DSE rule changes reshape market landscape
DAR ES SALAAM: DAR ES SALAAM Stock Exchange reforms have reshaped the market, reviving dormant counters as dividend momentum and strong turnover lifted key equities just ten days after implementation.
Investors are adjusting to a revised trading structure that tightened price caps, adjusted tick sizes and introduced stricter identity verification requirements. Zan Securities Advisory and Research Manager Isaac Lubeja said the momentum seen since the rule changed is expected to continue in the coming weeks.
“In the weeks ahead, we maintain a positive outlook for the equity market, supported by strong turnover growth and dividend-driven sentiment,” said Mr Lubeja at weekly wrap up on Tuesday.
Mkombozi Commercial Bank (MKCB) led the gainers, surging 18.99 per cent to 940/- per share, followed by NICO with a 12.35 per cent rise to 910/- at the start of the week. Tanzania Portland Cement Company (TPCC) climbed 9.09 per cent to 4,800/- and TOL Gases closed the week 9.68 per cent higher at 340/-.
CRDB Bank remained the most active counter, while block trades in NMB Bank and TBL contributed significantly to overall turnover. But the biggest story was VODA, which tumbled 15.58 per cent to 650/-, at the closing of last week, its first price movement since 2020. “With the new rules now allowing investors to sell their VODA shares, this development will be important to monitor going forward,” said Mr Lubeja.
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Voda yesterday continued its downward trajectory, approaching its intrinsic value, closing 4.0 per cent lower at 600/-. Precision Air (PAL) dropped by 10 per cent to 360/- and Mwalimu Commercial Bank (MCB) declined 3.45 per cent to 280/-.
Despite the pressure on a few large caps, domestic market capitalisation increased by 0.649 per cent to 13.164tri/-, while total market cap edged down 0.52 per cent to 19.609tri/-.
Effective June 2nd, the DSE introduced sweeping changes to its trading rules. The minimum block trade value was raised from 200m/- to 250m/-, while tick sizes were simplified to two tiers 5/- for stocks under 1,000/- and 10/- for those at or above that level.
“These reforms are designed to deepen liquidity, enhance transparency and modernise market infrastructure in preparation for greater institutional and region wide participation,” said Geofrey Kamugisha, Head of Business Development and Customer Services at Alpha Capital.
Other updates included revised price cap limits, a volume-weighted closing price formula and citizens are now also required to use their NIDA number for Know Your Customer verification, replacing other forms of ID.
“Price movement boundaries have been revised, tightening the allowable range for price fluctuations in a single trading session,” Mr Kamugisha said, noting that the reforms align DSE with international standards.
The reforms appear to be having an early impact.
Vertex International Securities, Advisory and Capital Markets Manager Ahmed Nganya said last week’s market statistics echoed their forecast as domestic investors continued to drive the market. “We have seen some activity on counters which were less active as new DSE trading rules came into play.
“We forecast this week’s momentum to continue next week as we anticipate some activity on small companies’ counters,” Mr Nganya said.
