Real Insurance set for MSE listing Sept. 29

The news did not come from the maternity wing. Neither is there any pregnant mother called Real Insurance now almost nearing that period of labour in a Malawian hospital. It is understandable: the child will not be born in the confines of the Chatinkha maternity wing at Queen Elizabeth Central Hospital. He- is it a man?- or she ( a woman?) will be born on the Malawi Stock Exchange ( MSE) on September 29, 2008.

The MSE will wear a new mark of a family that does not value family planning because, this boy or girl, but we know the name will be Real Insurance, will be the 14th. The mark of a stubborn family in this era of family planning and spacing.
Talking about spacing: Mr. and Mrs. MSE do not mind; this is the 14th child since its birth in 1996. And it has been productive ever since. By human standards, MSE was supposed to have 12 children- one each year. But, perhaps, some were twins, or whatever it is. Didn't an Egyptian lady bear eight recently.

Thom Kanyuka, Real Insurance Managing Director, told the media in Blantyre on Wednesday, that the listing of the company did not mean it was new on the Malawi insurance market. "We have been here even before Malawi's independence (in 1964), and will soon be clocking 50 years of operations in Malawi. That is why our holding company in Kenya decided that we should make an Initial Public Offer (IPO) to give chance to members of the public," said Kanyuka.

This means that members of the public will now be able to reap part of the profits they never laid their hands on before. Before the listing, Real Insurance was also not compelled to make public some crucial information, as it was privately-owned.

Real got locally registered in 2000, changed name from Royal insurance in 2007, and now takes a step further to get listed on the stock market- a process the company started early this year.

Real also runs other operations in Kenya and Tanzania. On offer are 35 per cent of the company's total shares. It is intimated that 31 per cent will go to members of the public, while 4 per cent will be up for grabs for the company's staff members.
National Bank of Malawi (NB) has been appointed receivers during the transactions, but the banking giant has sub-contracted Standard Bank to do part of the work.

Benson Jere, Investment and Financial Services Manager for NB, hailed the step to list Real Insurance on the stock market, saying it will help members of the public reap part of the company's fruits. This is because Real has registered profits for the past five years, only that these were going to the holding company in Kenya.

Jere also defended the initial offer of K2.30 per share, saying it reflected the true value of the company. Enterprise value of a company is arrived at by dividing the Intrinsic value of an entity by the actual value of the company's skeleton. But actual price is always plus, or minus, 17 per cent. This means that the K2 initial offer per share equals 17 per cent of Real Insurance's real value, according to Jere.

This child has come with a bang, and stoke brokers are excited. Ask Stockbrokers Malawi Limited Chief Executive Officer Mark Mikwamba.

"The development is really good. Sometimes there is liquidity on MSE, when people with shares don't want to sell them, and there are no shares to buy for those who wish them. The solution is to have as many companies listed on MSE because it brings flexibilities: provides an opportunity for people to invest and diversify their investment portfolio," said Mikwamba.

Malawian investors are changing from the money market (Reserve Bank of Malawi's Treasury Bills) to the capital market (Malawi Stock Exchange). The development has come about because, due to robust economic transformation the country has been experiencing since the Bingu wa Mutharika administration took over office on May 20, 2004.

Interest rates, that once hovered around 45 per cent before 2005, are now at a record low, forcing savers to look for other alternatives other than banks. Treasury Bills have also been hard to come by these days, prompting investors to look beyond the immediate cash and invest in the future. The future, is what Real Insurance promises to bring. What with a K150 capital portfolio.

Not only the future, says Mikwamba. "Hope too".