Five counters fuel equity market bullish trend

DAR ES SALAAM: THE domestic equity market sustained its bullish momentum last week fuelled by gains in five key counters.

According to Zan Securities Weekly Wrap Ups, the counters are namely SWIS as top gainer appreciated by 10 per cent to 1100/- per share and NICO by 8.82 per cent to 740/- per share.

Others are MBP that appreciated by 6.45 per cent to 330/- per share, DSE by 2.63 per cent to 2340/- per share and CRDB gaining 1.37 per cent to740/- per share.

This led to a 192bn/- increase in domestic market capitalisation over the week. On a year-to-date basis, the market gained 568bn/- in domestic market capitalisation.

“Trading activity has surged, driven by two consecutive weeks of price increases, which have significantly contributed to the overall market capitalisation growth,” said Isaac Lubeja, Zan Securities Advisory and Research Manager.

He said the fixed income market shifted towards off-the-run bonds due to a higher supply compared to recently issued bonds, which remain scarce.

“Looking ahead, we anticipate a decline in secondary market yields, driven by strong demand.

“For the upcoming 15- year Treasury bond auction, we expect a slight undersubscription however, demand is likely to be higher compared to previous auctions of similar tenure,” he stated.

He said the central bank is expected to take a pragmatic approach in allocating winning bids, with prices unlikely to fall below 98.5.

“Additionally, we foresee a shift towards the mid segment of the yield curve as yields begin to decline on the long end,” he noted.

Meanwhile, capital markets experienced a slowdown in equity trading for the week ending 28 February, with total equity turnover falling to 5.05bn/-, a 41.6 per cent drop from the previous week’s 8.66bn/-.

“While the decline is not surprising after the previous week’s heightened trading activity, it raises questions about whether the market is entering a temporary cooldown or if investors are recalibrating their positions ahead of further upcoming earnings releases, bond auctions and release of audited financials,” Alpha Capital Head of Business Development and Customer Service, Geofrey Kamugisha stated.

He said the decline in market-wide turnover, however, does not necessarily indicate a lack of investor confidence.

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Mr Kamugisha said this could rather be a sign of portfolio adjustments and capital reallocation as the market prepares for upcoming corporate earnings reports, the annual general meetings and dividend announcements and shifts focus toward the fixed-income segment.

“Despite the lower overall turnover, some counters registered notable price movements, signalling a dynamic market environment,” he added