DSE turnover raises 55pc as stock prices appreciate
The stock market ended the week on a positive note with total market capitalization rising by 0.21 per cent, with a sharp rise in trading volumes, registering a turnover of 4.293bn/-, an increase of 55 per cent from the previous week, a number of stocks experienced price appreciation leading to the overall increase in market capitalisation.
The top three trading counters, NMB Bank, CRDB Bank, and TCCL, dominated the market with 82.73 per cent, 10.21 per cent, and 3.74 per cent of the overall market turnover, respectively.
Investors can take comfort in the continued optimism in the market and the potential for growth in the future.
The stock market had a generally good performance for the trading week ending February 17, NICOL leading the gainers with a 25 per cent increase to close at 400/- per share. TICL also saw a price increase of 3.57 per cent closing the week at 145/- per share. NMB gained 1.74 per cent to close at 3,500/- per share, while CRDB appreciated by 1.16 per cent to close at 435/- per share.
On the losing side, Swiss suffered a 4.55 per cent decrease in value, closing the week at 1,260/- per share.
Total market capitalisation went up by 0.21 per cent to 16.136tri/- and domestic market capitalisation went up by 0.44 per cent closing at 10.664tri/-.
Key benchmark indices
- All Share Index (DSEI) closed at 1,936.19 points increasing by 0.21 per cent.
- Tanzania Share Index (TSI) closed at 4,034.24 points increasing by 0.43 per cent.
Sector Indices
- Industrial & Allied Index (IA) closed at 5,055.63 points, unchanged from the previous week.
- Bank, Finance & Investment Index closed at 3,822.77 points, up by 1.61 per cent.
- Commercial Services Index closed at 2,145.21 points, down by 0.12 per cent
CPI January 2023
The Annual Headline Inflation Rate for January, 2023 has increased to 4.9 per cent from 4.8 per cent that was recorded in December, 2022. The increase of the headline inflation explains that, speed of price change for commodities for the year ended January, 2023 has increased compared to the speed recorded for the year ended December, 2022.
The overall index went up from 105.59 recorded in January, 2022 to 110.81 in January, 2023.
Highlights: Debt Market
Primary market
Wednesday 15th February 2023, Bank of Tanzania offered 153bn/- through issuing a new 20 year Treasury bond. The auction received 341.53bn/-marking an 123 per cent over-subscription. Average yields to maturity continue to edge higher, emulating central bank’s monetary tightening cycle in a bid to curb inflationary risks. The weighted average yield to maturity clocked in at 12.61 per cent.
Bids deemed successful were valued at 311.58bn/-earmarking this auction as being the 2nd highest collected through debt issuance in a single auction.
Conclusively, the auction result highlights the central bank’s efforts to maintain a stable economy, with the increase in yields reflecting the strength of the economy. This will lead to a steepening of the yield curve, which should be viewed positively, as it signals growth and investment opportunities.
The central bank’s tight monetary policy is a clear indication of their commitment to ensuring economic stability and prosperity, making the current economic outlook optimistic.
Secondary market
Trading activities increased for the week ending February 17, Overall turnover for the week increased by 1735 per cent from 3.2855bn/- registered in the previous week to 60.305bn/-.
More so number of trades increased from 30 trades recorded in the previous trading week to 45 trades.
Overall tenures traded were predominately on the long end of the yield curve, with the off-the-run 15 year accounting for 46.9 per cent of the traded volumes.
Activities in the corporate bond segment continue to be on the rise, 5 trades were executed within the trading week, one NMB corporate bond was traded with an aggregate face value of 7.0m/- and NBC corporate bond registered 4 trades carrying an aggregate face value of 36m/-.
Outlook
The optimistic sentiment in the market is a reflection of the overall positive economic outlook and growth potential of the country. Investors are drawn to the favourable investment climate and the prospects for returns in the stock market.
Additionally, the continued support from the government and regulatory bodies to enhance the stock market infrastructure has also played a key role in attracting investors.
The Tanzania Share Index (TSI) continues reach new heights, closing this week at 4,034.24, which are levels last recorded in 2018. This milestone moment is a clear indication of the growth and stability of the Tanzanian economy, which has been boosted by positive earnings from some of the country’s largest banks.
A growing economy typically leads to higher profits for companies, which in turn can drive up stock prices and cause a stock market index to gain points. In conclusion, the stock market continues to be a promising investment destination for investors seeking long-term growth.
Despite some short-term volatility, the overall trend remains positive, and investors can expect continued growth in the coming weeks.
The market’s stability, investor confidence, and positive economic outlook provide a solid foundation for future growth, making it an attractive investment opportunity for those seeking to their portfolios.
Mr Masumbuko is a Chief Executive Officer of Zan Securities—a capital markets and securities authority licensed dealer and a member of the DSE. raphael.masumbuko@zansec.co.tz
