Reserve Bank of Malawi. Monthly Economic Review

Reserve Bank of Malawi Monthly Economic Review September 2018

Table of Contents 1.0 INTRODUCTION... 1 1.1 Gross Official Reserves... 1 1.2 Exchange Rates... 1 1.3 Money Supply... 1 1.4 Interest Rates... 1 1.5 Inflation... 1 2.0 EXTERNAL SECTOR... 2 3.0 BANKING AND FINANCE... 3 4.0 CENTRAL GOVERNMENT BUDGETARY OPERATIONS... 6 5.0 PRODUCTION AND PRICES... 8 6.0 MONEY AND SECURITIES MARKET... 10 7.0 CAPITAL MARKETS... 15 APPENDIX... 17

LIST OF TABLES Table 1: Money Supply and its Sources... 3 Table 2: Central Government Budgetary Operations... 7 Table 3: Financial Market Operations... 11 Table 4: Treasury Bills Issuance and Maturity... 12 Table 5: Banking System Liquidity... 14 Table 6: Interest Rate Structure... 14 Table 7: Selected Economic Indicators... 17 Table 8: Year on Year Inflation... 18 Table 9: National Consumer Price Indices... 19 Table 10: Selected Exchange Rates... 20 Table 11: Malawi All Share Indices... 21

GENERAL NOTES This Economic Review is produced by the Reserve Bank of Malawi (RBM) with the aim of providing current economic information to stakeholders. The Review is published within six weeks after the end of the reviewed month. This particular issue outlines domestic financial and macroeconomic developments during the month of September 2018. Owing to the rounding up of figures, separate items may not always sum to corresponding totals. In the tables, the following symbols should be noted:.. Means not available - Means nil or less than one half the significant digit * Means projection + Means revised figure ^ Means preliminary figure All queries relating to this publication should be forwarded to the Director, Economic Policy Research Department, Reserve Bank of Malawi, P.O. Box 30063, Capital City, Lilongwe 3. Tel: 265 1 771 600; or Fax 265 1 770 593; or Email: research@rbm.mw.

1.0 INTRODUCTION This Economic Review highlights economic developments during the month of September 2018. The developments are compared to the previous month but also to the corresponding month of the previous year. The analysis covers developments in the exchange rates, money, credit and interest rates, inflation and real sector. The report also highlights developments in government operations and the stock exchange market. 1.1 Gross Official Reserves Gross official reserves stood at US$689.2 million in September 2018 compared to US$746.1 million recorded in August 2018. This represented 3.3 months of imports. 1.2 Exchange Rates The Malawi kwacha remained stable against the United States dollar and euro but slightly depreciated against the pound in September 2018. Meanwhile, the kwacha appreciated against the rest of the currencies of its major trading partners. 1.3 Money Supply Broad money supply (M2) growth (year-on-year) accelerated to 15.5 percent in September 2018 from 11.0 percent in August 2018 and 14.2 percent in September 2017. The increase was driven by growth in Net Domestic Assets (NDA). On month-on-month basis, M2 marginally decreased to K1,140.6 billion from K1,140.7 billion in August 2018. 1.4 Interest Rates The RBM maintained the Policy rate at 16.0 percent in September 2018. Consequently, commercial banks interest rate structure remained unchanged. The average base lending and the average savings rates were thus recorded at the previous month s positions of 24.78 percent and 8.39 percent, respectively. 1.5 Inflation Reflecting rising prices of food and non-food items, inflation rose to 9.5 percent in September 2018, from 9.3 percent registered in August 2018 and 8.4 percent in September 2017. Food inflation rose marginally by 0.1 percentage point to 10.2 percent while non-food inflation increased by 0.2 percentage points to 8.9 percent. 1

2.0 EXTERNAL SECTOR 2.1 Foreign Exchange Reserves Foreign exchange reserves stood at US$689.2 million in September 2018, adequate to cover import bill of 3.3 months. Foreign exchange inflows amounted to US$78.3 million in September 2018, lower than US$90.4 million recorded in August 2018. The decline was largely explained by a reduction in foreign exchange purchases from the market as well as project funds. Foreign exchnage purchases dropped to US$2.0 million from US$12.5 million in the previous month, while project funds inflows declined to US$14.0 million, from US$21.1 million recorded in the preceding month. In contrast, outlays of foreign exchange increased to US$103.3 million in September 2018 from US$93.3 million in the previous month. 2.2 The Malawi Kwacha Exchange Rates The Kwacha remained broadly stable against the US dollar and euro but marginally lost value against the British pound during September 2018. The local currency traded at K732.51 per US dollar and K852.15 per euro. Whilst against the pound, the kwacha lost value by 1.1 percent to trade at K961.05. The depreciation was explained by a firmer pound due to improved investor confidence as the UK anticipates favourable outcome from the brexit negotiations. In the Asian region, the kwacha emerged stronger than most of the currencies of the trading partners. The appreciation of the kwacha was on account of weakening of most ermeging market currencies due to spillover effects from the trade war between China and US. Consequently, the local currency gained ground by 2.0 percent against both the Japanese yen and Indian ruppee to trade at K6.41 per yen and K10.02 per indian rupee, respectively. Similarly, the kwacha firmed up against the Chinese yuan by 0.6 percent and traded at K105.68 per yuan. In the SADC region, the performance of the Malawi kwacha was rather mixed. The local currency depreciated by 6.4 percent against the South African rand to trade at K52.92 per rand. The depreciation was explained by relatively stronger rand on account of an anticipated hike in the repurchase rate by the South African Reserve Bank (SARB). Against the Zambian kwacha, the local currency gained value by 16.5 percent and traded at K59.37 per Zambian kwacha. The appreciation of the domestic currency was explained by a weaker Zambian kwacha due to increased demand for foreign exchange in Zambia and the general strengthening of the US Dollar among other factors. 2

3.0 BANKING AND FINANCE 3.1 Broad Money and its Components Annual growth rate of money supply (M2) increased to 15.5 percent in September 2018 from 11.0 percent in August 2018 and 14.2 percent in September 2017. The increase was driven by growth in Net Domestic Assets (NDA) amounting to K128.1 billion year-on-year, mainly following expansion of banking system credit to the domestic economy. On a month-to-month basis, M2 decreased by K150.2 million (0.01 percent) to K1,140.6 billion. The outcome was explained by a slowdown in narrow money (M1) amounting to K47.4 billion to K517.8 billion. Both components of M1, namely, demand deposits and currency in circulation declined in the month as the agricultural season bottomedout. In particular, demand deposits declined by K40.5 billion to K325.9 billion whereas currency in circulation fell by K6.9 billion to K191.9 billion. In contrast, quasi money (QM) grew by K47.3 billion to K622.8 billion, almost entirely offsetting the decrease in M1. The surge in QM was on account of both term (time and savings) deposits and foreign currency deposits which rose by K28.4 billion and K18.7 billion to K394.5 billion and K228.3 billion, respectively (Table 1). Consequent to the above developments, the contribution of M1 to the annual growth rate of M2 decreased to 4.2 percent from 8.3 percent recorded in the preceding month whereas the share of QM increased to 11.3 percent from 2.7 percent in the previous month. Table 1: Money Supply and its Sources (in MK billion, unless otherwise stated) 2017 2018 Sep Dec Mar Apr May Jun Jul Aug Sep Money Supply (M2) 987.9 1,074.4 1,021.0 1,048.3 1,110.8 1,141.7 1,132.4 1,140.7 1,140.6 Narrow money (M1) 476.7 502.7 476.9 489.9 535.9 551,0 547.9 565.2 517.8 Quasi-money 511.2 571.7 544.1 558.4 574.9 590.7 584.5 575.5 622.8 Net Foreign Assets 404.9 455.5 344.0 317.7 346.8 407.5 352.6 364.1 330.1 Net Domestic Assets 583.0 618.9 677.0 730.6 764.0 734.2 779.8 776.6 810.5 Domestic Credit 880.2 926.3 964.2 962.5 993.1 934.9 945.8 1,041.1 1,027.2 Government (Net) 458.8 508.3 561.9 545.7 559.5 494.6 486.2 576.8 546.3 Private Sector 411.6 409.8 398.0 406.2 421.2 428.3 438.5 439.5 447.3 Other Pub. Sector 9.7 8.1 4.4 10.6 12.4 12.0 21.1 24.8 33.6 Other Items (Net) -297.2-307.4-287.1-231.9-229.2-200.8-166.0-264.5-216.7 Annual M2 growth (%) 14.2 19.7 17.0 17.7 20.2 14.6 11.1 11.0 15.5 Monthly M2 growth (%) -3.9 3.7-1.1 2.7 6.0 2.8-0.8 0.7 0.0 Reserve Money 255.0 278.9 255.0 253.2 290.1 300.8 307.8 324.2 298.5 Money Multiplier 3.9 3.9 4.0 4.1 3.8 3.8 3.7 3.5 3.8 Source: Reserve Bank of Malawi 3

