DSE turnover quadruples to 2.93bn/-

DAR ES SALAAM: DURING the trading week ending on September 13th, the Dar es Salaam Stock Exchange (DSE) saw an increase in turnover compared to the prior week.

The total market turnover increased to 2.926bn/-, reflecting a 326 per cent uptick from the previous week’s 685.79m/-.

The pre-arranged board registered some activities as NMB, TPCC and DCB recorded block trades.

Throughout the week, DCB dominated trading activities, representing 34.73 per cent of the total market turnover, followed by CRDB at 25.94 per cent and NMB at 21.73 per cent.

DCB gained 10.71 per cent closing off the week at 155/- per share.

DSE appreciated by 1.67 per cent to reach 2,440/- per share at the end of the week.

However, NICO lost 5.26 per cent reaching 720/- per share and NMB share price decreased by 1.85 per cent concluding the week at 5,300/- per share.

CRDB depreciated by 1.49 per cent to close off the week at 660/- per share.

In terms of market capitalisation, there was a general decrease in the size of the markets, with total market capitalisation decreasing by 1.007 per cent to 17.50tri/-by the week’s end.

Similarly, domestic market capitalisation decreased by 0.62 per cent, reaching 12.223tri/-.

Key benchmark indices

• All Share Index (DSEI) closed at 2,096.8 points decreasing by 1.007 per cent.

Tanzania Share Index (TSI) closed at 4,614.7 points decreasing by 0.62 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 5,735.69 points, down by 1.634 per cent

• Commercial Services Index closed at 2,134.27 points, unchanged from the previous week.

Highlights: Debt Market

Primary Market

On Wednesday 11th September 2024, the central bank was in the market offering 184bn/- to investors for a new 15-year Treasury bond offering a 13.5 per cent coupon rate annually.

The auction was under subscribed receiving 32.37 per cent subscription – the auction received bids totaling 59.554bn/- and accepted bids worth 59.125bn/-.

This is the second 15- year Treasury bond auction since the issuance of the new reopening calendar from the Bank of Tanzania for the first half of the year 2024/25.

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This auction has seen under subscription receiving a subscription rate of 32.37 per cent.

The price floor has decreased compared to the last auction in July.

The weighted average yield has increased in this auction by 29.84 basis points relative to the previous auction held in July from 15.0516 per cent to 15.35 per cent.

The central bank allotted less than what they required accepting bids worth 59.125bn/-.

Inflation rate has increased from the one in July to 3.1 per cent in August.

Secondary market

During the week ending on September 13th, market activities saw an increase compared to the previous week.

Overall turnover increased by 730 per cent, from 11.4296bn/- to 94.9018bn/-.

Similarly, there was a notable increase in the number of trades, rising from 65 to 158.

Trading activities primarily focused on the long end of the yield curve, with the 20-year and 25-year bonds traded contributing to 80.19 per cent of the total turnover.

In the corporate bond segment, there was a decrease in activity compared to the previous week.

NMB corporate bond NMB 2022/25. T1 recorded two trades totaling 18.5m/- at an average price of 98/30.

NMB corporate bond NMB-2023/26. T1 recorded two trades totaling 3.0m/- at an average price of 86/5001. CRDB corporate bond CRDB-2023/28.

T1 recorded one trade with a face value of 39m/- at a price of 91/0001.

Outlook:

The second-quarter releases have provided tail wind to banking stocks, leading to a 3.498 per cent week-on-week increase in the Banking, Finance and Investment index (BI).

This rise was driven by the appreciation in prices of banking and investment stocks such as CRDB (+9.68 per cent), DCB (+9.09 per cent) and NICO (+1.28 per cent).

Overall, domestic stocks, as measured by the TSI index, have delivered an 8.07 per cent return year-to-date.

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 fixed income 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 11.0 per cent, while long-term rates are expected to stabilise around the 16 per cent mark.