DSE heads to Santa Claus rally

DAR ES SALAAM : DAR ES SALAAM Stock Exchange (DSE) seems heading to a Santa Claus rally as share prices for local firms are in a bullish trend.

A Santa Claus rally is phenomenon that describes a tendency for the stock market to go up by around 2.0 per cent over the period spanning the last five trading days of the outgoing year and the first two trading days of the incoming one.

The stock analysts have it that, investors’ appetite is being pushed by pleasing domestic listed firms’ performance as demonstrated in quarter three.

Vertex International Securities Advisory and Capital Markets Manager, Ahmed Nganya, told Daily News on Tuesday that some high-value stocks, especially banks, are becoming cheaper giving a huge buy opportunity to institutional investors

“With the way prices are moving, we think they are opening up for a pick-in activity in late December and early next year.

“We are of the opinion that some high-value stocks, especially bank stocks are becoming cheaper giving a huge buy opportunity to institutional investors,” Mr Nganya said when asked about a possible Santa Claus rally.

Zan Securities Chief Executive Officer Raphael Masumbuko said in the recent week the market activities increased in relation to turnover and domestic capitalisation pushed by the third-quarter financial reports.

“Looking ahead,” Mr Masumbuko said, “the recent release of 3rd quarter reports will solidify year-end estimates further propelling stock prices upwards and are expected to maintain favourable valuations in the coming weeks”.

Vodacom Tanzania, the only listed telecom in the country, yesterday said its net profit increased by 2.1 per cent to 29. 62bn/- in the six months to September from 29.01bn/- similar period last year.

“This encouraging growth was delivered as a result of good performance in our strategic revenue drivers – data and M-Pesa,” Vodacom said in the report. Its service revenue grew 18.7 per cent to 602.7bn/-.

In this year’s third quarter, in total the net profit of the banks was at 1.15tri/- up from 863.94bn/- recorded similar period last year. The two largest banks, in terms of balance sheets, CRDB and NMB are listed on the bourse, plus five others.

Tanga Cement’s price increased by 4.17 per cent to 2,000/-, resulting in a year-to-date return of 81.8 per cent, reflecting substantial volatility in the last two years due to the acquisition deal’s various hurdles.

“The price movement was driven by retail shareholders speculating on the potential proposal price of 2,440/-,” Zan Securities said in its weekly market wrap-up report.

Alpha Capital Head of Research and Analytics Imani Muhingo said the market anticipates further communication from the companies since Scancem, the buy of Tanga Cement, has yet to table a proposal for retail shareholders.

“It remains unclear when Scancem will present the proposal to retail shareholders, given their now majority ownership of two listed competitors operating in the same sector,” Mr Muhingo said.

Throughout last week, the counters that saw significant trading activity included TCCL, CRDB, and NMB, accounting for 99.42 per cent, 0.38 per cent, and 0.12 per cent of the total market turnover, respectively.

Conversely, closed-end funds faced challenges during the week, with NICO experiencing a 3.3 per cent decline to 435/-, while TICL, with its open rights’ issue window, closed the week down by 10 per cent to 225/-.

“The price of TICL appears to be stabilising post the book closure for participation in the ongoing rights issue,” Mr Muhingo said.

In relation to market capitalisation, there was a slight decrease of 0.23 per cent to close the week at 14.603tri/-. Conversely, the domestic market capitalisation experienced a slight gain of 0.02 per cent, with a closing value of 11.435tri/-.

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