3.2 Counterparts to Broad Money On the assets side, the monthly drop in M2 was on account of Net Foreign Assets (NFA). NFA of the banking system decreased to K330.1 billion (US$453.9 million) from K364.1 billion (US$501.4 million) and K404.9 billion (US$558.1 million) in August 2018 and September 2017, respectively. Meanwhile, NDA expanded by K33.8 billion to K810.5 billion. 3.2.1 Net Domestic Assets The monthly growth in NDA of the banking system was entirely on account of growth in other items net (OIN). OIN grew by K47.8 billion to minus K216.7 billion, largely on account of maturing commercial banks Repurchase Agreements (REPOs) with the RBM. Domestic credit, in contrast, contracted by K13.9 billion to K1,027.2 billion in September 2018. 3.2.1.1 Domestic Credit The slowdown in the banking system s domestic credit was solely a result of net repayment by the central government. In particular, banking system s net credit to government decreased by K30.4 billion to K546.3 billion. The decrease was, however, partly offset by growth in credit to statutory bodies and to the private sector amounting to K8.7 billion and K7.7 billion to K33.6 billion and K447.3 billion, respectively. i. Credit to the Private Sector Credit to the private sector continued to register positive growth in September 2018, a trend that started in February 2018. In particular, private sector credit grew by K7.7 billion to K447.3 billion in the month compared to a growth of K1.0 billion and K19.7 billion in August 2018 and September 2017, respectively. Commercial and industrial loans, individual/household loans and foreign currency denominated loans grew by K4.3 billion, K3.5 billion and K2.7 billion to K184.9 billion, K119.4 billion and K130.5 billion, respectively. Meanwhile, mortgages contracted by K4.4 billion to K42.1 billion in the month. In terms of economic sectors, K7.6 billion, K6.0 billion and K1.5 billion were extended to the Agriculture, Manufacturing and Transport, storage and communications sectors, respectively. Meanwhile, credit to the Wholesale and retail trade sector contracted by K9.4 billion in the month. However, in terms of proportions of the total private sector credit, Wholesale and retail trade sector at 25.6 percent continued to represent the largest share. Agriculture, Manufacturing and 4

Community, social and personal services sectors claimed 21.1 percent, 20.0 percent and 10.3 percent of the total outstanding credit stock, respectively (Chart 1). Chart 1: Sectoral Composition of Private Sector Credit Source: Reserve Bank of Malawi ii. Credit to the Public Sector The banking system s net credit to the public sector (government and statutory bodies) totaled K579.9 billion as at end September 2018 from K601.6 billion and K468.6 billion in August 2018 and September 2017, respectively. Government net credit from the monetary authorities decreased by K59.7 billion to K279.7 billion in the month, following a drop in Ways and Means advances amounting to K60.4 billion. Government accessed a total of K45.8 billion through Ways and Means advances and repaid K106.2 billion in September 2018. Consequently, the outstanding stock of Ways and Means advances went down to K1.5 billion from K61.9 billion in August 2018. Meanwhile, government deposits with the central bank declined by K704.0 million to K152.6 billion. In contrast, net credit to government from the commercial banks recorded a monthly growth of K29.3 billion to K266.6 billion. Commercial banks holding of Treasury notes and Treasury bills rose by K34.0 billion and K5.3 billion to K145.1 billion and K190.7 billion, respectively. Meanwhile, loans and advances declined by K6.9 billion to K29.0 million and government accumulated deposits amounting to K3.2 billion in the month, thereby moderating the growth of net credit to government. 5

Commercial banks also extended credit to statutory bodies amounting to K8.7 billion. Consequently, the stock of credit to the state-owned enterprises stood at K33.6 billion as at end September 2018. This is in contrast to developments in September 2017, which saw a contraction in credit to statutory bodies of K6.3 billion to K9.7 billion. 3.2.2 Net Foreign Assets NFA of the banking system contracted by US$47.5 million to US$453.9 million on account of a drop in NFA of the RBM to US$376.3 million from US$433.2 million in August 2018. RBM utilised a total of US$103.3 million foreign exchange against total sources amounting to US$78.3 million during the month. Consequently, gross official reserves stood at US$689.2 million, adequate to cover import bill of 3.3 months. In contrast, commercial banks NFA grew by US$9.4 million to US$77.6 million as at end September 2018. This outcome was explained largely by a fall in commercial banks liabilities to the foreign sector. Overall, total banking system foreign exchange reserves stood at US$834.2 million (4.0 months of imports) compared to US$890.9 million (4.3 months of imports) in August 2018. 4.0 CENTRAL GOVERNMENT BUDGETARY OPERATIONS Central government budgetary operations for the month of September 2018 shifted to a surplus of K3.8 billion, following a dificit of K45.5 billion recorded in August 2018. Total government revenues amounted to K115.2 billion against total expenditures of K111.4 billion. 4.1 Revenues 1 Total government revenues for the month of September 2018 rose to K115.2 billion compared to K86.8 billion mobilised in August 2018 and K80.4 billion registered in September 2017. The increase in revenue largely emanated from increased domestic revenues as foreign receipts declined during the month under review. Domestic revenues amounted to K104.9 billion whilst foreign receipts totalled K10.3 billion (US$14.0 million). Grants received in the month of September 2018, comprised K2.4 billion (US$3.4 million) from International Development Association (IDA) for the Agriculture commercialisation project of the Ministry of Agriculture Irrigation and Water 1 Revenue figures may slightly differ with those reported by the Malawi Revenue Authority as RBM records represent data actually remitted into the consolidated account on a particular transfer date. 6

