DAR ES SALAAM: THE Dar es Salaam Stock Exchange (DSE) is expected to experience a slowdown in market activity as the year draws to a close and the holiday season, especially Christmas, approaches.
The trading volume typically decreases during the holiday season and investors often take a step back, leading to reduced market activity. This slowdown is expected to continue as Christmas draws closer.
However, the Santa Claus rally—a seasonal market trend typically occurring in the last week of December and early January—could boost the DSE, as stock prices often rise due to increased consumer spending and investor optimism, with market participants hopeful for a positive shift as the year concludes.
Zan Securities Chief Executive Officer Raphael Masumbuko said yesterday the slowdown will be due to the potential impact of next month’s holiday season on consumer spending and retail-focused stocks
“While the holiday period generally boosts consumer activity, we foresee a possible reduction in stock inflows, which could exert downward pressure on the prices of related equities,” said Mr Masumbuko in his weekly wrap-up.
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The trend started to be noticed after CRDB Bank closed the last week as a top loser depreciating by 2.99 per cent to 650/- per share.
AFRIPRISE lost 2.13 per cent reaching 230/- per share, TCCL depreciated by 1.01 per cent closing off the week at 1,960/- per share and NMB went down by 0.93 per cent closing the week at 5,350/- per share.
Mr Masumbuko said “in terms of market capitalisation , there was a general decrease in the size of the markets.”
The total market capitalisation decreasing by 0.65 per cent to 18.258tri/- by the week’s end. Similarly, domestic market capitalisation decreased by 0.64 per cent, reaching 12.209tri/-.
On fixed income, the Zan Securities CEO said, they
expected the 20-year Treasury bond auctioned yesterday to face undersubscription.
“Demand is likely to weaken as investors shift their focus toward holiday spending, leaving less liquidity for investment,” Mr Masumbuko said.
This drop in demand, he said, may lead to higher yields in the primary market, with aggressive bids potentially targeting rates around 15.8 per cent compared to the anticipated 15.65 per cent.
Additionally, throughout the week, CRDB dominated trading activities, representing 50.37 per cent of the total market turnover, followed by NMB at 46.57 per cent and NICO at 0.71 per cent.
