THE supply of share at Dar es Salaam Stock Exchange (DSE) has outstripped demand posing for stable of falling prices in this month. The trend, threaten to push the bourse into trading on bearish mode that seen for the past six to eight months now.
Tanzania Securities March Outlook analysis released on Tuesday showed that the nearly all counter at the exchange had more supply of share than demand.
“Nearly all counters at the DSE had supply of shares outstripping demand and hence we may see either stable or falling share prices in March as investors look to continue disposing their shares,” the report said.
The report that was also analysed in February said only the NICOL counter had a demand for 73,000 with no supply of the shares as of last Friday.
However, the report showed, “should foreign investors increase their participation in the DSE, we may likely see an increase in the share prices.”
But the foreign participation according to Tanzania Securities has only a “limited likelihood given the current global markets dynamics”. In February, the DSE recorded a total market turnover decrease of 51.17 per cent to 8.9bn/- from 18.4bn/- in January.
“This huge drop went in line” with the decrease in the volume of shares traded to 3,798,181 shares from 8,719,218 shares in the previous month, the report showed.
Active counters at the bourse last month were CRDB, TBL and V oda with 2,387,070 and 502,970 and 491,680 shares traded respectively.
On the Industrial and allied sector Swala and TOL stocks experienced activity by trading 7,860 and 160 shares respectively after being dormant at the bourse since last May.
The biggest declines in share prices were by NICOL, TBL and DSE which fell by 18.6 per cent. NICOL fell by 5.6 per cent to 175/- from 215/- in one month, TBL by 8.0 per cent to 11,700/- from 12,400/- and DSE by 8.6 to 1,260/- from 1,380.
“No counter experienced an increase in price, which may suggest a roughness of the market,” Tanzania Securities said.
Contribution by local investors was 64.92 per cent on the buy side and 73.41per cent on the sell side, indicating that foreign investors reduced their participation significantly, which may explain the drop in prices.
“It also shows that for the local investors, disposition of stocks exceeded acquisition,” the report showed.
The DSE Index and Tanzania Share Index (TSI) recorded a decrease of 2.13 per cent and 2.02 per cent respectively to close at 2,088.38 points from 2,140.00 and at 3,540.94 points from 3,614.19 points on the first day of the month.