Development, K2.1 billion (US$2.8 million) from International Bank for Reconstruction and Development (IBRD) for the Roads Fund Administration, and K1.5 billion (US$2.0 million) from International Fund for Agriculture Development (IFAD) for the financial access for rural markets and small holders project. The remaining K1.8 billion (US$2.4 million) were grants towards various government projects. Foreign inflows therefore dropped by K5.2 billion (US$7.1 million) from K15.5 billion (US$21.1 million) received in August 2018. Table 2: Central Government Budgetary Operations (in MK billion) 2017 2018 Sep Dec Feb Mar April May Jun July Aug Sep Total Revenues 80.4 74.7 73.3 82.5 95.4 75.0 99.9 92.0 86.8 115.2 Domestic Revenues 73.6 69.6 71.0 77.8 91.9 71.4 86.0 84.2 71.3 104.9 Tax Revenue 71.3 66.8 67.0 65.3 77.5 67.0 81.0 78.9 68.4 101.5 Non Tax revenue 2.3 2.8 4.0 12.5 14.4 4.4 5.0 5.3 2.8 3.4 Departmental 1.6 1.9 3.6 12.2 1.4 3.2 4.5 2.6 2.2 2.4 receipts Other Receipts 0.7 0.9 0.4 0.3 13.0 1.2 0.5 2.7 0.7 1.0 Grants 6.8 5.1 2.6 4.7 3.6 4.3 13.9 7.8 15.5 10.3 Total Expenditures 106.9 91.5 113.3 108.8 99.1 104.0 101.6 78.4 132.2 111.4 Recurrent Expenditure 93.5 74.2 99.4 94.6 82.7 85.8 80.8 65.5 113.7 95.8 Interest Payments 14.9 6.4 21.8 27.0 22.0 17.6 9.5 6.1 21.3 24.8 Domestic 14.6 5.8 20.7 26.5 17.7 16.9 8.4 5.8 21.3 22.2 Foreign 0.3 0.5 1.2 0.4 4.4 0.7 1.1 0.2 0.0 2.6 Development 13.4 17.4 13.9 14.2 16.4 18.3 20.8 12.9 18.6 15.6 Deficit/Surplus -26.5-6.8-39.6-26.3-3.7 28.3-1.6 13.5-45.5 3.8 Financing (net) -38.9 32.8 56.9 34.7 22.4 36.4 8.6 10.1 54.9-1.3 Foreign 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Domestic -38.9 32.8 56.9 34.7 22.4 36.4 8.6 10.1 54.9 1.3 Banking System -45.9 27.2 49.2 4.3-15.7 19.3-66.1-7.2 86.9-30.4 Non-Bank Sector 7.0 5.6 7.7 30.4 38.1 17.1 74.8 17.4-31.9 29.1 Errors and Omissions -65.3 16.0 17.3 8.4 31.0 5.6 7.0 23.6 22.8-10.8 Source: Reserve Bank of Malawi 4.2 Expenditures Total expenditures on the other hand, declined by K20.8 billion to K111.4 billion in September 2018. This contrasts sharply from a K53.8 billion increase in government outlays recorded in August 2018. The decrease in total expenditures recorded in the review month was observed in both recurrent and development components. Recurrent expenditures decreased by K17.9 billion to K95.8 billion while development expenditures recorded a decrease of K2.9 billion to K15.6 billion in the month. 7

5.0 PRODUCTION AND PRICES 5.1 Domestic Production 5.1.1 Tobacco Sales The 2018 tobacco marketing season closed on 27 th September 2018 after running for 26 weeks from 9 th April 2018. The volume of tobacco sales increased by 89.6 percent to 202.0 million kilograms in 2018 from 106.5 million kilograms produced in 2017. This is also 36.7 percent more than the projected tobacco production in 2018 of 147.8 million kilograms. Of the total volume sold, burley tobacco constituted 81.2 percent, flue-cured and Northern Division Dark Fired (NDDF) tobacco accounted for 16.0 percent and 2.4 percent, respectively, while Southern Dark Fired (SDDF) tobacco constituted 0.4 percent of the total volume. A total of 154.7 million kilograms of the tobacco (76.6 percent) was sold under contract system, which is slightly below the target of 80 percent stipulated in the Integrated Production System (IPS). The total volume of sales through the auction system was 47.3 million in 2018, higher than 11.8 million kilograms auctioned in 2017. The higher volume of sales was reflective of increased production in 2018 that was driven by higher prices fetched in the preceding season. According to Tobacco Control Commission (TCC), farmers produced more than the stipulated quotas for 2018. In addition, there was improvement in farming techniques due to increased access to extension services. Consequently, productivity per hectare increased. It was also reported that there was improved leaf quality and low levels of rejection in the 2018 marketing season. Tobacco prices averaged US$1.67 per kilogram in 2018, representing a drop of 16.2 percent from an average price of US$2.00 per kilogram fetched in 2017. Flue cured tobacco prices fetched the highest price and averaged US$2.25 per kilogram, even though it was comparably lower than US$2.92 per kilogram fetched in 2017. Average prices for Southern Division Dark Fired (SDDF) tobacco and Northern Division Dark Fired (NDDF) tobacco stood at US$1.73 per kilogram and US$1.60 per kilogram, respectively, against respective average prices of US$1.79 per kilogram and US$1.75 per kilogram registered in the preceding season. Burley tobacco was sold at an average price of US$1.56 per kilogram, lower than US$1.77 per kilogram last season. The decline in average prices this year was explained by increased production. Total realization from the 2018 tobacco sales amounted to US$337.5 million, representing an increase of 58.8 percent from US$212.5 million realized in 2017. At this level, the 2018 tobacco earnings contributed 1.6 months of prospective import cover compared to 1.0 months import 8

coverage in 2017. The relatively higher tobacco earnings were explained by the relatively higher volumes in 2018 than in 2017. Of the total proceeds, US$277.6 million (82.2 percent) was realized through contract sales whereas US$59.9 percent was realized through auction sales. 5.1.2 Tea Auction Sales Tea production amounted to 3.6 million kilograms in September 2018. Tea sales through the Limbe auction market amounted to 0.46 million kilograms in September 2018 compared to 0.48 million kilograms auctioned in September 2017. Tea prices averaged US$1.38 per kilogram during the month under review compared to US$1.98 per kilogram fetched in a corresponding month in the preceding year. Realisations from the tea sales totalled US$0.6 million, higher than US$1.0 million realised in September 2017. 5.1.3 Sugar During the month of September 2018, sugar production amounted to 26.4 million kilograms while the volume of domestic sales amounted to 3.2 million kilograms. Total domestic realisation was K2.2 billion. Meanwhile, 3.8 million kilograms of sugar valued at K1.9 billion was exported during the review month. 5.2 Domestic Prices Inflation rose for the third consecutive month in September 2018. However, the pace of increase has been slowing down. Headline inflation edged up by 0.2 percentage points to 9.5 percent in September 2018 from 9.3 percent recorded in August 2018. The September 2018 inflation rate was higher than 8.4 percent recorded in September 2017, reflecting rising prices of food and non-food items. Food inflation rose marginally by 0.1 percentage point to 10.2 percent while non-food inflation accelerated by 0.2 percentage points to 8.9 percent. Reflecting lower agricultural production this year, food inflation increased slightly to 10.2 percent in September 2018 from 10.1 percent in the previous month. Maize prices continued to rise, albeit at a slower rate following the announcement that Government will distribute food aid across deficit areas. On average, maize prices rose to K130.25 per kilogram in September 2018 from K125.75 in August 2018, compared to a monthly increase of 7.2 percent recorded in August 2018. Going forward, maize prices are expected to moderate, supported by government s free maize distribution efforts. 9

