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DSE clutches on bearish mode as Jatu picks back up

DSE clutches on bearish mode as Jatu picks back up

The DSE equity market posted a bearish performance to end this week, with a solid turnover of 2.32bn/- attributed by pre-arranged block trades of Vodacom and CRDB Bank counters.

Voda dominated this week’s volume traded market share by 78 per cent after a pre-arranged block trade, followed by CRDB at 17.71 per cent and lastly TPCC/Twiga at 1.94 per cent.

Price movement was recorded on six domestic traded equities this week. Jatu appreciated the most by 7.32 per cent to end the week at 220/- per share, followed by TPCC up by 3.41 per cent to close at 4,240/- per share.

On the other hand, TICL share price dropped by 9.52 percent closing at 285/- per share and NICO went down by 8.47 per cent to end the week at 540/- per share, DCB lost 2.56 percent of its value to close at 190/- and the self-listed DSE depreciated by 2.53 percent to close at 1,540/- per share.

Total market capitalization dropped by 0.56 percent to 15.95tri/- and domestic market capitalization went up by 0.18 per cent closing at 10,221tri/-.

The key benchmark indices were as follows: Tanzania share index (TSI) closed at 3,865.21 points after increasing by 0.18 per cent. All Share Index (DSEI) also decreased by 0.56 per cent to close at 1,913.51 points.

While, sector Indices closed as follows; -

Industrial & Allied Index (IA) closed at

5,148.86 points, up by 0.44 per cent. Bank, Finance & Investment Index closed at 3,141.05 points, down by 0.28 per cent and Commercial Services Index closed at 2,134.28 points, unchanged from the previous week

 

Market News

NMB Bank has disclosed the result of its maiden Jasiri Bond public offer, the net proceeds from the issuance is intended to be used for lending to small and medium sized enterprises that are woman owned.

The issuance opened on 7th January offering 25bn/-, the offer attracted 74.2bn/- from applicants equivalent to a subscription rate of 297 per cent.

The oversubscription is a good indicator of capital market vibrancy in Tanzania, in the sense that the market has good absorption capacity to accommodate large debt issuances.

Furthermore the recent Treasury bond coupon reduction will make the market more interested in corporate debt issues since they are benchmarked above government securities.

We expect to see more corporate bond issues within the year.

Debt

Primary Market

Wednesday 20 April 2022, the Bank of Tanzania offered 1.0bn/- for the 35-day maturity Treasury bill while 1.7bn/- was offered for the 91-day bill, it also offered 3.0bn/- and 72.7bn/- for 182-day and 364-day maturities respectively. All the bills on offer where subscribed, consequently the weighted average yields for all bills dropped as demand for the money market instruments increased.

The 364-day bill yield fell from 3.62 per cent recorded in the last auction to 3.19 per cent loosing 43 basis points, the 182-day bill lost 9 basis points to reach 3.32 per cent from 3.41 per cent, 91 day bill lost 19 basis points to 2.65 per cent from 2.79 per cent and the 35 day bill lost 15 basis points from 2.5 per cent to 2.35 per cent.

Secondary Market

In the trading week ending April 22, the yields on government securities slightly dropped. The new 20 year Treasury bond with revised coupon began trading this week registering yields similar to previously issued bonds.

Activities in the secondary market were bearish, in line with our forecast, the value of bonds traded decreased sharply by 63.41 per cent to 25.06bn/- from 68.5bn/- recorded in the previous week. Registering a mere 32 trades relative to 48 trades in the preceding trading week.

Reduced trading activities are attributed to the market gradually adjusting to the new introduced treasury bonds.

Next week the Bank of Tanzania will auction a 7-year treasury bond, we expect the auction to register a low subscription rate as it has been the case for medium term bonds,

Outlook

Domestic listed equities have begun releasing their audited financials for 2021. As we anticipated, recovery from Covid-19 pandemic and the overall economic growth pulsates a number of companies to higher profitability.

We expect more companies to follow suit resulting to increased trading activities in quarter two.

In the fixed income market, money market yields continue to fall as the 1-year Treasury bill printed out an average yield of 3.19 per cent representing the lowest in over a year.

We expect to see as similar trend in the coming auctions.

Mr Masumbuko is a Chief Executive Officer of Zan Securities—a capital markets and securities authority licensed dealer and a member of the DSE. raphael.masumbuko@zansec.co.tz

Jatu share rallies, NICO slides

THE DSE equity market posted a bearish ...

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Author: RAPHAEL MASUMBUKO

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