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Cross-listed firms lift DSE market capitalization

Stock Market

The market was marginally bearish during last week as the Tanzania Share Index (TSI) released a 0.87 point to close the week at 3,295.61 points following a 0.026 per cent week on week drop of the domestic market capitalization to TZS 9.076 trillion ($3.95 billion).

Domestic capitalization went down on account of 8.3 per cent weakening of DSE counter price. Dar es Salaam Stock Exchange (DSE: DSE) traded 12,260 shares during the week all at a price of 1,100/- realizing a turnover of TZS 13.487 million ($0.0059 million).

DSE price is down 21.4 per cent since the beginning of the year reflecting poor performance results for FY2018 which saw revenue drop by 21 per cent and profits decline by 56.7 per cent as a result of worsening of all revenue segments except for Registry & CSD fees.

Results for Q1-19 also painted a gloomy picture with revenues dropping by 23 per cent quarter on quarter while profits decline by 40 per cent.

DSE Plc business performance is synonymous to the Exchange’s market activities which also paints a sluggish perception with equity turnover for the first six months of 2019 being half that of a similar period last year.

Equity turnover for the period between 01st January and 30th June 2019 is TZS 63.19 billion ($27.47 million), down by 54 per cent from TZS 137.46 billion ($59.74 million) realized during a similar period last year.

Total equity turnover realized during the week under review shot up more than ten folds to 3.035bn/- ($1.32 million) from previous week’s TZS 290.06 million ($0.13 million).

Volume of shares traded on a weekly basis also went up more than four folds to 8,583,116 shares traded during the week under review compared to 2,002,320 shares traded during the previous week.

Tanzania Breweries Ltd (DSE: TBL) retained the top mover spot from CRDB as TBL accounted for 64.8 per cent of the total equity turnover realized during the week after moving 202,905 shares all at a price of 9,700/- despite the counter’s closing price of 11,400/-.

TBL closed the week with outstanding offers of 2,880 shares of which majority is offered at a price of 9,700/- while the counter had zero outstanding bids.

The All Share Index (DSEI) on the other hand gained 20.35 points to close the week at 1,909.78 points following a 1.07 per cent appreciation of the total market capitalization to 18.8tri/- ($8.18 billion) compared to previous week’s TZS 18.6tri/- ($8.1 billion).

The appreciation of the total market capitalization was a result of price appreciation of three cross listed counters that had enough weight to offset the depreciation effect of other three cross listed counter that saw a drop in prices.

Cross listed counters that saw their prices increase were Kenya Airways (DSE: KA), Acacia Plc (DSE: ACA) and East African Breweries Ltd (DSE: EABL) by 27.8 per cent, 3.96 per cent and 2.07 per cent respectively.

Counters with a drop in prices were Jubilee Holdings (DSE: JHL), National Media Group (DSE: NMG) and KCB Bank (DSE: KCB) by 3.98 per cent, 3.64 per cent and 2.22 per cent respectively while Uchumi Supermarket (DSE: USL) remained constant.

Money Market, Bills and Bonds Volumes traded on the Interbank Money Market (IMM) jumped 16.4 per cent week on week to TZS 77 billion ($33.47 million) compared to the week before which witnessed a total of TZS 66.14 billion ($28.75 million) being traded.

The interbank weighted average rate dropped below 5.00 per cent for the first time since early March, closing the week at 4.90 per cent which is 56bps lower from the previous week’s 5.46 per cent.

The easing of interbank rates indicates improving liquidity in the banking sector. As it is yet to release the Treasury auction calendar for the year 2019/2020, the Bank of Tanzania reduced the offer size for Treasury bills on the auction held on the 10th July 2019 to TZS 101 billion ($43.9 million) from the usual TZS 141 billion ($61.3 million).

The offer was heavily oversubscribed as the market tendered a total of TZS 223.29 billion ($97.07 million) in 146 bids. The Bank of Tanzania accepted TZS 105.42 billion ($45.83 million) from just 51 bids, which is 4.4 per cent higher than the offer size and 47.2 per cent of the tender size respectively.

As expected from the high oversubscription, the weighted average yield to maturity (WAYTM) released off 29bps to post a WAYTM of 8.30 per cent from previous auction’s 8.59 per cent.

Currency Market The shilling remained resilient during the week’s activities on the Interbank Foreign Exchange Market (IFEM), with a slight depreciation of only 3 pips, closing the week at TZS 2,300.35/USD up from previous week’s TZS 2,300.32/ USD.

The movement is insignificant as the shilling remains stable since February when the central bank began injecting substantial foreign exchange liquidity into the banking system through the IFEM.

Amounts traded on the IFEM went down second week in a row to $21.45 million from previous week’s $32.7 million equivalent to a week on week 34.4 per cent decline. orbit@orbit.co.tz; imani@ orbit.co.tz

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Author: Weekly Markets Synopsis

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