DAR ES SALAAM: DURING the trading week ending on July 12th, the Dar es Salaam Stock Exchange (DSE) saw an increase in turnover compared to the prior week.
The total market turnover increased to 2.466bn/-, reflecting a 115.91 per cent uptick from the previous week’s 1.142bn/-. The prearranged board registered some activities as CRDB Bank recorded block trades.
Throughout the week, CRDB dominated trading activities, representing 86.14 per cent of the total market turnover, followed by NMB at 9.56 per cent and TPCC at 1.85 per cent.
AFRIPRISE was the top gainer for the week, appreciating by 9.76 per cent to close off the week at 225/- per share. MKCB gained 7.14 per cent closing the week at 600/- per share.
CRDB’s share price increased by 5.77 per cent concluding the week at 550/- per share. In terms of market capitalisation, there was a general increase in the size of the markets, with total market capitalization increasing by 1.99 per cent to 17.309tri/- by the week’s end.
Similarly, domestic market capitalization increased by 0.69 per cent, reaching 12.036tri/-.
Key benchmark indices
• All Share Index (DSEI) closed at 2,073.85 points increasing by 1.99 per cent.
• Tanzania Share Index (TSI) closed at 4,544.28 points increasing by 0.69 per cent.
Sector Indices
• Industrial & Allied Index (IA) closed at 5,120.14 points, unchanged from the previous week
• Bank, Finance & Investment Index closed at 5,434.31 points, up by 1.929 per cent
• Commercial Services Index closed at 2,134.27 points, unchanged from the previous week
MPC: Ongoing policy will address dollarisation
Monetary Policy Committee (MPC) has said the ongoing policy interventions by the government to tame dollarisation in the economy will reduce dollar transactions and increase foreign currency liquidity.
According to the MPC report, the financial dollarisation in the banking sector remained relatively high as in the preceding quarters, primarily due to a shortage of foreign currency liquidity in the economy, particularly US dollars.
The government had issued directives that from July 1st this year all goods and services provided in the domestic market must be charged and settled in the local currency.
Foreign exchange reserves remained adequate, above 5.0 billion US dollars at the end of June 2024, sufficient to cover more than 4.0 months of projected imports.
Highlights: Debt Market Primary market On July 10, 2024, the central bank was in the market to offer treasury bills to investors.
The offerings included 900m/- for the 35-day maturity Treasury bill, 1.9bn/- for the 91-day T-bill, 2.9bn/- for the 182- day T-bill, and 12.045bn/- for the 364-day T-bill.
In this auction, demand was weak for the 35, 91 and 182 whereas they did not receive any subscription and the 364-day bill received an 83.02 per cent subscription rate from investors.
This further shows investors’ appetite for longer term maturities.
The 364- day bill saw an increase by 165.08 basis points in the weighted average yield, the weighted average yield being at 8.41 per cent compared to 6.75 per cent in the previous auction held in June.
The price floor decreased from 92.61 to 90.95 as the Central Bank allotted less than what was offered in this auction. The inflation rate was recorded at 3.1 per cent in June.
Secondary market
During the week ending on July 12th, market activities saw an increase compared to the previous week. Overall turnover increased by 76.74 per cent from 42.2699bn/- to 74.706bn/-.
Similarly, there was a notable increase in the number of trades, rising from 72 to 81. Trading activities primarily focused on the long end of the yield curve, with the 20-year and 25-year bonds traded contributing to 76.49 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 NMB2023/26.T1 recorded nine trades totalling TZS 154.2 million at an average price of 86.1762 while CRDB2023/28.T1 recorded five trades totalling TZS 197.5 million at an average price of 97.
Also read: Why govt urges youths, women participation in capital market
Outlook:
The general market performance for the first half of the year has demonstrated a bullish trend, marked by significant price increases in various stocks, such as:
• NICOL: 60 per cent increase to 800/-
• DSE: 22.22 per cent increase to 2,200/-
• NMB: 15.56 per cent increase to 5,200/-
• CRDB: 13.04 per cent increase to 520/- This growth has led to a 3.97 per cent rise in domestic market capitalisation, reaching 11.853tri/-, an additional 452bn/- over the six-month period.
Cross-listed equities have also performed well, contributing 15.21 per cent to the total market capitalisation, which now stands at 16.834tri/-, representing an increase of 2.2tri/-. In the debt market, fixed-income securities have shown cyclical returns in terms of yields.
At the start of the year, yields on the long end of the yield curve were at 14 per cent, peaking at 15.7 per cent in early March following the reintroduction of re-openings.
By the end of June 2024, treasury bond yields on the long end had decreased to 14.6 per cent. Our outlook for the second half of 2024 is optimistic, as we anticipate that these impressive numbers will positively impact stock prices.
