DAR ES SALAAM Stock Exchange (DSE) demonstrated declining trend last month characterised by a 49.8 per cent reduction in market turnover.
According to Exodus Advisory Monthly Market report for July this year, the decline can be chiefly attributed to a diminished appetite for stocks owing to the unveiling of earnings reports and dividend disbursements.
Simultaneously, the aggregate market capitalisation experienced a marginal contraction of 0.99 per cent, concluding in a total capitalisation of 14.86tri/- by the close of the month.
The domestic market capitalisation witnessed a marginal uptick of 0.28 per cent over the same interval.
This movement stemmed from the decline in the value of cross-listed shares subsequent to corporate actions, coupled with the appreciation of local shares following the release of semi-annual financial statements.
Similar to the market cap performance, all share indexes declined from 1,800.04 to 1,782.24 points while the Tanzania share index increased by 0.28 per cent.
This indicates that the cross listed counters recorded a negative performance in the period while local listed counters had a positive performance.
The banking sector recorded the lowest performance where the Banking sector index inclined by 0.10 per cent.
However, Industrial & Allied and Commercial services recorded a positive performance growing by 0.39 and 0.27 respectively.
Locally, SWIS recorded the highest appreciation of 9 per cent followed by NICO (6 per cent), TICL (3 per cent) and TPCC (3 per cent). On the other hand, DSE recorded the lowest performance falling by 6.52 per cent followed by TOL (4.62 per cent).
Generally, the local market has experienced an upward trend due to the release of semi-annual reports by domestic companies.
As a result, there is an ongoing anticipation that investors will decide whether to sell their investments or hold onto them for the foreseeable future.
Many companies listed on the stock exchange have shared their semi-annual financial reports, providing a detailed view of their performance in the first half of the year.
Among these firms, a consistent trend has emerged, showing impressive growth across important financial measures during this period.
This growth is seen across multiple aspects of these companies’ financial frameworks, indicating a robust and forward-moving economic development throughout the assessed timeframe.
There is an expectation of a reduction in market activity as companies have completed their financial reporting.
Many stock prices have decreased due to the distribution of dividends. This might lead to a shift towards the fixed income market.
As the market shifts away from the equities market, demand for fixed income securities is expected to rise continuously. The upcoming auctions include the 25 years Treasury bonds. This bond is expected to trade at a discount.
“Due to lower demand for the other tenors, we expect the central bank to continue accepting significantly more bids than amount tendered which may lead to oversubscription of the bond,” stated the report.
