Jatu share price plunged over 34 per cent in the week ending last Friday and free fall is anticipated to continue this week.
The share plummeted from 2,400/- to 1,580/- at the closing of trading last week, which was the highest fall in a single week since the firm was listed on Dar es Salaam Stock Exchange (DSE) last November.
Tanzania Securities, one of the leading stock brokerage firms, projected the share bearish trade to continue based on high supply amid low demand.
"[Jatu] share price anticipated to decline at the bourse [this week]," Tanzania Securities said in its Weekly Market Blast issued on Monday:
"[However] it is likely that it may remain active for some coming trading sessions due to many investors looking to sale."
Last week’s Jatu price sharp drop made the share to fall by over 50 per cent since the year has begun.
The share dropped from 3,260/- at the beginning of the year to 1,580/- last Friday to register an over 50 per cent fall.
The share bullish trend was puzzling stock analysts, who suggested the start-ups had totally defied business fundamentals to register not only the Santa Claus rally, but also to determine the value of the company.
Jatu stock analysts had it that, it might use different fundamentals from the company’s book to determine the value of the firm.
“There has been no fundamental ground on Jatu share price increase or a technical factor that justifies the same,” Tanzania Securities’ Jatu Equity Research report said.
The report, however, said lack of supply had been the main reason for share price appreciation. Jatu, for about three years, posted a net profit of about 6.0m/- to 40m/-.
“The rally originated from surprise that persists on the Jatu counter where company fundamentals are being totally defied...Or rather different fundamentals from the company’s books are being used to determine the value of the company,” Orbit Securities said early in Weekly Market Synopsis.
Jatu, which was listed last November, its share rallied from 420/- to almost 4,000/- in a month, but started nose-diving since the beginning of the year.
The company has only one class of ordinary shares authorised and issued. There are no preferential shares.
Currently, it has a total authorised share capital of 125bn/-, consisting of 250 million ordinary shares at a nominal value of 500/- per share. The total issued and paid share capital amounts to 1.082bn/-.
Jatu runs and manages various agricultural projects in collaboration with its members.
Agriculture is the main foundation and pillar of the company, where Jatu seeks areas/farms and researches them technically and legally.
So far, Jatu in collaboration with their members has successfully owned three large-scale farms located in Manyara, Morogoro and Tanga.