DSE sees 65pc drop in turnover

DURING the trading week ending on September 20th, the Dar es Salaam Stock Exchange (DSE) saw a decrease in turnover compared to the prior week.

The total market turnover decreased to 1.027bn/-, reflecting a 64.88 per cent downtick from the previous week’s 2.926bn/-. There were no activities in the pre-arranged board for the week.

Throughout the week, CRDB dominated trading activities, representing 75.83 per cent of the total market turnover, followed by NICO at 9.97 per cent and NMB at 9.66 per cent. SWISS gained 10 per cent closing off the week at 1,100/- per share.

DCB appreciated by 3.23 per cent to reach TZS 160 per share at the end of the week.

However, NICO lost 1.39 per cent reaching 710/- per share and DSE share price decreased by 0.82 per cent concluding the week at 2,420/- per share. In terms of market capitalisation, there was a general increase in the size of the markets, with total market capitalization increasing by 0.66 per cent to 17.616tri/- by the week’s end.

Similarly, domestic market capitalisation increased by 0.02 per cent, reaching 12.226tri/-.

Key benchmark indices

•  All Share Index (DSEI) closed at 2,110.69 points increasing by 0.66 per cent.
• Tanzania Share Index (TSI) closed at 4,615.82 points increasing by 0.02 per cent.

Sector Indices

•  Industrial & Allied Index (IA) closed at 5,072.27 points, unchanged from the previous week
• Bank, Finance & Investment Index closed at 5,734.94 points, down by 0.013 per cent
• Commercial Services Index closed at 2,138.48 points, up by 0.2 per cent.

Vodacom rises dividend after Sh53.4bn profit Vodacom Tanzania PLC has approved a final dividend of 11/93 per share following a profit after tax of 53.4bn/- for the financial year ending March 31, 2024.

The dividend per share is an increase of about 20 percent compared to 9/95 paid during the previous financial year, according to the company statements.

The total payout, which represents half of the company’s profit after tax, reflects Vodacom’s dividend policy during listing on the Dar es Salaam Stock Exchange (DSE), in which it promised to pay at least 50 per cent of the earnings after tax to the share-holders.

The company held the Annual General Meeting (AGM) yesterday, with the shareholders approving the final dividend.

Highlights: Debt Market Primary market On September 18, 2024, the Central Bank was in the market to offer treasury bills to investors. The offerings included 900m/- for the 35-day maturity Treasury bill, 1.9bn/- for the 91-day T-bill, 2.9bn/- for the 182- day T-bill, and 120.45bn/- for the 364-day T-bill.

In this auction, demand was weak for the 35 and 182 whereas both the 35-day bill and 182-day bill did not receive any subscription. The 91-day bill received 263.8 per cent subscription and the 364-day bill received 64.68 per cent subscription rate from investors.

The 364-day bill saw an increase by 14.9 basis points in the weighted average yield, the weighted average yield being at 10.9783 per cent compared to 10.8293 per cent in the previous auction. The price floor was decreased from 90.1 to 89.8 as the central bank allotted less than what was offered in this auction. The inflation rate was recorded at 3.1 per cent in August.

Secondary market During the week ending on September 20th, market activities saw a decrease compared to the previous week. Overall turnover decreased by 59.45 per cent , from 94.9018bn/- to 38.4872bn/-.

Similarly, there was a notable decrease in the number of trades, rising from 158 to 71. Trading activities primarily focused on the long end of the yield curve, with the 20-year and 25- year bonds traded contributing to 99.45 per cent of the total turnover.

In the corporate bond segment, there was an increase in activity compared to the previous week.

NMB corporate bond NMB2022/25.T1 recorded two trades totalling 40m/- at an average price of 95/04. NMB corporate bond NMB-2023/26.T1 recorded one trade with a face value of 7.0m/- at a price of 87/40. CRDB corporate bond CRDB-2023/28.T1 recorded four trades totalling 53m/- at an average price of 92/50.

Outlook: The outlook for equities appears positive, especially as investors are likely to shift their focus from bonds to stocks with strong fundamentals. This reallocation is expected to be driven by rising bond yields, which make equities more attractive in comparison.

Additionally, the recent gains in banking stocks and the overall year-to-date return of 8.07 per cent on the TSI index suggest continued strength in the domestic equity market. As liquidity tightens in the money markets and yields rise, equities may benefit from increased inflows, particularly in sectors showing robust performance.

Overall, the equity market is expected to remain buoyant, with potential for further gains in the coming weeks.

In the debt market, tight liquidity in the money markets is expected to push yields higher. A shift towards equities with strong fundamentals will likely decrease demand for fixedincome securities. This reduced demand could lead to further pressure on bond prices, potentially driving yields even higher. In the coming weeks, we anticipate the one-year Treasury bill yield to exceed 11 per cent, while long-term rates are expected to stabilize around the 16 per cent mark.