After remaining constant at 8.7 percent for two consecutive months, non-food inflation rose by 0.2 percentage points to 8.9 percent in September 2018. Inflationary pressures largely resulted from second round effects of upward adjustments in electricity tariff of 7.1 percent effected in August, and in fuel pump price of 9.3 percent in July. Nevertheless, the outturn was lower than 11.6 percent registered in September 2017. Looking ahead, headline inflation is expected to continue rising in the next few months. Inflationary pressures will emanate from the 20 percent electricity base tariff increase and 5 percent fuel pump price hike, both effected in October 2018. Pressure on maize prices is expected to continue, albeit moderately in view of government s announced food support programme. Notwithstanding the upward risks to inflation, external developments remain favourable as the kwacha exchange rate to the US dollar is projected to remain broadly stable and global oil prices are forecast to moderate and average US$69.38/barrel in 2018 and US68.76/ barrel in 2019. 6.0 MONEY AND SECURITIES MARKET 6.1 Open Market Operations In September 2018, net Government operations resulted into a net withdrawal of K26.99 billion. This was a net result of Government net expenditure position of K19.80 billion and a withdraw of K46.79 billion through net issuances of Government domestic debt securities. On the other hand, K12.00 billion was withdrawn through net foreign exchange operations in September 2018. On the other hand, net open market operations injected K94.58 billion into the financial system. Overall, a net of K55.59 billion was injected into the financial system (Table 3). 10

Table 3: Financial Market Operations (in billions of Malawi Kwacha) (K bn) Apr May Jun Jul Aug Sep (Net operations supplying liquidity +) 2018 2018 2018 2018 2018 2018 Net Government Operations (+=injection) -49.17-4.13-48.18-16.04 74.70-26.99 Net Government Position excluding grants -15.65-3.43-14.01-5.66 55.78 19.80 Revenue 91.85 71.39 85.99 84.18 84.59 91.61 MRA 77.49 66.96 80.99 78.89 81.73 88.22 Non-tax 14.36 4.44 4.99 5.28 2.86 3.39 Expenditure 76.20 67.96 71.98 78.52 140.37 111.41 Net Government Domestic Borrowing -33.52-0.70-34.17-10.38 18.92-46.79 TB/TN/PN issues 72.39 96.53 78.23 60.90 70.44 91.43 TB/TN/PN maturity 38.87 95.83 44.06 50.52 89.36 44.64 Net Forex Operations 0.31 23.50 106.50 13.20-2.50-12.00 Sales 36.08 50.00 87.00 110.80 70.00 74.00 Purchases 36.39 73.50 193.50 124.00 67.50 62.00 Net OMO 53.43 28.92-35.68 51.57 20.49 94.58 Injections 173.83 311.13 211.28 237.00 192.01 246.32 RBM bill maturities 0.00 0.00 0.00 0.00 0.00 0.00 Maturity of 3-YR RBM bond 0.00 0.00 0.00 0.00 0.00 0.00 Purchase of securities 0.83 0.00 0.00 0.00 0.00 0.00 Maturity of OMO T-bills 0.00 0.00 0.00 0.00 0.00 0.00 Maturing Deposits on Deposit Facility 0.00 0.00 0.00 0.00 0.00 0.00 Access on the Lombard Facility 80.27 259.31 115.51 127.00 145.49 153.11 Repo maturities 92.79 51.82 95.77 110.00 46.52 93.21 Withdrawals 173.80 282.21 246.96 185.43 171.52 151.74 RBM bill issues 0.00 0.00 0.00 0.00 0.00 0.00 Issue of Monetary Policy TBs 0.00 0.00 0.00 0.00 0.00 0.00 Issue of RBM bond 0.00 0.00 0.00 0.00 0.00 0.00 Deposits on Deposit Facility 0.00 0.00 0.00 0.00 0.00 0.00 Sale of securities 30.51 4.04 78.02 14.73 0.00 0.00 Maturing Access on the Lombard Facility 68.77 270.91 102.09 132.96 156.34 144.48 Repos 21.18 7.26 66.85 37.74 15.18 7.26 Net Operations 4.57 48.29 22.64 48.73 92.69 55.59 Reserve Money Estimate: Currency in Circulation Bankers Deposits Reserve Money Target Reserve Money Over (+)/Under (-) Performance Source: Reserve Bank of Malawi 257.97 285.87 288.56 307.82 317.93 295.18 172.27 85.69 303.48 45.51 207.32 78.55 303.48 17.61 219.04 69.52 303.48 14.92 228.32 79.49 299.00 8.72 227.66 90.27 299.00 18.84 213.98 81.20 299.00-3.82 6.2 Government Securities Market 6.2.1 Treasury Bills Primary Market Subscriptions on Treasury bill auctions during the month of September 2018 totaled K53.13 billion. The 91 day tenor was the least subscribed as it attracted 12 percent of the funds. On the other hand, the 182 and 364 day tenors attracted 46 percent and 42 percent, respectively. A sum of K35.29 billion was allotted across all tenors. The allotment distribution mirrored the 11

distribution of subscriptions. The 182 and 364 day tenors were allotted 46 perecent and 41 percent, while the 91 day got 13 percent. On the other hand, treasury bills maturities for the month stood at K20.19 billion, comprising of normal Treasury bills as there were no maturities of treasury bills from ways and means conversions. Therefore, there was a net issuance of K15.09 billion. Consequently, the stock of Treasury bills closed the month at K583.49 billion from an opening position of K568.4 billion. Table 4: Treasury Bills Issuance and Maturity Total Subscription Issues Normal TB from Conversion Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 20.66 45.57 53.63 77.79 80.46 62.37 36.71 75.02 90.14 53.13 18.77 44.41 109.17 77.79 80.46 109.37 88.42 66.74 78.06 35.29 18.77 44.41 47.08 77.79 80.46 57.36 34.88 66.74 78.06 35.29 0.00 0.00 62.09 0.00 0.00 52.01 53.54 0.00 0.00 0.00 Maturities 11.35 40.26 62.06 52.60 26.95 95.83 44.06 44.39 23.32 20.19 Normal 11.35 40.26 27.76 52.60 26.95 33.74 44.06 44.39 23.32 20.19 TB from Conversion 0.00 0.00 34.30 0.00 0.00 62.09 0.00 0.00 0.00 0.00 7.42 4.14 47.11 25.19 53.50 13.54 44.36 22.35 54.74 15.09 Net Issues (+)/ maturities(-) T-Bill stock at Face Value 308.19 312.33 359.44 384.63 438.14 446.95 491.31 513.66 568.40 583.49 Memorandum Items: Conversions 0.00 0.00 62.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 T-Bill stock at Cost Value 250.07 250.07 310.88 337.23 386.75 391.77 431.82 453.58 522.80 516.80 Source: Reserve Bank of Malawi 6.2.2 Treasury Bills Yields Average yields stayed put for all tenors except for 91 day which slightly rose to 13.97 percent from the previous month s 13.93 percent. Thus the 182 and 364 day average yields remained at 14.5 percent and 15.00 percent, respectively. Consequently, the all type average yield slightly rose to close at 14.49 percent from previous month s position of 14.48 percent. (Chart 2). 12

