As trading kicked off today, Airtel stock price dropped by 6.16% to MK80.01, while TNM plc edged down 0.05% to MK19.98 despite both telecommunications firms releasing positive FY2024 trading statements. In the published statements, Airtel projects a Profit-after-Tax(PAT) between MWK 43.1 billion and MWK 47.7 billion, representing a growth of 380% to 409% from the previous year. Meanwhile TNM expects its Profit-after-Tax(PAT) to be between MK8.14 billion and MK9.11 billion highlighting strong performance in a challenging economic environment.
Our analysts attribute the decline to ‘investor caution’ regarding the companies’ exposure to exchange rate losses, a recurring challenge for the telecom sector in Malawi. The 25% and 44% currency devaluation that happened in 2023 significantly impacted operational costs, and concerns linger over the firms’ ability to mitigate similar risks in the future.
The selloff may also reflect profit-taking by investors seeking to lock in gains, as well as broader uncertainties tied to macroeconomic conditions, such as inflation and forex volatility.
While the fundamentals of both Airtel and TNM may seem solid for now, market sentiment suggests investors are awaiting clearer indications of sustained resilience against these external pressures.
