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.

Market Capitalisation - 1994 to 2009

3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 UDF 1994 1999 2004 2009 1,404,754 2,442,685 1,195,586 MCP 996,353 2,106,790 937,965 1,365,672 AFORD 562,862 20,150 Capitalisation (Votes)

Mgwirizano Coalition 836,118 -

DPP 2,963,820

Others 15,624 114,276 354,132 129,232

DPP The 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

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 first female 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 the initial 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

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.

Share Distribution (MPs) - 1994 to 2009

120 100 Shares 80 60 40 20 UDF 1994 1999 2004 2009 85 93 49 17 MCP 56 66 57 27 AFORD 36 29 6 1 DPP 113 Independe nts 4 40 32 Others 6 35 2 6 1 Undecided -

The major players under this period mostly included the following: Political Exchange Code Counter Name Market Capitalization 2009 20,150 2,963,820 1,365,672 0 129,232 n/a n/a 4,478,874 No of Shares 2009 1 113 27 0 35 n/a 17 193 Movement

AFORD Alliance for Democracy DPP Democratic Progressive Party MCP Malawi Congress Party NARC National Rainbow Coalition Others Others PP Peoples Party UDF United Democratic Front Total Note: MCP and UDF had a joint candidate in 2009

Unchanged Unchanged

Unchanged

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 facto CEO, 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: MalawiElections2014@gmail.com or +265 (0) 884 88 2014