25 Chart 2: Treasury Bills Yields 20 Percent 15 10 5 0 Source: Reserve Bank of Malawi 91 day yield 182-day yield 364-day yield All type yield 6.2.3 Treasury Notes Market In the month under review, a 3 year Treasury note worth K6.22 billion matured. Nonetheless, this was outweighed by the issuance of 2-year Treasury note worth K64.66 billion at an average yield of 18.48 percent. Thus treasury notes had a net issuance of K58.44 billion. Consequently, the stock of Treasury notes closed at K 910.53 billion. 6.3 Inter-bank Money Market Banking system liquidity marginally dropped in September 2018 compared to August 2018. The daily average un-borrowed excess reserves for September 2018 closed at negative K3.53 billion compared to K3.17 billion that was recorded during the preceding month. Consequently, access on the Lombard Facility increased to an average of K10.20 billion per day in September 2018 from K7.66 billion per day recorded in August 2018. On the contrary, traded volume on the interbank market dropped to an average of K8.40 billion per day in September 2018 from K9.16 billion per day in August 2018, suggesting a better distribution of funds in the banking system. Hence to the tighter liquidity condition alluded to above, the interbank market rate (IBR) increased to 14.45 percent and the end of September 2018 compared to 13.44 percent that was recorded at the end of August 2018. 13

(K bn) Table 5: Banking System Liquidity Mar Apr May 2018 2018 2018 Daily Average Total Reserves 82.50 84.32 78.50 81.29 88.16 87.84 83.96 Daily Average Required Reserves 73.98 73.44 74.44 75.87 77.26 77.01 77.29 Daily Average Excess Reserves 8.52 10.88 4.06 5.42 10.90 10.83 6.67 Daily Average Un-borrowed Excess Reserves 5.07 6.42-8.91-0.66 3.16 3.17-3.53 Daily Average Inter-bank Market Trading 9.20 6.96 9.72 7.43 6.50 9.16 8.40 Daily Average Lombard Facility Access 3.45 4.46 12.97 6.08 7.74 7.66 10.20 Inter-bank Market Rate (End Period, Percentage) 14.15 14.31 15.47 16.23 14.90 13.44 14.45 Source: Reserve Bank of Malawi 6.4 Interest Rates The monetary authorities maintained the policy rate at 16.0 percent in the quarter. Similarly, commercial banks left their interest rate structure unchanged in the month, with the average base lending rate and the average savings rate at previous month s rates of 24.78 percent and 8.39 percent, respectively. June 2018 July 2018 Aug 2018 Sep 2018 Table 6: Interest Rate Structure 2017 2018 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Policy Rate 16.00 16.00 16.00 16.00 16.00 16.00 16.00 16.00 16.00 16.00 Base Rate 26.90 24.78 24.78 24.78 24.78 24.78 24.78 24.78 24.78 24.78 3-mon Fixed Rate Savings Rate Interbank Rate Minimum 8.88 8.13 8.13 8.13 8.13 8.13 8.13 8.13 8.13 8.13 5.83 8.39 8.39 8.39 8.39 8.39 8.39 8.39 8.39 8.39 14.41 14.79 13.56 13.60 13.60 14.36 14.27 12.78 13.44 13.48 Maximum 16.47 15.30 17.03 14.15 14.31 15.94 16.23 15.46 15.67 15.14 All Type Treasury bill Yield 1 15.10 14.50 14.49 14.50 14.50 14.50 14.53 14.52 14.45 14.51 91 Days 14.69 14.50 13.98 14.00 14.00 14.00 14.10 14.06 13.85 13.97 182 Days 14.98 15.00 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.57 364 Days 15.64 14.50 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 Mortgage (min) 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 Source: Reserve Bank of Malawi 14

7.0 CAPITAL MARKETS 7.1 Stock Market 7.1.1 Primay Market The primary market remained dormant as there was no listing. The number of listed companies therefore stood at 13. 7.1.2 Secondary Stock Market The secondary stock market recorded an increase in value of shares traded despite a decline in number of shares traded during the month under review. A total of 27.09 million shares earning K3,758.35 million traded compared to 43.72 million shares earning K3,009.47 million in the previous month. This development represented a 38.04 percent decline in volume of share trades and a 24.88 percent increase in turnover. The increase in turnover despite a drop in volume of share trades was due to high-value shares accounting for a larger proportion of shares traded when compared to the prior month. The share volume and value both declined when compared to the corresponding month of the previous year in which 83.48 million shares changed hands at a total consideration of K4,919.10 million. The Malawi All Share Index (MASI) gained 416.76 points and closed off the month at 32,373.19 points resulting in a monthly return on index of 1.30 percent. The increase in MASI resulted from an increase in the Domestic Share Index (DSI) despite a drop in the Foreign Share Index (FSI). The DSI closed higher at 21,621.84 points in September 2018 from 21,145.76 points in August 2018 while the FSI closed lower at 8,138.23 points from 8,237.32 points (refer to Chart 3 below). The increase in DSI was on account of share price gains on Blantyre Hotels plc (BHL), National Bank of Malawi plc (NBM), MPICO plc (MPICO), NBS Bank plc (NBS), National Investment Trust plc (NITL), Press Corporation plc (PCL) and Telekom Networks Malawi plc (TNM) counters despite a share price loss on NICO Holdings plc (NICO) counter. The decline in FSI was on account of a share price loss on FMB Capital Holdings plc (FMBCH) counter. 15

Chart 3: Trends in DSI, FSI and MASI Source: Malawi Stock Exchange Total market capitalisation closed higher at K1,434.95 billion in September 2018 from K1,416.48 billion recorded in the previous month. The increase was due to the share price gains on seven domestic counters despite share price losses on one domestic counter and one foreign counter. Domestic market capitalisation closed higher at K1,051.20 billion during the review period from K1,028.06 billion in the previous review period. The increase was on account of the share price gains. On the other hand, foreign market capitalisation declined to K383.75 billion from K388.42 billion on account of the share price loss. In dollar terms, total market capitalisation stood at US$1.97 billion during the period under review compared to US$1.95 billion in the previous review period. In the corresponding period of 2017, the total market capitalisation stood at US$14.45 billion. The decline in total market capitalisation between the two periods was due to delisting of Old Mutual plc (OML) counter which, in September 2017, had a market capitalisation of US$13.11 billion. The foreign counter delisted on 29th June 2018. 16

