Banks to lead Dar exchange post-Easter trades

DAR ES SALAAM: DAR ES SALAAM Stock Exchange (DSE) trading is expected to be driven by banks this week, following the Easter long holiday, as investors focus on selective stock picking and fixed income instruments.

While the equity market lacks immediate catalysts for a broad rally, underlying macroeconomic strength and sector-specific resilience suggest any recovery will be gradual and led by fundamentally strong counters.

The Zan Securities Advisory and Research Manager, Mr Isaac Lubeja, said yesterday that DSE appears to be entering a consolidation phase, where activity is likely to remain subdued in the short term as investors adopt a cautious stance.

“In the coming weeks, trading activity is expected to remain concentrated in a few liquid counters, particularly within the banking sector, with names like CRDB, NMB and TBL continuing to anchor overall market liquidity,” Mr Lubeja said.

Last week, total turnover fell sharply by 29.5 per cent to 21.99bn/- from 31.18bn/- the previous week, as both local and foreign investors took a conservative approach.

Also, the week before Easter holiday, the banking stocks remained the key drivers of market liquidity, with CRDB alone accounting for more than half of total turnover, followed by TBL, NMB, and the DSE itself.

The sharp decline in turnover and volumes, said the manager, alongside continued, albeit reduced foreign outflows, suggests that the market is still searching for direction.

“Foreign investor participation will remain a key variable to watch,” Mr Lubeja said, “while outflows have moderated significantly, they have not yet reversed into inflows”.

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He said a sustained return of foreign capital could act as a catalyst for renewed momentum, particularly in largecap banking stocks.

“Until then, local institutional investors are likely to remain the dominant drivers of market activity, but with a more selective and defensive approach,” Mr Lubeja said.

At the index level, downward pressure may persist, especially on the Tanzania Share Index (TSI), given its sensitivity to domestic counters and foreign investor behaviour.

However, the resilience observed in the Industrial & Allied segment could provide some support, creating pockets of opportunity in fundamentally strong stocks, even as the broader market remains range-bound.

Last week, the DSE All Share Index declined 1.46 per cent to 3,840.34 points, while the TSI fell 2.14 per cent to 8,455.82 points.

Sectoral indices diverged, with the Industrial & Allied Index rising 0.47 per cent even as the Bank, Finance & Investment Index and Commercial Services Index dropped 3.01 per cent and 3.50 per cent respectively.