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DSE turnover fall hits brokers earnings

DAR ES SALAAM Stock Exchange (DSE), total equity turnover plummeted by 73.4 per cent in May as result of a global shake up due to coronavirus pandemic.

The plummeting turnover meant slower business and less recoup by all beneficiaries of the stock exchange value chain and may lead to job loss and brokerage closure.

All stockbrokerage firms, about 15, are taking at most 1.7 percent of the turnover, while DSE and CMSA both take 0.14 percent of the turnover.

Orbit Securities Head of Research and Analytics, Imani Muhingo told ‘Daily News’ yesterday that less turnover means less pay-out to the stakeholders and less VAT to the government as well.

“On the other hand,” Mr Muhingo said, “less revenue for stockbrokers leads to unbearable operational expenses which trigger salary cuts, retrenchment or even brokerage closure.”

He added thus “risking hundreds of jobs, depending with the lasting duration of the current environment”.

The decline started to be experienced since March after the country reported the first case of Covid-19 patient, and due to virus contagious global markets.

However, analysts have it that the activities of DSE are tipped to increase this week driven mainly by shares movement of TBL and Twiga Cement.

Their prediction based on the fact that turnover and volume is expected to surge this week as Covid-19 cases kept on declining, globally.

Tanzania Securities said that they anticipate local investors to dominate the bourse and stock market recovery since the pandemic curve seems to be flattening globally.

“In the industrial and allied segment, TPCC [Twiga] and TBL is anticipated to remain active [this] week,” Tanzania Securities said in its weekly market blast.

The brokerage firm said the DSE and CRDB anticipated to maintained their activeness albert with lower volatility.

“…The banking, finance, and investment segment DSE and CRDB will maintain their activeness in the market with the lower volatility in their share prices,” Tanzania Securities said.

The light at the end of the tunnel is also started to be seen. The bourse turnover climbed up to almost six week high echoing analysts’ sentiment of improving performance ahead.

Zan Securities Chief Executive Officer (CEO), Raphael Masumbuko, said the last week turnover and volume increase echoing their prediction.

“The equity market performance echoed our last week’s sentiment, where we expected an increase of volume and turnover,” Mr Masumbuko said in the firm’s weekly market wrapups report.

The performance followed easing of social restrictions against Covid-19 and states initiative to open up economies. “We expect the performance to continue improving,” Mr Masumbuko said earlier.

Globally, Asian stocks rose on Tuesday as investors’ focus on the prospects of a global coronavirus recovery won out over familiar worries about U.S.-China relations and the depth of economic damage.

MSCI’s broadest index of Asia-Pacific shares outside Japan, which had its best day in two months on Monday, extended its rally without panache-rising 0.41 percent.

European stocks were headed for a strong start with the panregion EUROSTOXX 50 futures up 0.71 percent, FTSE futures gaining 0.52 percent and German DAX futures up 0.59 percent in Asian afternoon trade.

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Author: DAILY NEWS Reporter

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