APPENDIX Real Sector Table 7: Selected Economic Indicators (in billions of Malawi kwacha unless otherwise stated) 2012 2013 2014 2015 2016 2017 2017 Sept 2018 Sept Population (million) 14.8 15.3 15.8 16.3 16.8 17.4 17.4 17.9 GDP at current market prices 1,425.2 1,924.1 2,534.5 3,212.7 3,812.6 4,631.9 4,635.6 5,270.0 Real GDP growth (percent) 2.1 6.3 6.2 3.3 2.7 5.1 5.2 4.0 GDP per capita (K 000) 102.5 133.6 160.4 197.1 226.9 266.6 266.8 293.9 GDP per capita (US$) 411.6 361.9 378.0 394.5 318.1 365.1 108.3 109.2 Consumer Price Index (CPI) 2 403.4 127.3 157.6 192.0 233.7 260.7 254.2 105.1 Average annual inflation rate (percent) 21.3 27.3 23.8 21.9 21.7 11.5 8.4 9.5 Fiscal Sector Total Revenue 363.3 476.4 535.9 661.3 810.0 946.6 80.4 115.2 Domestic Revenues 265.2 373.0 483.0 614.2 742.0 858.7 73.6 104.9 Grants 97.9 103.4 52.9 47.1 67.0 87.9 6.8 10.3 Total expenditure 388.6 539.3 593.1 762.7 964.3 1,136.1 106.9 111.4 Recurrent 349.8 459.9 534.4 667.2 832.5 973.1 93.5 95.8 Development 72.1 79.4 58.7 95.5 131.8 163.0 13.4 15.6 Deficit/GDP ratio (after grants) -6.5-3.4-2.6-3.2-4.0-4.1-0.6 0.1 Monetary Sector Net Foreign Assets 31.9 134.2 241.6 339.5 355.8 455.7 404.9 330.1 Net Domestic Credit 369.6 452.4 458.2 604.4 755.0 937.8 880.2 1,027.2 Government 140.6 184.1 153.4 209.0 337.5 519.9 458.8 546.3 Statutory bodies 19.4 17.8 4.3 5.1 9.2 8.1 9.7 33.6 Private (gross) 220.1 250.4 300.5 390.3 408.3 409.8 411.6 447.3 Money Supply (M2) 386.5 522.0 629.8 778.8 897.3 1,074.4 987.9 1,140.6 M2 Growth Rate (annual percent) 22.9 35.1 20.7 23.7 15.2 19.7 14.2 15.5 Reserve Money 113.2 156.9 212.3 206.0 240.6 278.9 255.0 298.5 Banks Deposits 42.2 61.6 92.4 66.0 56.2 78.2 70.1 81.2 External Sector Overall Balance 6.3 68.6 76.3 45.1-48.0 43.9.... Current Account -208.9-449.1-482.1-411.5-532.4-555.4..... Exports (fob ) 313.8 472.0 641.9 562.0 754.0 694.5 57.6.. Imports (fob) 584.5 1002.5 1140.6 1105.1 1537.0 1807.7 155.9.. Trade balance -270.7-530.5-498.7-543.1-783.0-1113.2-98.3.. Capital account balance 89.6 222.7 194.1 114.0 171.6 219.1.... Gross foreign exchange reserves 139.1 278.4 389.6 549.2 586.7 586.7 689.5 606.7 Official 72.2 173.0 276.6 445.3 438.6 438.6 540.4 501.2 Commercial banks 66.9 105.4 113.0 103.9 148.1 148.1 149.0 105.5 Import cover (Official reserves in months) 1.1 2.1 3.1 3.2 2.9 2.9 3.5 3.3 Current account balance/gdp (percent) -19.0-27.6-19.7-16.9-20.5-24.0.... Debt/GDP (percent) 28.9 34.1 33.6 33.0 35.0 44.4 60.3 60.1 Debt Service/Exports (percent) 1.2 2.5 3.4 3.8 4.1 5.4 3.0.. MK/US Dollar (eop) 335.127 435.229 435.229 664.365 725.01 730.46 731.63 732.51 MK/US Dollar (pd avg) 330.457 369.181 369.181 499.607 713.85 726.65 730.78 732.13 Source: Reserve Bank of Malawi 2 2000=100 for the years 2007-2009 and 2012; 2010= 100 for the years 2010, 2011 and 2013. 17

Table 8: Year on year Inflation (2012=100, 2017=100) All items Food & Non-alcoholic Non-food inflation 2015 21.9 23.9 20.0 2016 21.7 26.6 17.1 2017 11.5 10.3 12.8 2015 Jan 21.2 21.5 20.8 Feb 19.7 19.0 20.4 Mar 18.2 17.0 19.3 Apr 18.8 18.1 19.5 May 19.5 21.4 17.8 June 21.3 24.2 18.8 July 22.2 25.3 19.6 Aug 23.0 26.8 19.9 Sept 24.1 27.3 21.3 Oct 24.7 28.3 21.4 Nov 24.6 28.9 20.6 Dec 24.9 29.2 20.7 2016 Jan 23.5 28.4 18.5 Feb 23.4 28.6 17.9 Mar 22.1 26.5 17.8 Apr 20.9 24.3 17.7 May 21.5 25..7 17.6 June 22.6 27.7 18.2 July 23.5 29.2 18.7 Aug 22.8 28.7 17.8 Sept 21.2 27.0 15.9 Oct 20.1 25.4 15.2 Nov 19.9 24.8 15.2 Dec 20.0 24.4 15.4 2017 Jan 18.2 21.1 15.0 Feb 16.1 17.5 14.6 Mar 15.8 17.0 14.5 Apr 14.6 14.7 14.5 May 12.3 11.2 13.5 Jun 11.3 9.3. 13.2 Jul 10.2 7.4 12.7 Aug 9.3 6.2 12.2 Sept 8.4 5.1 11.6 Oct 8.3 4.8 11.7 Nov 7.7 4.7 11.0 Dec 7.1 4.3 10.0 2018 Jan 8.1 7.6 9.6 Feb 7.8 7.3 9.4 Mar 9.9 10.6 9.7 Apr 9.7 10.0 8.9 May 8.9 9.5 8.4 Jun 8.6 9.1 8.2 Jul 9.0 9.5 8.7 Aug 9.3 10.1 8.7 Sep 9.5 10.2 8.9 Source: National Statistical Office 18

