THE new trading rules issued by the Exchange rattled the market during the week although the market managed to stay afloat, generating a turnover barely above one billion shillings thanks to CRDB Bank counter whose trading price was practically not affected by the rules.
Total equity turnover realized during the week that ended on 02nd August 2019 totalled at TZS 1.15 billion ($0.5 million) which is 67.7 per cent less than the turnover realized during the previous week while the total number of shares at 11.1 million shares was 42.5 per cent more than the shares traded the week before.
CRDB toppled TBL as the top mover and retained the position during the week under review, accounting for more than 95 per cent of the total equity turnover realized during the week. CRDB moved 11 million shares most at a price of 100/- and closing the week at the same price, 4.76 per cent down from previous week’s 105/-.
Both indices, the Tanzania Share Index (TSI) and the All Share Index (DSE) were on the red during the end of the week under review due to lowering prices.
TSI lost 3.63 points to close the week at 3,295.90 points following a 0.11 per cent drop in the domestic market capitalization which closed the week at TZS 9,076.91 billion ($3.95 billion).
Domestic market capitalization was pulled down mostly by CRDB price which went down 4.76 per cent as mentioned above, and DSE which went down 1.82 per cent to 1,080/-. Tanzania Oxygen Ltd gained by 10 per cent to 660/-.
DSEI lost 21.53 points during the week under review to close the week at 1,923.37 points following a 1.11 per cent drop in the total market capitalization to TZS 18,957.29 billion ($8.24 billion).
DSEI dropping is mostly a result of two cross listed counters, Acacia Plc (DSE: ACA) which dropped by 4.65 per cent and Kenya Airways (DSE: KA) by 26.32 per cent as the market is still reacting on the nationalization of the airline policy agreed by the parliament in the past two weeks.
National Media Group (DSE: NMG), Jubilee Holdings Ltd (DSE: JHL) and East African Breweries Ltd (DSE: EABL) all saw their prices climbing by 3.85 per cent, 1.23 per cent and 1.81 per cent respectively while KCB and Uchumi Supermarket Ltd (DSE: USL) maintained similar prices as last week.
Foreign investors dominated the market but remained net sellers during the week accounting for 77.02 per cent and 64.58 per cent of investments and divestments respectively while local investors accounted for the balance on both sides.
During the week commercial banks released second quarter financial results showing a general improvement in the financial sector especially the expansion of the credit portfolio.
A snapshot of the banking sector can be seen in CRDB and NMB which comprise more than 35 per cent of the banking sector assets. Both banks reported q-o-q credit growth of around 1.6 per cent while annual credit growth stood at 5.7 per cent for CRDB and 6.7 per cent for NMB. Deposits grew healthily at both banks while interest expenses went down for CRDB but grew for NMB q-o-q.
CRDB reported a faster growth in interest income and reported better profit margins due to lowering of interest expenses and impairment expenses while the opposite happened for NMB which reported worsening profit margins.
Both banks reported increased net profits, 108 per cent increase for CRDB while NMB gained by 14 per cent. NPLs marginally worsened for both banks over the six months of 2018 increasing by 19bps and 120bps to 8.69 per cent and 7.2 per cent for CRDB and NMB respectively.
Money Market, Bills and Bonds The volume traded on the money market for the week amounted to TZS 108.8 billion ($47.3 million), three folds higher than TZS 33 billion ($14.34 million) traded during the previous week.
The weighted average interbank rate has closed the week at 4.5 per cent down 40bps from previous week’s rate of 4.9 per cent, this further indicate improvement in liquidity for the week, and for the month in general since the rates during previous months had gone higher than 5 per cent threshold.
The 20 years bond is currently the most anticipated government instrument on the market attracting massive attention, this week’s auction was yet another success with oversubscriptions of over 50 per cent.
Despite the government almost tripling the offer amount to TZS 116.4 billion ($50.6 million) from the previous auction’s TZS 39 billion ($16.95 million), the offer was still substantially oversubscribed by a total tender size of TZS 180 billion ($78.24 million).
The minimum successful price has slightly increased to 87.5473 from 87.0205, with the weighted average price for successful bids settling at 89.2676 while the yield to maturity slightly moved up by 2.75bps to 17.4209.
The government ended up taking TZS 141.45 billion ($61.5 million) of the tendered amount, 22 per cent higher than the offer size.
Currency Market The Interbank Foreign Exchange Market (IFEM) traded a total of $31.9 million which is 42 per cent higher than the previous week turnover of $22.43 million.
The weighted average exchange rate closed 9 pips higher than previous week at TZS 2,300.56/ USD from TZS 2,300.47/USD realized during the previous week.