Acacia share price rally lifts DSE market cap

Stock Market

The Tanzania Share Index (TSI) remained unmoved at 3,295.61 points during the week that ended on the 19th July 2019 while the domestic market capitalization remained at 9tri/- ($3.95 billion).

On the other hand, the All Share Index (DSEI) gained 14.37 points following a 0.75 per cent increase in the total market capitalization to 18.9tri/- ($8.24 billion) on account of Acacia Plc (DSE: ACA) stock price rising by 14.29 per cent to 6,000/-.

The price of Acacia went up after a press release that Barrick Gold Plc and Acacia Plc reached a buyout deal.

The deal offers Acacia shareholders 0.168 Barrick shares per each Acacia share on top of special dividends from the sale of Acacia’s exploration properties.

The deal is now subject to a vote by Acacia shareholders and requires more than 75 per cent of the vote to be executed. Only Acacia went up on the cross listed board while four cross listed counters dropped and two remained constant.

Kenya Airways (DSE: KA) dropped by 8.7 per cent, Jubilee Holdings Ltd (DSE: JHL) dropped by 2.96 per cent, KCB Bank (DSE: KCB) went down 2.27 per cent and East African Breweries (DSE: EABL) dropped by 0.90 per cent.

Nation Media Group (DSE: NMG) and Uchumi Supermarket (USL) both remained constant. The weight of all four cross listed counters was not enough to counter the appreciation of Acacia hence a net appreciation of the total market capitalization.

Total equity turnover during the week under review dropped by 84.75 per cent to TZS 462.9 million ($0.201 million) realized from 4.3 million shares traded on the exchange.

Turnover dropped as a result of Tanzania Breweries Ltd (DSE: TBL) the largest and most active counter on the exchange being dull during the week.

The top mover spot was gained by CRDB Bank (DSE: CRDB) which moved 94.4 per cent of the total equity turnover after moving 4.2 million shares most at a price of 105/-.

CRDB closed the week with outstanding offers totalling 134,670 shares most at a price of 110/- while outstanding bids totalled 825,900 shares surpassing the offers by more than six folds.

Foreigners were net sellers during the week while the market was highly locally dominated. Local investors accounted for 99.66 per cent and 74.08 per cent of the buying side and selling side respectively while foreign investors accounted for the balance.

Money Market, Bills and Bonds Volume traded on the Interbank Money Market (IMM) dropped to TZS 37 billion ($16.08 million), an equivalent of a 52 per cent decrease from previous week’s TZS 77 billion ($33.47 million).

The interbank rate dropped by 47bps marking a third week consecutive decline to 4.43 per cent.

The drop in the interbank rate signals an improving liquidity situation in the banking sector, an observation that corresponds with the decline in the reverse repo rates for the month of May as reported by the Bank of Tanzania in the recent Monthly Economic Review.

Reverse repo rates marginally dropped by 3bps to 5.09 per cent despite the value of reverse repo sales increasing by 8 per cent to TZS 900.3 billion ($391.4 million).

On the other hand, credit growth to the private sector slowed down back to a single digit 9 per cent compared to 10.6 per cent reported during April 2019.

The weighted average yield to maturity (WAYTM) of the 15 years Treasury bond eased by 7bps to 15.67 per cent reflecting an increased appetite seen in the 99.37 per cent over subscription during the auction that was held on the 17th July 2019 compared to 15.74 per cent realized on the auction of the same bond held on the 19th June 2019.

The amount offered during the auction under review was TZS 109 billion ($47.38 million) while the market tendered a total of TZS 217.31 billion ($94.47 million) in 92 bids.

The Bank accepted TZS 194.5 billion ($84.57 million) from 50 bids, equivalent to 78.5 per cent and 89.5 per cent more than and of the offer size and tender size respectively.

Currency Market The shilling was resilient during the week although it depreciated by 5 pips to close the week at a weighted average exchange rate of TZS 2,300.40/USD from TZS 2,300.35/USD posted the previous week.

On the other hand, the amount traded jumped 92 per cent compared to the previous week. Transactions during the week under review were valued at $41.25 million compared to $21.45 million worth of transactions during the week before.

The recent Monthly Economic Review report by the Bank of Tanzania shows that the financial sector was out of the foreign exchange liquidity limbo during May, to the extent that the central bank mopped off $48.5 million against and injection of $7.5 million from and into the banking sector respectively through the Interbank Foreign Exchange Market (IFEM).

The total reported amount traded during the month went up to $119.5 million from $49.9 million traded during April.

orbit@orbit.co.tz; imani@orbit.co.tz

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Author: Weekly Markets Synopsis

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