future stabilization of the kwacha (or return of foreign currency liquidity) could temper the rally. Indeed, one market leader warned that as “sanity returns to the economy”, some stock corrections are likely. For now, however, the MSE remains a nominal winner amid macro woes.

5. Regional Comparisons: Malawi Versus Other African Markets

Malawi’s performance is not just a local anomaly – it far outpaces virtually every other African stock market in 2025. As of late October, Malawian investors were up ~+250% year-to-date (local currency), versus typical gains under 100% in peer markets. For perspective, Ghana’s index was up ~+129% (to USD investors), and Zambia’s ~+107% over the same period. Kenya and Nigeria saw much smaller advances (both well below 50%). In fact, an African markets scorecard ranked Malawi #1 among frontier and emerging African bourses by a wide margin.

Regional stock index returns (%) as of Oct 31, 2025. Malawi’s MASI stands out at ~+250% YTD (local and USD), far above other African exchanges.

The graphic above (African Markets data) highlights Malawi’s lead. Compared to neighbors, Malawi’s equity boom is exceptional. Even among lesser-traded “frontier” exchanges, no other country comes close. Southern Africa Times notes that this momentum is turning Malawi into a “standout frontier investment destination, joining other African exchanges such as Namibia, Kenya, and Mauritius” that have worked to deepen governance and inclusion. If trends hold, Malawi could close 2025 as Africa’s best-performing exchange for a second year in a row.

Malawi’s story contrasts with larger African markets like South Africa or Egypt, which saw single-digit or modest double-digit returns in 2025. It also surpasses the strong markets of Côte d’Ivoire, Tanzania or Nigeria. In short, no other African equity market has delivered anywhere near the 300%+ annual returns (in local terms) that Malawians have seen. This outlier performance has drawn international attention to Malawi as a high-octane frontier case study.

6. Implications and Opportunities for Investors

For local investors in Malawi, the rally has been a windfall (on paper). Those who bought stocks early in 2025 have seen their portfolios multiply several-fold. The event reaffirms a shift: Malawian savers and pension funds increasingly view equities as a hedge against inflation and currency erosion. It has also sparked calls for pension fund reallocation from cash to stocks, given long-term bond yields remain unattractive under high inflation.

Yet the surge comes with caveats. The extremely high valuations and thin liquidity imply heightened risk and volatility. Small-cap or illiquid shares can swing wildly with relatively low volumes. Analysts warn that any stabilization of prices or policy normalization could trigger sharp pullbacks. Indeed, investment advisers now counsel cautious positioning: stay selective, focus on companies with solid fundamentals or growth prospects (e.g. strong banks, telecoms, and exporters). Hedging strategies (e.g. via currency forwards) may be prudent given the kwacha volatility.

For foreign investors (including the Malawian diaspora), the MSE’s boom highlights both opportunity and challenge. On one hand, Malawi’s historic returns – especially after years of stagnant performance – offer a rare chance for outsized gains. A dollar invested in the MASI early in 2024 would have grown more than threefold by late 2025. However, foreign participation has remained extremely limited. Capital controls and hard currency shortages mean non-residents struggle to repatriate profits. Many potential investors (and the diaspora) have been deterred by the illiquid foreign exchange market.

A recent diaspora investment report urges Malawi to “stop viewing emigration as loss” and instead treat its expatriate community as a source of investment capital. The report notes that with FDI inflows subdued ($148 million in 2024) and remittances plunging, Malawian nationals abroad are ready to invest if given structured channels. It proposes diaspora bonds, equity funds, and digital platforms to lower cross-border transaction friction. These ideas point directly to solutions: regulated investment vehicles that let foreigners (and diaspora) put money into Malawian assets transparently.

In practice, savvy investors abroad will watch Malawi closely. The rally has put Malawi on many frontier-market watchlists. Institutional and retail foreign investors seeking high growth may take note — but only if exit risks can be managed. Here lies a big opportunity: platforms and financial intermediaries that provide safe, compliant access to Malawi equity. Increasing market liquidity and adding more listed companies (as experts recommend) would help absorb outside capital and moderate swings.

In sum, the MSE’s ascent is a signal: African local markets can outperform global peers under the right conditions. For Malawians it underscores the need to broaden the exchange, improve depth, and channel local wealth into productive investment. For foreign investors (including diaspora), it suggests looking beyond familiar markets and leveraging new cross-border tools. Those who navigate the currency and governance risks wisely stand to benefit from frontier Africa’s next chapter.

7. Cross-Border Access via the Verī Platform

The Verī Platform exemplifies the new breed of solutions enabling investors to tap markets like Malawi’s directly. Verī is an Africa-based investment infrastructure that connects local exchanges and custodians under one roof. By integrating with each country’s regulators and banking systems, it offers compliant, seamless cross-border trading. In practical terms, a global advisor or Malawian abroad can use Verī to buy and hold Malawian stocks through local custodian partnerships – exactly what local and foreign investors need to participate in rallies like the MSE’s.

In short, platforms such as Verī bridge the gap between Africa’s markets and the global investment community. As Malawi has shown, frontier markets can deliver extraordinary returns, but only if investors can access them. The Verī Platform unlocks this door – making it possible for any investor, anywhere, to directly invest in Malawi equity (and vice versa) under regulated conditions. This new connectivity turns stories of frontier successes into tangible opportunities for wealth creation.

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