After two weeks of non-existence, prearranged block transactions returned to the market to raise the total equity turnover by more than ten times. The total turnover for the week ending 17th September 2021 was TZS 2.6bln ($1.12mln), up from TZS 250.58mln ($0.108mln) realized during the previous week.
The volume of shares traded also grew more than five times to a total of 4.03mln shares compared to 0.69mln shares traded in the last week. The shares were traded in 425 deals while 57% of the deals were executed on the JATU counter.
Five prearranged deals on the TBL and VODA counters accounted for 85.5% of the total turnover during the week, making the two counters the top movers for the week. Between the two, VODA accounted for 46.5% of the total weekly turnover while TBL accounted for 39%. Without the prearranged transactions, JATU would have been the top mover, accounting for 44.8% of the total turnover that went through the normal board.
Foreign participation was significant in the prearranged blocks, raising the foreign participation for the week relative to the previous week. Foreign investors were net sellers during the week as a result of the prearranged deals on the TBL counter. Foreign investment accounted for 81.4% of the total investments while foreign divestments accounted for 85.5% of the total divestments. The net foreign outflow for the week was $0.047mln.
Apart from being the most active counters, JATU and CRDB, both saw a depreciation in prices, thus suppressing the Tanzania Share Index (TSI) by 6.59 points. The price of JATU saw a cusp from a two weeks bull to a bear during the week under review, falling by 21.36%. JATU closed the week at 810/- from the previous week’s 1,030/-.
On the other hand, the price of CRDB is still under pressure from the half year results that showed flattening of quarterly profits since Q3-20. Investors are eager to see financial results for Q3-21 which are expected to be released in October. Profitability growth is crucial to the direction of the price of the bank.
The Tanzania Share Index (TSI) closed the week 6.59 points less compared to the previous week, closing at 3,615.98 points. The domestic market capitalization dropped by 0.182% equivalent to TZS 17.44bln ($7.54mln). Domestic market cap closed the week at TZS 9,560.6bln ($4.14bln)
On the other hand, the two cross listed giants appreciated, lifting the All Share Index (DSEI) by 14.99 points, neutralizing the bear on other cross listed counters along with JATU and CRDB. KCB Bank and East African Breweries (EABL) both saw their prices appreciate by 5.15% and 0.55%. Both, Jubilee Holdings (JHL) and National Media Group (NMG) dropped by 3.31% and 3.7% respectively while Kenya Airways (KA) remained suspended and Uchumi Supermarket (USL) remained stagnant. The DSEI closed the week at 1,989.64 points while the total market capitalization closed the week at TZS 16,583.83bln ($7.18bln).
Market, Bills and Bond
The value of transactions on the Interbank Cash Market (IBCM) significantly dropped by 69% while the interbank rate went back to its mean reverting level. The total turnover on the IBCM during the week amounted to TZS 25bln ($10.82mln) compared to TZS 81bln ($35mln). The interbank rate stood at 4%, which is 62bps higher than the previous week.
The central bank rose the offer amount of the 5 years Treasury bond by 15.85%. The central bank offered the public a bond worth TZS 117.01bln ($50.63mln) compared to TZS 101bln ($43.7mln) during the previous comparable auction. The auction under review was undersubscribed by 22.4% after the public brought forward a tender size amounting to TZS 90.81bln ($39.3mln) in 46 bids.
The Bank of Tanzania accepted all the bids put forward, leading to a slight increase in the yield for the 5 years Treasury bond. The weighted average yield to maturity for the bond gained 21.6bps while the coupon yield rose by 8bps. The yield to maturity resulting from the auction stood at 9.3726% while the coupon yield was 9.2525%.
The shilling held ground against the greenback on a weekly basis, despite a slight depreciation during the mid-week. The value of transactions dropped by 25%, one reason being fewer trading sessions during the week under review. The total value of transactions amounted to $4.99mln, while the weighted average exchange rate at the end of the week was TZS 2,310.97/USD.