How to buy shares in Malawi: a beginner's guide

If you have ever wondered how people in Malawi come to own part of a bank, a brewery or a telecoms company, the answer is shares. This guide explains what a share is, how the Malawi Stock Exchange works, and the steps most people follow to buy shares in Malawi. It is written for complete beginners, so there is no jargon you need to know before you start.

What a share is

A share is a small piece of ownership in a company. When a company wants to raise money to grow, it can divide its ownership into many equal parts and sell some of them to the public. Each part is a share. If you buy one, you become a shareholder, which means you own a small slice of that business.

Owning shares can reward you in two ways. First, the price of a share can rise over time if the company does well and more people want to own it. If you sell for more than you paid, the difference is your gain. Second, some companies pay part of their profits to shareholders as dividends, usually once or twice a year.

Neither is guaranteed. Share prices can fall as well as rise, and a company can cut or stop its dividend. You could get back less than you put in. For a fuller explanation, read our guide What is a share?.

The Malawi Stock Exchange

Shares in Malawian companies are bought and sold on the Malawi Stock Exchange (MSE) in Blantyre. A stock exchange is a regulated marketplace where buyers and sellers of shares are matched, and where prices are set by supply and demand.

The MSE was set up in the 1990s and is regulated in Malawi under the country's securities laws, with oversight from the Reserve Bank of Malawi. Companies listed on it must publish financial results and follow disclosure rules, which helps investors make informed decisions.

The companies listed on the MSE come from several parts of the economy, such as banking, insurance, telecoms, agriculture and consumer goods. The exchange publishes a list of listed companies, daily prices and index levels on its website. You can learn more in our beginner's guide to the Malawi Stock Exchange.

How buying shares works in Malawi

You cannot walk into the stock exchange and buy shares yourself. Trades on the MSE are placed through licensed stockbrokers, firms that are authorised to buy and sell on the exchange on behalf of their clients.

The usual process looks like this:

1. Choose a licensed stockbroker. The MSE website lists the brokers that are authorised to trade on the exchange. Check that any firm you use is on that list.
2. Open an account. You will normally need a national ID or passport, proof of address and a bank or mobile money account for payments. Your shares are recorded electronically in your name in a central depository, rather than on paper certificates.
3. Fund your account. Send money to the broker by the method they accept.
4. Place an order. Tell the broker which company you want to buy, how many shares and the most you are willing to pay per share.
5. Wait for the trade to settle. Once your order is matched with a seller, the shares are moved into your name and the money is paid to the seller. This can take a few working days.
6. Keep track of your investment. Your broker will send statements, and companies send news and dividend payments to registered shareholders.

What it costs

Buying shares is not free. Before you place an order, ask for a full list of charges. Common costs include:

• Brokerage commission, a fee charged by the broker on each buy and sell.
• Exchange and regulatory levies added to each trade.
• Taxes, such as tax on dividends, which may be deducted before the payment reaches you.
• Account or custody fees, if your provider charges them.

Small costs matter more when you invest small amounts. A fixed fee on a small order can take a large share of what you put in, so always work out the total cost before you confirm.

Things to check before you buy

Buying shares is a long-term decision. A few questions to ask yourself first:

• Do I understand the company? Read its latest annual report and results. Know how it makes money.
• Can I leave this money invested? Share prices move up and down. Money you may need soon, for school fees or rent, is usually better kept somewhere you can reach it quickly.
• Am I spreading my risk? Putting everything into one company means one bad year can hurt you badly. Many investors hold several companies or use funds. Our guide to ETFs explains one way to spread risk.
• Is my provider authorised? Only use firms you can verify. Be wary of anyone promising fixed or guaranteed returns from shares, which no honest provider can promise.

Starting with Ziki

Ziki is a simple way to start investing in shares from your phone. You can sign up in the app, verify your identity with an ID and a selfie, and pay in kwacha with Airtel Money or TNM Mpamba, or send USDC. Every fee and exchange rate is shown on screen before you confirm, and every payment needs your PIN.

If you are new to investing, Ziki also has short lessons and a practice mode with virtual money, so you can learn how buying and selling works before you use real money. Read how funding works in our guide to investing with mobile money in Malawi, or see how Ziki works on our home page.

Key points

• A share is a small piece of ownership in a company. Its value can rise or fall.
• Shares in Malawian companies trade on the Malawi Stock Exchange in Blantyre.
• Trades on the MSE go through licensed stockbrokers, and your shares are held electronically in your name.
• Check every fee and tax before you buy, especially on small amounts.
• Only invest money you can leave invested, and spread your risk across more than one company.

If you would also like to own part of companies outside Malawi, read how to invest in US stocks from Malawi.