Table 9: National Consumer Price Indices (2012=100, 2017=100) All items Food & Nonalcoholic Alcoholic drinks & Tobacco Clothing & Footwear Housing, water & electricit y Furnishing & Household Health Transp ortation Commu nication Recreation & Culture Education Restauran ts & Hotels Miscellan eous Weight 100 50.2 2.4 5.9 12.6 3.0 1.3 11.7 3.6 1.2 3.0 1.3 3.9 2015 192.0 185.1 156.7 174.4 241.9 192.1 159.6 176.1 183.9 223.4 169.1 262.0 158.2 2016 233.7 234.4 181.3 199.1 294.1 225.7 184.4 201.2 195.9 268.8 205.6 297.6 176.0 2017 260.7 258.4 209.3 224.6 346.2 246.7 225.3 211.9 205.1 321.9 224.5 329.9 191.9 2016 Jan 229.2 237.3 160.6 186.7 280.8 212.7 167.5 191.8 189.2 242.0 198.5 279.1 168.8 Feb 238.6 250.8 166.8 190.4 288.2 216.8 171.9 195.5 196.1 258.0 198.5 284.3 169.7 Mar 232.5 237.8 170.4 191.7 288.5 218.9 172.6 196.6 196.6 258.2 198.5 285.2 171.5 Apr 226.6 224.6 172.5 193.1 289.6 222.0 176.3 200.1 196.5 258.5 198.5 287.5 173.3 May 226.0 222.5 174.0 195.2 290.3 224.0 178.4 200.6 196.5 260.3 198.5 289.7 174.3 June 222.9 214.6 181.1 197.0 290.8 226.5 180.5 202.3 196.6 268.2 198.5 294.0 174.6 Jul 221.1 209.8 184.2 200.2 291.8 227.9 184.6 202.5 196.6 271.4 198.5 295.9 175.7 Aug 223.9 214.1 188.4 201.4 292.7 229.4 190.3 203.4 196.6 271.8 198.3 307.7 177.6 Sept 234.4 232.3 190.7 202.4 293.4 230.1 191.4 203.8 196.6 275.1 219.7 309.5 178.8 Oct 238.3 238.9 192.6 206.7 294.5 231.1 195.3 204.4 196.6 275.9 219.7 310.8 181.4 Nov 249.7 256.5 194.4 211.6 306.9 233.8 198.7 206.2 196.6 282.0 219.8 311.8 182.3 Dec 261.4 273.4 199.7 213.2 322.1 235.4 205.6 207.6 196.6 304.4 219.8 315.5 183.6 2017 Jan 270.7 287.3 200.4 217.3 332.7 237.7 211.9 208.1 198.0 308.8 220.5 317.6 187.0 Feb 277.1 294.8 201.2 219.1 348.0 239.9 212.4 208.5 198.0 315.0 220.5 319.4 188.9 Mar 269.3 278.3 201.6 220.1 348.2 240.6 217.4 209.4 198.0 321.0 220.5 320.1 190.0 Apr 259.7 257.6 201.6 221.1 348.4 243.2 219.5 210.2 205.3 321.2 222.0 320.3 191.0 May 253.9 247.4 202.9 222.8 341.9 243.8 220.9 210.8 205.3 321.4 222.0 330.8 192.3 Jun 248.1 234.4 209.0 225.4 342.2 246.3 229.7 212.0 205.3 322.7 222.0 332.5 193.0 Jul 243.6 225.4 210.9 226.6 340.3 249.8 230.3 212.3 205.3 323.7 222.0 333.1 192.8 Aug 244.8 227.4 211.2 227.4 340.3 250.5 230.5 213.8 205.3 324.0 222.0 333.9 193.3 Sept 254.2 244.3 216.9 228.3 340.4 251.0 231.0 214.2 210.1 324.0 230.6 334.0 193.2 Oct 258.0 250.4 217.2 228.6 344.5 251.9 231.7 214.4 210.1 325.8 230.6 338.0 193.7 Nov 269.0 268.5 218.5 229.2 355.8 252.6 234.3 214.5 210.1 327.4 230.6 338.8 193.9 Dec 279.9 285.2 219.7 229.4 372.0 253.3 234.3 214.7 210.1 327.4 230.6 340.8 194.0 2018 Jan 3 104.5 108.4 100.0 100.1 103.0 100.1 100.5 100.2 100.0 100.4 100.0 100.4 100.4 Feb 106.8 110.9 101.3 102.4 105.5 102.5 101.6 102.1 101.0 101.7 100.0 101.9 102.4 Mar 105.8 107.9 103.5 103.6 106.2 102.9 102.1 102.6 101.1 101.8 100.2 102.2 103.6 Apr 101.8 99.3 104.1 104.0 105.6 103.0 102.5 102.7 101.1 102.1 100.2 102.3 103.8 May 101.2 97.7 104.8 104.5 105.6 103.3 102.8 103.1 101.8 102.8 100.2 10.3.0 104.1 Jun 101.0 96.5 106.3 104.7 105.7 104.3 103.3 104.5 101.9 103.5 100.2 103.5 104.9 Jul 101.6 97.5 107.0 105.2 105.7 105.1 103.3 105.8 101.9 103.6 100.2 103.8 105.3 Aug 103.0 100.1 107.9 106.3 105.9 106.0 104.2 106.4 102.3 104.4 100.2 104.0 107.4 Sep 105.1 103.7 108.3 107.8 106.0 107.6 106.8 107.2 103.0 105.1 101.5 105.4 109.4 Source: National Statistical Office 3 From Jan 2018 base year is 2017 (i.e. 2017=100) 19

Table 10: Selected Exchange Rates US dollar Euro British pound Japanese yen SA rand ZMK Buy Sell Buy Sell Buy Sell Buy Sell Buy Sell Buy Sell 2015 490.519 508.693 543.982 564.100 748.718 776.460 4.208 4.139 38.303 39.764 58.191 60.503 2016 704.898 722.806 779.096 798.800 954.603 979.848 6.498 6.663 48.104 49.321 68.466 70.199 2017 727.928 733.447 819.526 834.266 935.918 953.000 6.398 6.559 53.794 55.267 75.296 77.042 2015 Jan 439.266 469.247 497.249 531.188 661.840 707.015 3.714 3.967 38.016 40.612 67.684 72.303 Feb 427.057 447.650 462.085 484.369 639.114 669.938 3.547 3.718 35.339 37.043 61.550 64.590 Apr 430.152 448.896 463.557 483.753 632.678 660.208 3.599 3.756 35.827 37.388 58.166 60.698 May 430.280 448.985 479.983 500.855 664.743 693.639 3.564 3.719 35.975 37.539 59.061 61.627 Jun 428.129 446.334 480.426 499.036 666.314 694.652 3.461 3.608 34.829 36.312 58.463 60.950 Jul 458.112 480.430 504.173 528.729 712.848 747.560 3.717 3.899 36.806 38.602 59.800 62.713 Aug 551.507 564.452 616.420 630.888 849.101 869.031 4.534 4.640 41.468 42.441 64.203 65.710 Sept 554.563 567.806 623.164 638.048 850.969 871.293 4.616 4.726 40.722 41.694 55.302 56.621 Oct 546.158 558.865 612.276 626.896 835.620 855.565 4.542 4.745 40.383 41.347 45.316 46.398 Nov 573.804 588.287 616.625 632.188 872.797 894.826 6.576 6.742 40.647 41.673 47.023 48.210 Dec 628.551 644.416 683.866 701.127 942.858 966.655 5.160 5.290 42.012 43.072 58.100 59.567 2016 Jan 689.273 707.802 735.692 754.318 994.826 1020.01 5.842 5.990 42.216 43.284 62.063 63.634 Feb 733.310 751.496 814.174 834.368 1050.36 1076.41 6.379 6.537 46.563 47.718 64.740 66.346 Mar 676.070 694.295 766.535 787.199 954.023 993.090 6.156 6.321 46.244 47.491 69.387 71.256 April 676.069 694.295 766.534 787.199 954.023 993.090 6.322 6.239 46.244 47.490 71.256 70.321 May 691.907 708.911 781.808 801.144 1006.07 1030.95 6.346 6.504 45.074 46.189 68.885 70.589 June 702.361 718.710 788.202 806.547 996.913 1020.12 6.675 6.830 46.445 47.526 65.451 66.975 July 707.082 725.022 782.366 802.215 932.749 956.413 6.776 6.947 49.128 50.375 71.436 73.249 Aug 711.599 729.887 797.475 817.970 932.851 956.826 7.024 7.205 51.748 53.078 70.656 72.472 Sept 712.351 730.113 798.610 818.523 937.345 960.718 6.987 7.161 50.691 51.955 71.480 73.262 Oct 712.296 730.153 785.775 805.475 880.354 902.425 6.864 7.036 51.178 52.461 71.929 73.732 Nov 716.301 733.994 761.643 780.457 894.159 916.246 6.355 6.512 51.462 52.733 72.500 74.291 Dec 715.802 734.216 753.882 773.277 879.076 901.692 6.130 6.287 52.606 53.960 72.786 74.658 2017 Jan 725.4263 733.7676 773.148 786.0787 908.281 921.0467 6.3112 6.4723 53.232 54.6379 72.3917 72.392 Feb 727.5507 734.1088 766.153 776.6298 899.648 914.2061 6.3855 6.5432 55.685 56.7389 75.4237 77.287 Mar 730.4553 733.5409 770.795 785.4901 899.134 910.3683 6.4025 6.5593 52.618 54.7542 74.3031 76.123 Apr 727.9241 733.7879 785.475 799.8573 931.334 950.6818 6.4594 6.6097 54.770 55.3697 76.4916 78.271 May 726.3399 734.1363 809.439 822.4890 927.763 942.5229 6.4665 6.6195 55.263 56.0864 77.5978 79.435 Jun 725.0088 732.0193 821.648 841.2921 937.907 958.2446 6.3984 6.5630 55.475 56.3497 77.8513 79.854 Jul 728.5534 732.5427 853.031 863.8501 947.279 968.0404 6.4782 6.6474 55.710 56.5157 80.6576 82.766 Aug 730.6206 733.5961 850.556 872.7486 936.025 951.9495 6.4797 6.6478 55.749 56.4610 78.5632 80.601 Sept 729.5337 733.7183 854.065 866.2215 967.268 987.7027 6.3596 6.5245 53.274 54.4250 73.9317 75.849 Oct 728.5009 733.5496 850.088 863.9010 953.606 971.9396 6.3397 6.5040 50.168 53.7386 73.4311 75.335 Nov 728.0260 733.3131 845.541 862.6286 954.842 971.9675 6.3491 6.5121 48.949 52.2226 71.6653 73.505 Dec 727.1969 733.2882 854.369 870.0076 967.933 987.3355 6.3436 6.5073 54.632 55.9053 71.2446 73.084 2018 Jan 728.9951 728.9951 892.879 909.2079 1032.505 1045.1487 6.6432 6.8167 60.972 62.3169 73.1576 75.068 Feb 728.9951 733.9883 892.879 909.2079 1009.673 1028.4182 6.6432 6.8167 60.972 62.3169 73.1576 75.068 Mar 729.2749 734.0041 891.443 906.8581 1012.079 1027.8229 6.7283 6.9041 61.015 62.1451 73.7581 75.686 Apr 728.1048 734.0041 888.479 902.4094 1019.501 1037.1853 6.6576 6.8315 56.673 60.8671 74.9081 76.865 May 727.5470 733.7890 855.950 868.8107 974.5222 991.1914 6.5335 6.7016 57.772 58.7413 71.1325 72.963 Jun 728.0604 733.9090 845.839 858.0462 961.6660 977.2435 6.5143 6.6838 54.484 55.5793 71.1643 73.016 Jul 727.3232 733.3667 845.584 858.6567 954.3714 968.4412 6.4311 6.5962 53.9240 54.9482 72.3716 74.229 Aug 728.1124 733.6978 834.501 849.1749 933.4997 947.8666 6.4562 6.6176 51.5368 52.4571 71.2285 73.009 Sep 729.9201 734.3306 843.874 859.3031 945.5432 961.2828 6.4101 6.5689 46.7103 50.1441 66.2171 67.857 Source: Reserve Bank of Malawi 1 Averages of daily rates quoted by the Reserve Bank for dealing with commercial banks in Malawi 20

