Investors await first half of the year rally

TANZANIA: THE portfolio investors are eagerly waiting for the historic first-half-of-the-year rally, capitalising on the dividend payouts.

The analysts envisaged the first half-year rally since several listed local firms posted positive results in the first nine months of last year.

Orbit Securities’ Financial Markets Specialist Ammi Julian said as the year commences, market participants eagerly await the anomaly known as the first-half-of-the-year rally.

“This phenomenon is typically fuelled by the anticipation of dividend payments, customarily taking place between June and July,” Mr Julian said yesterday through the firm’s weekly market synopsis.

A stock market anomaly refers to a deviation from the expectations and predictions of established financial theories, such as the Efficient Market Hypothesis (EMH).

In essence, anomalies are patterns or phenomena in financial markets that appear to contradict the notion of market efficiency, where asset prices fully reflect all available information.

“These anomalies can manifest as consistent trends or behaviours that diverge from what would be anticipated in a perfectly efficient market,” Mr Julian said.

Vertex International Securities Advisory and Capital Markets Manager, Ahmed Nganya, said the year “is picking up nicely” with significant pre-arranged block trades being observed showing optimism even with only four days of trading for the last week.

“Investors’ confidence in the market is therefore evident with interest in TICL, TCCL, and TCC,” he said.

Additionally, he said considerable resilience is therefore expected to persevere throughout the next week with the continuous domination of the financial counters led by CRDB Bank and NMB Bank.

Last year, according to Vetex, witnessed a remarkable surge in turnover in the equities market, leaping by 76.31 per cent from the previous year to 235.7bn/-.

“This substantial increase reflects burgeoning investor confidence and a robust, sustained growth trajectory, underscoring the DSE’s expanding influence and resilience,” he said.

The participation of foreign investors grew significantly, contributing notably to the market’s financial metrics.

Also, stock performance last year was a mixed bag, with some companies like CRDB and NICO enjoying robust increases in their stock prices, while others like DCB Bank and Maendeleo Bank faced notable declines.

“This varied performance paints a nuanced picture of the DSE, characterised by both challenges and triumphs,” Mr Nganya said.

For instance, the banking sector experienced a significant upswing in performance, with the country’s 13 first-tier banks posting over 33 per cent jump in profits in nine months to last September.

The cumulative net profit of the banks was at 1.15tri/- by the end of last September a substantial surge from 863.94bn/- that was recorded in September 2022.

The listed banks with assets above one trillion shilling with their respective cumulative Q3 in 2023 net profit are NMB Bank 398.41bn/-, and CRDB 280.45bn/-.