EARLIER this week, the central bank had announced the launch of its longer debt instrument in the market “The 25 Year Treasury Bond”. The Launch is expected in Mid- April this year.
The instrument carries attractive yield which is projected to entice the investor’s appetite at a fixed return of 15.95 per cent. This is in line with the central government’s objective to enhance and promote financial market as well as fund government’s long-term projects.
The introduction of this longerterm instrument may dilute the oversubscription of the 20 years bond which has been sequentially happening due to high appetite by investors for the risk free but higher yield instruments. Likelihood, the market will remain vibrant going forward specifically on the banking sector. We have witnessed share price movement in the local counters which amplifies that there is demand in the market that will drive market activities during the week. In midweek, we expect a Treasury bill Auction by the central bank.
There could be a slight increase in the WAY especially for the 364 days - T bill than other tenors. In the interbank cash market, despite the decrease in the Weighted average rate (WAR) during the previous week, we still anticipate that WAR will continue to be stable and within a range of 3.50 per cent to 4.00 per cent with slight volatility in the high and low rate.
The Bourse During the week, Total Market Capitalisation slightly gained by 1.36 per cent to close the market at TZS 15.51 Trillion from TZS 15.32 Trillion in the previous week mainly due to increase in share prices of both local and cross listed firms at the bourse.
CRDB share price increased by 2.27 per cent to close at TZS 225, DSE increased by 5.77 per cent to TZS 1,100, JATU increased by 3.23 per cent to TZS 1,920. KCB increased by 2.47 per cent to close the market at TZS 830, NMG shot by 23.88 per cent to close the market at TZS 415 while JHL’s share price declined by 2.70 per cent to TZS 5,400.
Domestic market capitalisation slightly gained by 0.01 per cent justified by local counter movements. TSI gained 0.01 per cent to close at 3,513.28 points, DSEI gained 1.36 per cent to close at 1,867.44 points, Bank, Finance and Investment Index (B&F) gained by 0.02 per cent to close at 2,436.57 points.
On the contrary, Industrial & Allied (I&A) and Commercial Services (CS) remained stationary to close the week at 4,815.83 and 2,139.33 points respectively. Total Volume of shares traded declined by 91 per cent to 545,309 by 174 deals from 6,090,141 by 301 deals.
Total turnover for the week rallied southwards after recording a decline by 96.43 per cent to TZS 179 Million from TZS 5.08 Billion in the previous week.
CRDB polished the pie after transacting shares worth TZS 1,182 Million which is 96 per cent of the total chunk, JATU counter transacted shares worth TZS 15.54 Million which is 1.24 per cent, TPCC transacted shares worth TZS 13.57 Million, DSE transacted shares worth TZS 11.22 Million, SWISS transacted shares worth TZS 1.85 Million, VODA transacted shares worth TZS 1.19 Million.
NICOL transacted shares worth TZS 0.45 Million, NMB traded shares worth TZS 0.44 Million, TCCL traded shares worth TZS 0.23 Million while DCB lagged behind with TZS 0.072 Million. Interbank market During the week, the Interbank Cash Market (IBCM) recorded a total transaction value of TZS 52.40 billion being an increase from last week’s TZS 41.5 billion traded.
The WAR decreased to close at 3.73 per cent from 4.11 per cent. The highest and lowest rate was 4.50 per cent and 3.50 per cent from 5.50 per cent and 3.50 per cent in previous week. Debt Market In the debt market, outstanding government bond listed at the bourse stood at TZS 13.41trillion.
On the Secondary market, the government bond segment transacted TZS 43.02 billion whose face value was TZS 40.49 billion from last week’s TZS 30.74 billion and face value of TZS 28.67 billion. For the Corporate bonds, the market transacted bond worth TZS 15 Million and face value of TZS 14.45 Million from the previous week transaction value of TZS 6.87 Million and face value of TZS 7 Million.
During the week, the central government in line with its debt issuance plan sought to raise total of TZS 150 Billion from the public through its short term two year bond. The auction was undersubscribed by TZS 25.45 Billion after the central bank pocketed TZS 155.5 Billion from the public.
WAY for the instrument slightly increased to 7.88 per cent from 7.09 per cent in the previous auction held in Mid- August 2020. Interbank Foreign Exchange Market Total volume in the Interbank Foreign Exchange Market increased to USD 4.09 from USD 3.23 Million in the previous week. TZS/USD remain resilient to close the market at TZS/ USD 2,309.96