Table 11: Malawi All Share Indices (1999=100) Period INDICES RETURN SHARE TURNOVER CAPITALISATION Domestic Share Index Foreign Share Index All share Index Dividend Yield Earnings per Share (Kwacha) Volume of shares traded Value (Malawi Kwacha) Value of shares issued (Malawi Kwacha) 2015 11,462.9 1,762.1 14,562.5 4.0 28.4 2,355,317,369 48,592,086,538.8 7,522,117.1 2016 10,456.9 2,026.1 13,320.5 5.2 42.8 410,895,390 6,196,059,036.9 8,516,542.4 2017 16,272.6 3,519.4 21,598.1 2.7 32.4 698,894,283 13,516,146,248.3 10,609,490.8 2016 Jan 11,365.60 1,762.13 14,440.24 4.0 28.4 2,795,087 99,852,436.20 7,516,892.89 Feb 11,225.08 1,762.13 14,263.58 4.0 28.3 1,830,916 106,507,786.33 7,509,345.98 Mar 10,554.04 1,762.13 3,419.95 6.1 45.7 5,067,001 89,521,602.30 7,473,305.73 Apr 10.109.50 1,762.13 12,861.07 6.0 45.7 54,962,804 528,512,298.00 7,448,932.42 May 10,072.19 1,762.13 12,814.18 6.0 45.0 30,578,347 302,536,644.07 7,446,930.72 Jun 10,320.33 1,762.13 13,126.13 5.9 45.0 5,499,723 160,580,210.34 7,460,245.29 Jul 10,523.46 1,762.13 13,381.50 5.9 45.0 9,822,509 79,415,164.70 7,471,145.06 Aug 10,424.86 1,762.13 13,174.36 5.9 45.0 42,384,723 985,792,369.78 7,462,303.95 Sept 10,793.84 2,026.07 13,744.12 5.2 45.0 29,146,377 520,695,844.27 8,525,541.22 Oct 10,824.35 2,026.07 13,782.48 5.2 45.0 2,601,165 331,416,056.34 8,527,178.17 Nov 10,103.29 2,026.07 12,875.85 5.2 45.8 38,318,065 1,385,112,183.47 8,497,260.46 Dec 10,456.92 2,026.07 13,320.51 5.2 42.8 187,888,673 1,606,116,441.14 8,516,542.43 2017 Jan 10,303.61 2,026.07 13,127.73 5.2 42.8 9,462,616 299,523,065.19 8,508,182.95 Feb 10,707.55 2,026.07 13,635.67 5.2 42.8 12,896,314 179,654,629.77 8,530,208.72 Mar 11,437.62 2,308.87 14,577.62 4.6 43.3 15,057,251 248,460,512.40 9,679,155.09 April 11,935.73 2,308.87 15,203.97 4.6 43.5 10,160,058 788,100,892.16 9,706,315.56 May 12,228.65 2,325.21 15,573.68 4.6 43.5 71,859,658 1,343,060,713.98 9,786,371.11 June 12,386.77 2,325.21 15,772.51 2.9 35.39 24,562,635 1,065,495,688.62 9,794,992.97 July 13,265.14 2,325.21 16,877.16 2.9 32.38 230,820,088 1,759,096,772.00 9,856,500.67 Aug 15,780.73 2,425.75 20,049.44 2.8 32.38 43,516,315 1,587,733,421.39 10,390,610.09 Sept 15,687.31 2,425.75 19,920.42 2.7 30.00 83,482,149 1,325,916,804.33 10,488,063.79 Oct 15,760.94 2,474.85 20,049.06 2.7 30.00 60,346,580 2,108,221,256.74 10,494,708.34 Nov 15,850.21 3,516.49 21,122.43 2.7 30.00 14,395,164 763,567,556.43 10,547,692.73 Dec 16,272.64 3,519.43 21,598.07 2.7 32.38 122,335,455 2,047,314,935.24 10,609,490.79 2018 Jan 16,692.97 3,673.87 22,223.44 2.7 32.38 36,519,356 1,318,037,153.35 10,661,816.40 Feb 17,535.66 3,706.12 23,182.59 2.6 32.38 245,801,275 7,696,394,315.30 10,827,425.44 Mar 18,009.73 5,197.43 25,286.79 2.3 32.10 39,059,770 1,133,690,674.34 12,435,390.30 Apr 18,158.46 6,743.62 27,092.17 2.3 51.62 80,903,126 3,676,838,010.81 15,654,624.25 May Jun Jul 19,436.22 20,033.47 20,513.69 8,201.57 8,237.82 8,237.32 30,043.03 30,736.95 31,263.14 2.2 1.8 1.7 50.89 6.66 6.45 265,730,032 6,468,082 13,787,978 10,613,139,506.1 213,441,483.83 590,259,713.23 16,006,955.25 1,370,739.23 1,385,750.21 Aug 21,145.76 8,237.32 31,956.43 1.7 6.45 43,722,958 3,009,473,246.19 1,416,480.06 Sep 21,621.84 8,138.23 32,373.19 1.2 6.45 27,090,165 3,758,351,970.38 1,434,953.37 Source: Malawi Stock Exchange 21