DSE rallies behind pre-arranged trades

Trading activities on the Dar es Salaam Stock Exchange (DSE) observed a substantial surge in turnover during the trading week concluding on June 16.

The aggregate turnover for the week stood at TZS 4.728 billion, signifying a remarkable increase of 91.56 per cent compared to the preceding week.

This notable rise can be ascribed to pre-arranged transactions carried out within the week. The overall sentiment of the market was characterized by a blend of positive and negative factors, resulting in a contraction of the total market capitalization and a slight expansion in the domestic market capitalisation.

Prominent stocks in terms of trading volume for the week were TBL, CRDB, and TCCL/Tanga Cement, commanding 82.9 per cent, 13.94 per cent, and 1.11 per cent of the total market turnover, respectively. Pre-arranged trades involving 350,000 and 280,000 TBL shares were executed at an average price of TZS 6,000 and TZS 6,500 per share respectively, making a significant contribution to the overall turnover for the week.

TCCL led the gainers by registering a 6.98 per cent upsurge in price closing at TZS 1,840 per share, CRDB bounces back after weeks of losses registering 2.25 per cent uptick closing off the week at TZS 455 per share

DCB was the sole looser for the week losing 9.09 per cent of its value to end the week at TZS 150 per share.

In terms of market capitalisation, the total market capitalization fell by 0.3 per cent, totalling TZS 15,296.12 billion, whereas the domestic market capitalization experienced a growth of 0.3 per cent, reaching TZS 10,868.45 billion by the conclusion of the week.

Key benchmark indices

  • All Share Index (DSEI) closed at 1,834.31 points decreasing by 0.30 per cent.
  • Tanzania Share Index (TSI) closed at 4,107.97 points increasing by 0.30 per cent

Sector Indices

  • Industrial & Allied Index (IA) closed at 5,109.32 points, up by 0.13 per cent.
  • Bank, Finance & Investment Index closed at 3,980.09 points, up by 0.78 per cent.
  • Commercial Services Index closed at 2,155.32 points, unchanged from previous week

Debt Market

Primary market

On June 14, 2023, the central bank was in the market offering treasury bills to investors. The offerings consisted of TZS 9.9 billion for the 35-day maturity Treasury bill, TZS 19.9 billion for the 91-day T-bill, TZS 69.9 billion for the 182-day T-bill, and TZS 77.2 billion for the 364-day T-bill.

Same as in the previous auction the 35-day maturity bill did not receive any subscription in this auction. The 91-day maturity bill also did not receive any bids from investors while the 182-day bill garnered 34 per cent subscription. On the other hand, the 364-day bill, as in all auctions since the beginning of the year, was oversubscribed. This time, it was subscribed by 121 per cent.

Despite being undersubscribed, the central bank accepted all the amounts tendered in the 182-day maturities as a measure to reduce excess liquidity. To facilitate this, the price floor for the 182-day bill was lowered to 97, resulting in average yields in this maturity reaching 5.81 per cent, highest levels observed in the past five years. In the 364-day maturity, the central bank has taken a different stance compared to all the auctions held this year.

Unlike other auctions, it has accepted less than the amount it originally offered. The price floor has been to previous levels of 93.28. The weighted average yield decreased by 8 basis points to reach 7.14 per cent, down from 7.22 per cent in the previous auction. The central bank might be limiting yields in this maturity from going further and strike a good balance between inflation rates and borrowing rates.



The Tanzania Share Index (TSI) ended its downward trend as it rebounded by 0.3 per cent to close at 4,107.97 points, adding TZS 32 billion to the domestic market capitalization as it mirrored the upward movement. Indicative of our previous highlight where we anticipated an imminent slight rebound in equities as the market stabilizes following dividend payments, which will facilitate inflows into certain stocks.

In the short term, we expect a shift in investor preferences towards fixed income securities, driven by the upcoming auctions for 20-year and 25-year treasury bonds scheduled on June 21st and 28th respectively. This transition is likely to gain momentum, particularly due to the central bank’s adoption of a less accommodating monetary policy, leading to an upward trajectory in fixed income yields.

In the macro-economic context, the central bank released the Monetary Policy Statement for the fiscal year 2023/24, key issues raised is the duality of the monetary policy framework for 2023/2024 where in the first half will be in line with the current monetary targeting framework but will be switched to interest-rate based framework in the second half of the year.

This has been proposed to address: (i) the weakening of the link between money supply and the ultimate policy variables (inflation and output) due to the proliferation of financial innovations, and (ii) the weakening of monetary policy transmission under the monetary targeting framework 2023/2024 Policy targets have been revised slightly compared to 2022/2023.

Mr Masumbuko is a Chief Executive Officer of Zan Securities—a capital markets and securities authority licensed dealer and a member of the DSE.

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