In the past few years, different countries, especially in developing countries have been asking their citizens to invest in financial assets. The intention behind the request is to enable people in these countries to grow their investments and get returns or dividends.
From an institutional point of view, many of these investment companies reinvent the capital into developmental and infrastructure projects within the country itself. This not only helps improve the overall economic resources in the country but also allows for considerable employment generation.
In this article, we look at a new financial organization in Malawi, FDH Bank, and listen to what its founder, Dr. Thomson Mpinganjira has to say about investments and the bank.
FDH Bank in Malawi: What is it?
FDH Bank in Malawi has issued to citizens an initial public offering of shares in the bank representing a 20% total stake in the business. The shares went on sale in August 2020 at an individual price of MK10.
A year prior to the offering, the founder of FDH Bank Dr Thomson Mpinganjira began encouraging citizens to start saving to be able to take advantage of a unique opportunity to own the bank, which is a subsidiary of FDH Financial Holdings Limited.
During the first day of trade, the price of the shares rose by 50%, giving each share value of MK15.
The listing of FDH Bank on the Malawi Stock Exchange formed part of an agreement between the bank and the government that has been in place for several years. FDH acquired an 80% stake in Malawi Savings Bank in a deal which included the contractual obligation to list FDH Bank on the MSE.
What are the Objectives of the Local FDH Bank?
One of the objectives of the stock exchange in Malawi is to empower citizens through the distribution of wealth. The FDH listing provides a unique opportunity for investors to own part of the bank. The rapid rise in share prices on the first day of the listing suggests this will be a profitable venture for the bank and for its new investors.
FDH Bank is now 4.75% owned by the Malawi government, 1.2% owned by employees as part of the Employee Share Ownership Scheme, and 74.05% owned by parent company FDH Financial Holdings.
The 20% now owned by the public is comprised of 41 institutional investors and 2,807 retail investors, owning over 1.38 billion shares collectively. Investor confidence is currently high after the successful IPO.
Should you invest your earnings in FDH Bank Malawi?
One important thing, which needs to be pointed out that the higher management of FDH Bank is astute financial experts who only invest in high growth sectors. This means that the investment of the people is not only safe but are also returning higher dividends.
The majority of the investments are coming from institutional investors, which means that they see a lot of promise and security for their investments. The bank is encouraging retail investors to come forward and examine the investment structure and find out about the institution in greater detail.
There is no doubt that FDH is one of the best financial investments people can make in Malawi. The bank states that people who are looking for both long-term gains, as well as short term growth, can invest without any issues in the bank.
The Final Word
It is important for any developing country to invest in its own resources and create its own assets and infrastructure. This will help them become self-sufficient and independent in many ways. This will also reduce dependence on foreign companies, who might be looking for exploitative opportunities.