DSE share prices walk to normal after dividends

Dar es Salaam Stock Exchange (DSE) is anticipated to return to equilibrium for the equity prices after the dividend payments period ends.

The bourse saw the escalation of share prices following stellar performance demonstrated by some companies last year.

Zan Securities CEO Raphael Masumbuko said investors are expected to shift their attention to the debt market, especially the coming 25 years Treasury bond.

“We anticipated an imminent slight rebound in equities as the market stabilises following dividend payments,” Mr Masumbuko said in the firm’s weekly market wrap-up, “which will facilitate inflows into certain stocks”.

The CEO said on Monday, in the short term, they are expecting a shift in investor preferences towards fixed-income securities, driven by the upcoming 25-year Treasury bond auction scheduled tomorrow.

“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,” Mr Masumbuko said.

The Bank of Tanzania (BoT) is expected to maintain this less accommodating approach in the near term, with a focus on maintaining low inflation levels.

Nevertheless, the Tanzania Stock Index (TSI) experienced a movement in the week ending last Friday which resulted from four domestic counters. Among the four counters, two were gainers while two were losers.

CRDB Bank and National Investment Company Ltd were gainers of the week after appreciating by 3.30 per cent and 1.19 per cent respectively. “The price of CRDB took a surprise turn after dividend payments where the general expectation was that the price shall remain suppressed for a while before gaining momentum from periodic performance announcements,” Mr Imani Muhingo, Head of Research and Analytics at Alpha Capital said.

The counter closed the week at a price of TZS 470/- per share from 455/- last week, but was trading at 560/-during cum dividend period.

NICOL is already 30.8 per cent up since the beginning of the year and 6.25 per cent up in the month of June alone.

The major driver of the price of NICOL is the expectation of a handsome dividend considering a more than 50 per cent profit growth last year.

The drivers of the NICOL price are mostly retail investors who wish to reinvest their dividends received from CRDB and NMB, while expecting another payout from Twiga Cement at the end of the current week.

On the other hand, the top losers were Tanga cement and Maendeleo Bank which lost 6.52 per cent and 2.78 per cent respectively.

“The decline of TCCL (Tanga cement) is an adjustment from the previous rally which followed the

government’s support of the acquisition deal,” Mr Muhingo said in the firm’s Financial Market Digest.

The price of Tanga cement was already up 56.36 per cent since the beginning of the year but down 9.47 per cent to 1,720/- in the month of June, eating up the gains garnered last month.

Vertex International Securities Advisory and Capital Markets Manager, Ahmed Nganya said in the firm’s weekly market review that the equities market performance echoed their last week’s forecast as volume improved on the back of an increase in foreign buyers’ who boosted activity on financial counters such as CRDB.

“We expect a slight recovery of turnover and volume [this] week as investors anticipate positive quarterly financial results for quarter two,” Mr Nganya said.

The DSE total equity turnover fell by 51.8pe cent on a weekly basis, to 2.28bn/-.