Malawi Stock Exchange

I recently bought some shares on the Malawi Stock Exchange (MSE). I wanted to do a little research to see how it is regulated.  The MSE started in 1996. The MSE is regulated by the Capital Markets Development Act of 1990 (Cap 46.06). Some of the rules are available on the MSE website.  A Securities Act is also in the process of being formally passed.

In general, the laws are extensive enough to set up a functioning Exchange. 13 companies are currently listed. Malawi is still very poor. When I visited the MSE this past summer the CEO described it as a frontier exchange. That does seem accurate. As it grows it and the other financial infrastructure dose as well, there will need to be more regulation. 

Recently also, the International Bar Associations’ Human Rights Institute (IBAHRI) released a Rule of Law analysis of Malawi. The aim of the report was to assess the state of the rule of law in Malawi. Emphasis was placed on assessing the independence of the judiciary and the legal profession. I think that it is a positive that the IBA attempts these kinds of missions but the report did, as usual, seemed skewed to push the donor agenda of making African countries more Western. Part of the review was to criticize Malawi for its enactment of a law criminalizing homosexuality. I have been to several IBA meetings and it has always been my impression that it serves the interests of large well funded law firms and organizations. It always touts the standard line. The report did draw attention to the 2011 unrest in Malawi and the death of a student activist critical of the government.   

Malawi currently has some inflation and growth has slowed. The outlook is for continued slowing. I have always been a contrarian investor. I like buying equity which can perform well even in weak economic conditions.

CASE Handbook now online

The Central African Stock Exchange handbook is now available for download.
The website is nifty and full of interesting info.
The handbook can be downloaded for a fee.

Social impact investors and Boards

Social impact investors put their investment 'dollars' to work for an educational, environmental, social and essentially public good purpose. Social stock exchanges and boards brings those investors to socially conscious businesses that want to raise capital.

In addition to the recently started but not yet LIVE Social Stock Exchange in London, another social investment board has launched. In partnership with the Stock Exchange of Mauritius, the iX, or Impact Exchange has launched a board to help companies who have a social purpose, and not simply a profitable purpose, to raise cash.

All of this raises the issue of who qualifies as a social company and how do we know once we buy shares that they will remain social? Oh, they are waaaay ahead of us. There are verification agents and audits, as well as ongoing reporting requirements.

This is not a new concept. Companies can do green audits, why not social audits. Of course, these are an additional cost. We pay more for organic, locally grown, specially made healthy for us and society goods. Being socially, environmentally conscious costs more. Some companies can afford that additional cost to attract that impact investor. Some companies cannot.

Here is where I get stuck. Anecdotally, its the small to medium enterprise from the developing world who cannot afford those additional costs to be green and responsible. Here is the kicker, the founders of iX plan to ask development agencies to assist them in defraying the costs of some of these audits. What do the economists call this...rent seeking? I hope I got that right. It is just another layer of cost and bureaucracy, job security for some, and all acceptable because we are investing in a sustainable future.

These ideas and concepts are not harmless. Exchanges make money and impact investors cannot get around that. Also, impact investors should be responsible for the companies they put OUT of business in favor of others that can afford the audit, impact verification and reporting requirements.  

Any data driven researcher out there that wants to help me find the proof please call me!
   
   

Socially responsible investing

This is my favorite topic next to investment in Africa, in fact it is related.
I strongly believe that Socially Responsible Investment in the developed world is very bad news for the developing world. I jsut have not had time and the data to prove it.

There is anecdotal evidence but I need hard data.
In any case, London has promised to establish a Social Stock Exchange in 2013. 

I will watch with interest its development which I am SURE will be amazing for resource laden companies in a position to take advantage of social do-gooders and RUBBISH for companies in the developing world where they are intending to do the most good: the bottom of the pyramid as they like to say.

Hopefully, I can spend some time on this this year.

SADC Tribunal Summer 2012

The SADC Tribunal is still not in session. here is an excellent recap of the history and current status of the SADC Tribunal and its nullification by SADC.

Apparently, new efforts to control land are in the new draft Zimbabwe Constitution. Ben Freeth  is pursuing an appeal to the African Commission on Human and People's Rights. It registered  an application brought by Ben Freeth and another dispossessed Zimbabwean farmer, Luke Tembani, to be heard by the African Court on Human and People's Rights. They seek an order from the Court that will require the SADC Summit to reinstate the Tribunal.   


I think in life, just as in law, time is of no consequence. You hope to outlive your claim but you may not. The important thing is to persevere, whatever that means.


I respect the Campbell and Freeth dispute because they seem willing to die for what is right. Many peole the world over do this. Let's not diminish the effort of these men and women because they are white and living in Zimbabwe. That is intellectually dishonest. 


Instead,  honor their effort to work within the system, however flawed. We women have been doing that, universally, for years.


Shame on you for letting race cloud your insight.


These men and women are civil rights activists just like those in America in the 1960's. 
Honor their sacrifice just like the sacrifice of their black brothers in Zim who threw out the British.


Yes, let that bake your noodle for a bit.


        

Inequality

Joseph Stiglitz is promoting a new book called The Price of Inequality. Here is his interview in the Rolling Stone. He also recently had an interview in Vanity Fair as well.

He is trying to sell a book but what he has to sell is very compelling. My main interest is Education as the go to for government cuts. In California, they have no compunction for cutting Education.

I was in Hollywood recently and learned more about Proposition 38 which is trying to make some corrections to the mistakes from the past cuts in Education. This is the core of the US inequality problem: cutting funding to education. If our children are not our future who/what is??? And yet education is cut first and deep.

This is a good blog on poverty and inequality in the US. My personal observations are this: People continue to lose their houses and jobs here. It is really difficult to find a job and we all rejoice when someone does find one. And the costs of education continue to rise.

The biggest crime is that the cost of education goes up and there is no way students can pay so their parents pay for tuition even when they cannot afford it. And those kids NEED the degree to get a decent job. Everyone has moved back in with their parents.

How can the US run around the world and tell everyone else how to run their economy??
I do not know the answer to that.    

Spain is not Uganda

The London Stock Exchange is partnering with African Banker magazine and Springwood Capital to hold the African Debt Capital Markets Summit on London this week. The Minister of Finance of Uganda is one of the speakers.  

The title of this post refers to statements in the keynote speakers address as well as comments about the Euro zone's difficulties that have been flying back and forth.