New Report on Listed MFIs’ Stocks’ Performance and Implications for Shareholder Valuations – from WSAS
Press Release from Wall’s Street Advisor Services (WSAS) -
Microfinance Institutions (MFIs) are expected to increasingly approach the public stock markets to raise equity capital and to provide entry and exit points for investors, with SKS Microfinance (India) providing the most recent example of this.
But, listing shares for public trading opens questions about how such shares are to be valued and how MFI shareholder value should be measured. WSAS has released a new report, “Listed Microfinance Institutions’ Shareholder Valuations and Their Stocks’ Results”, which looks into this subject.
The report looks at the share price performance for 4 major listed MFIs – Compartamos and Financiera Independencia from Mexico, Equity Bank from Kenya, and SKS Microfinance from India – and compared these to their WSAS MFI Shareholder Value Index series’ valuations (WSAS MFI SVIX series).
The report also investigates the historic liquidity of the stocks and the implications of limited liquidity for determining valuations, especially for indexes where many constituents don’t have public markets.
The report concludes that while the MFIs’ public share price movements have been generally good, trading activity is generally thin and erratic and public prices therefore may not be reliable sources of valuations.
To date, WSAS has launched the MFI SVIX 2005, MFI SVIX 2006, and the MFI SVIX Composite, with results through end-2008. Plans are to add MFI SVIX series for 2007, 208, and 2009 Investor Vintages in coming months, as well as to up-date all the annual Investor Vintages’ results for MFIs’ 2009 and 2010 financial results, as these become available.
Executive summaries of the results for the WSAS MFI Shareholder Value Indexes for Investor Vintages 2005 and 2006, and a WSAS MFI SVIX Composite, can be seen for free at the WSAS website, www.wallsstreetadvisorservices.com/the_wsas_mfi_shareholder_value_index_series. A formal Methodology paper is also available there.
Detailed reports, including results by MFI, are for sale from WSAS. For more information, please contact WSAS at email@example.com.
Note for Editors: about Wall’s Street Advisor Services (WSAS)
WSAS is a small consultancy specializing in innovations in financial information services, for emerging markets and socially responsible investing. Founder and CEO Peter Wall has over 20 years’ experience in developing and marketing financial information services with International Finance Corporation (IFC), FTSE International, and most recently, Microfinance Information Exchange, Inc. (MIX).