DAR ES SALAAM: DURING the trading week ending on November 1st, the Dar es Salaam Stock Exchange (DSE) saw an increase in turnover compared to the prior week.
The total market turnover increased to 25.076bn/-, reflecting a 269.97 per cent uptick from the previous week’s 6.778bn/-. The pre-arranged board registered some activities as CRDB, NMB, TCC, TCCL and TBL recorded block trades.
Throughout the week, CRDB dominated trading activities, representing 48.74 per cent of the total market turnover, followed by TBL at 42.27 per cent and TCC at 4.79 per cent. CRDB was the top gainer for the week, appreciating by 4.62 per cent reaching 680/- per share while AFRIPRISE gained 4.35 per cent reaching 240/- per share.
TOL gained 3.08 per cent to reach 670/- per share, NMB share price increased by 1.89 per cent reaching 5,400/- per share and SWISS gained 1.67 per cent reaching 1,220/- per share.
However, DCB lost 2.94 per cent reaching 165/- per share, MBP depreciated by 2.86 per cent closing off the week at 340/- per share and NICO lost 2.7 per cent concluding the week at 720/- per share.
In terms of market capitalisation, there was a general increase in the size of the markets, with total market capitalisation increasing by 1.11 per cent to 18.449tri/- by the week’s end. Similarly, domestic market capitalisation increased by 1.07 per cent, reaching 12.300tri/-.
Key benchmark indices
All Share Index (DSEI) closed at 2,210.51 points increasing by 1.11 per cent.
Tanzania Share Index (TSI) closed at 4,643.99 points increasing by 1.07 per cent.
Sector Indices
Industrial & Allied Index (IA) closed at 5,042.3 points, up by 0.02 per cent
Bank, Finance &.
Investment Index closed at 5,865.44 points, up by 2.803 per cent
Commercial Services Index closed at 2,143.53 points, up by 0.04 per cent
Highlights: Debt Market
Primary Market
On Wednesday 30th October 2024, the central bank was in the market offering 156bn/- to investors for a reopening of the 20-year Treasury bond offering a 15.49 per cent coupon rate annually.
This auction was catered for investors with more preference for long-term papers. The auction was oversubscribed by 18.88 per cent the auction received bids totalling 185.458bn/- and accepted bids worth 146.308bn/-.
In this auction the 20-year Treasury bond still sees a high demand, the bond oversubscribed receiving 118.89 per cent subscription rate. The weighted average yield to maturity has increased in this auction by 30.88 basis points relative to the previous auction held on late September from 15.4463 per cent to 15.7551 per cent.
The amount offered has decreased in this auction from 183bn/- to 156bn/- in the last auction, the central bank accepted bids worth 146.308bn/-. Moreover, the price floor has remained at 100/- same as the previous auction in late September 2024.
Secondary market
During the week ending on November 1st, market activities saw a decrease compared to the previous week. Overall turnover decreased by 59.7 per cent, from 74.3476bn/- to 29.9606bn/-. However, there was a slight increase in the number of trades, rising from 72 to 76.
Trading activities primarily focused on the long-end of the yield curve, with the 20- year and 25-year bonds traded contributing to 86.73 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 NMB-2023/26. T1 recorded two trades totalling 9.0m/- at an average price of 85/5219. NBC corporate bond NBC-2022/27. T1 recorded one trade with a face value of 50m/- at a price of 88/0001. CRDB corporate bond CRDB-2023/28.T1 recorded two trades totalling 17m/- at an average price of 100/0001.
Outlook:
Equities:
Following the Q3 earnings rally, stocks like CRDB and NMB have seen notable price gains, rising by 4.62 per cent and 1.89 per cent respectively. As anticipated in our previous reports, these earnings results have spurred increased trading activity, with market turnover reaching 25bn/-—the highest weekly turnover recorded this year.
The Q3 performance boost has also driven domestic market capitalisation above 12.3tri/-, a level last seen in early September. Looking forward, we see further upward potential for banking stocks, which could push domestic market capitalisation toward 13tri/- by year-end.
Debt:
The central bank’s reluctance to allow long-term papers to be priced at a discount is expected to shift market interest toward medium-term papers for more favourable yields. With the 20-year bond predictably priced at par, the yield curve may adopt a humped shape, as yields on medium term securities surpass those of both short- and long-term bonds. A high dollar supply in the IFEM recently strengthened the shilling, pushing it to 2,675/-, with 14.45 million US dollars traded on November 1.
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This dollar inflow is likely sustaining shilling liquidity constraints for fixed income investments, potentially driving yields higher. The 7-day average interbank cash market rate rose from 8.49 per cent for the week ending October 25 to 8.58 per cent for the week ending November 1, reflecting tighter liquidity. We expect continued upward yield movement in the upcoming Treasury bill auctions, potentially reaching 12.5 per cent.
Global:
Two major events scheduled for the week of November 4—US elections on November 5 and the FOMC rate decision on November 7—are creating heightened volatility in global markets. The close race between Trump and Harris has led investors to seek safe-haven assets, pushing both gold and Bitcoin to all-time highs as a hedge against election uncertainties. Additionally, the Fed rate decision on November 7 will be closely watched, as September’s higher-than-expected inflation has reduced the Fed’s pressure to cut rates, strengthening the dollar index (DXY) against other currencies.
