Banks dominate DSE trading activities

Banks dominate DSE trading activities

Stock Market The banking sector dominated activities on the Dar es Salaam Stock Exchange (DSE) during the week that ended on the 12th November 2021, while lifting both major indices to a green zone. Specifically, CRDB and NMB accounted for 96.1 per cent of the total equity turnover with a distribution of 84.3 per cent and 11.8 per cent for CRDB and NMB respectively.

CRDB saw a prearranged block trade of 7.61mln shares at a price of 250/- per share on Wednesday 10th November, which accounted for 72.2 per cent of the total market activities during the week. Without the prearranged block transaction, NMB would have accounted for 42.3 per cent of the total normal board equity turnover.

The total equity turnover for the week was TZS 2.64bln ($1.14mln) which is 176 per cent higher compared to the previous week.

The total volume of shares traded was 9.17mln shares, traded in 263 deals, which are 65 deals less than the previous week.

Foreign investors were net sellers during the week under review while domestic interest in the banking and financial sector lifted the investment portion of locals into the stock market to a significant net buyer position. Foreign investors accounted for 75.25 per cent of the total divestments for the week and only 6.3 per cent of the total investments.

Local investors accounted for 93.7 per cent of the total investments and 24.75 per cent of the total divestments. The banking sector was also responsible for lifting the major indices of the market after a price growth of respective banks from both, domestic and cross listed counters.

From the domestic side, CRDB and NMB rose by 4.17 per cent and 8.05 per cent respectively, riding on the impressive business performance posted during the previous week. Other counters that recorded price movement were DSE which jumped 8.33 per cent and JATU which dropped by 11.5 per cent.

DSE is also riding on the positive note from quarterly results posted during the previous week despite an expectation of slower performance for the full 2021 financial year due to lack of a merger & acquisition transaction similar to the last two years.

The price of JATU is under pressure from the negative publicity going around in the last two weeks after some members claim lack of payment for about three years despite following the farming and claimant procedure as put by the agricultural company.

As a result of the movement on the aforementioned four counters, the Tanzania Share Index (TSI) gained 36.73 points, closing the week at 3,497.87 points.

Domestic market capitalization grew by 1.06 per cent during the week, to a total of TZS 9,248.26bln ($4.01bln). Domestic market cap is up 2.64 per cent since the beginning of the year while the TSI has gained 66.77 points.

On the cross listed table, only KCB Bank, again from the banking sector, was a positive price mover while all other counters were either stagnant or losers. KCB went up by 2.25 per cent, and with the assistance of gainers from the domestic market, lifted the total market cap by 0.27 per cent while the All Share Index (DSEI) gaining 5.10 points.

The combination of domestic counters and KCB was able to offset the price loss on East African Breweries (EABL) which fell by 3.77 per cent, National Media Group (NMG) which dropped by 8.89 per cent and Jubilee Holdings (JHL) which dropped by 0.71 per cent. The total market cap closed the week at TZS 15,613.97bln ($6.77bln) while the DSEI stood at 1,873.25 points.

Market, Bills and Bond The value of transactions on the Interbank Cash Market (IBCM) dropped by 78 per cent while the number of trading sessions halved during the week. The market reported a total of TZS 5.5bln ($2.4mln) as the weekly aggregate turnover of the IBCM.

The interbank rate indicated mixed signals during the two sessions, with an initial 50bps rise, before falling by 100bps to settle at 3.5 per cent. The Bank of Tanzania had an offer of a 2-year Treasury bond during the week, the only Treasury bond which has withholding tax of 10 per cent similar to Treasury bills.

The offer size was the usual TZS 114bln ($49.48mln) similar to the previous auction. The total tender size from the public stood at TZS 217.07bln ($94.22mln) from 92 bids with the highest bid price standing at 102.00/- while the lowest bid price stood at 95/70. The Bank accepted 74 bids worth TZS 164bln ($71.19mln) at a minimum successful price of 99/1499.

The successful value is 44 per cent higher than the offer size and 76 per cent of the tender size. As a result of a slightly lowered weighted average successful price, the weighted average coupon yield slightly lost 0.09bps to close the auction at 7.7845 per cent.

Currency Market In a strange market occurrence, the Interbank Foreign Exchange Market (IFEM) had only one trading session during the week, hence a significant drop in the aggregate weekly value of transactions.

The total turnover for the week amounted to $4mln, down from $54.15mln during the previous week, marking a 93 per cent decline of the turnover. The shilling depreciated by 64 pips during the week, to close the week at a weighted average exchange rate of 2,303.79/USD.

orbit@orbit.co.tz; imani@orbit.co.tz,

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