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NMB pulls up market indices despite turnover fall

NMB pulls up market indices despite turnover fall

DESPITE a 32% decline in the total equity turnover, the major indices were on the green, pulled up by NMB and KCB.

The price of NMB is still very active since the ice broke two weeks ago that ended a three years stagnancy.

NMB rose 8.51% during the week that ended on the 19th of November 2021, while maintaining significant activities on the counter.

NMB closed the week at a price of 2,040/-. KCB also rose by 2.2%, being one of the only two cross listed counters that were active.

Another active cross listed counter was East African Breweries (EABL) which dropped by 4.22%.

Another domestic counter that had a greenlight was Tanga Cement (TCCL) which rose by 10%, still riding on the acquisition announcement that created significant demand for the counter.

The price of TCCL closed the week at 495/- with significant bids and no offers. Scancem, the parent company of Twiga Cement, has reached an agreement to buy all stake of TCCL owned by Afrisam Mauritius, somewhat 68.3% of the cement manufacturer.

The indicative announced price was TZS 3,157/- but the final acquisition price is subject to debt and working capital adjustments.

Other counters that saw traction were JATU, CRDB and DCB. JATU fell by 17% to close the week at 450/-, in a meltdown that began with the negative comments from members who claim overdue nonpayment for over three years.

JATU is already 85% down since the beginning of the year. Investors await the AGM planned for December to get answers from the management and the board, while dividend is one of the agendas of the AGM. CRDB dropped by 4% while DCB went down 5%.

The Tanzania Share Index (TSI) gained 19.97 points mostly as a result of the appreciation of NMB. The TSI closed the week at 3,517.84 points while the domestic market cap rose by 0.6% to a total of TZS 9,301.05bln ($4.03bln).

The total market capitalization rose by 0.01% to close the week at TZS 15,615.46bln ($6.77bln) which pushed up the All Share Index (DSEI) by a slight 0.19 point. The DSEI closed the week at 1,873.44 points.

The total equity turnover went down by 32% to a total of TZS 1.8bln ($0.78mln) while the volume of shares traded dropped by 81.5% to 1.69mln shares.

The transactions were executed in 293 deals, somewhat 30 deals higher than the previous week. Most of the equity turnover originated from the NMB counter which accounted for 83% of the total turnover for the week.

Two prearranged block deals were executed on the NMB counter on Thursday and Friday, which accounted for 70% of the turnover for the week.

If we normalize the prearranged deals NMB is still the top mover but at a lower pace of 43% of the total turnover on the normal board. CRDB would have followed closely at 38.5% while DSE would have accounted for 11.5%.

Foreign investors were still dominant of the market during the week under review while maintaining the net investors position.

Foreign investment accounted for 83% of the total investments during the week and 63% of the total divestments.

The net foreign inflow during the week was $0.16mln as local investors account for the balance of both sides. Market, Bills and Bond The Interbank Cash Market (IBCM) saw transactions grow by 152% on a weekly basis to a total of TZS 29bln ($12.59mln).

Number of trading sessions remained three, similar to the previous week. The interbank rate slightly dropped by 5bps following a 50bps drop during the previous week. The interbank rate closed the week at 3.45%.

The Treasury bills auction held on the 17th of November 2021 ended with strange and surprising results which seem as an institutional park of funds or regulatory compliance, as the bidders for 35 days and 91 days tenors accepted negative real returns.

The total offer size for the four tenors amounted to the usual TZS 78.4bln ($34.03mln). Tender size from the public was TZS 67bln ($29.08mln) in 47 bids, marking an undersubscription rate of 14.5%.

The central bank accepted 33 bids worth a total of TZS 59bln ($25.61mln) while accepting the total bid size of the 35 days.

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Author: Weekly Markets Synopsis

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