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DSE on bearish side despite  stocks price increment

DSE on bearish side despite stocks price increment

THE DSE equity market ended this week on the bearish side recording a performance of 947.26m/-.

Top trading counters this week were TBL which dominated the market share by 46.41 per cent, followed by NMB at 17.23 per cent, TPCC at 8.78 per cent and lastly CRDB at 5.22 per cent. Price movement was recorded on eight domestic traded equities this week.

TPCC/Twiga was this week’s top gainer up by 9.47 per cent to end the week at 3,700/- per share, followed by Swissport up by 5.77 percent to close at 1,100/- per share, DCB also went up by 2.63 percent to close at 195/- per share and the selflisted DSE ended the week at 1,980/- per share after appreciating by 2.06 percent.

On the other hand, CRDB counter depreciated 4.76 percent to close at 400/- per share, TCCL/Simba went down by 3.70 percent to close at 1,560/- per share and Jatu share price dropped 2.78 percent to close at 350/- and NMB closed at 2,960/- per share after dropping 1.99 percent.

Total market capitalization went down by 1.13 percent to 15.584tri/- and Domestic market capitalization also went down by 1.10 percent closing at 10.309tri/-.

The key benchmark indices were as follows; - Tanzania share index (TSI) closed at 3,898.79 points after decreasing by 1.10 percent. All Share Index (DSEI) also decreased by 1.13 percent to close at 1,869.53 points.

Sector Indices closed as follows; - Industrial & Allied Index (IA) closed at 5,042.58 points, down by 0.63 percent. Bank, Finance & Investment Index closed at 3,399.18 points, down by 2.89 percent. Commercial Services Index closed at 2,138.49 points, up by 0.12 percent.

Market News

The National Bureau of Statistics this week released Inflation numbers for May whereby, the Annual Headline Inflation Rate for the month of May, 2022 has increased to 4.0 per cent from 3.8 per cent recorded in April, 2022.

The increase of headline inflation explains that, the speed of price change for commodities for the year ended May, 2022 has increased compared to the speed recorded for the year ended April, 2022. The overall index went up from 104.22 recorded in May, 2021 to 108.42 in May, 2022.

B. DEBT Primary Market

The Central bank was in the market on June 8, 2022 offering 123bn/- to investors through issuing a new 15-year treasury bond. The auction under-subscribed, unconventional for the 15 year Treasury bond, however we see the low subscription rate of 73 per cent attributed to the effects of the reduced coupon rates.

We mentioned in our previous special report that the reduction of coupons will slightly deter investors from primary auctions, we foresee this being the case for the near future. Low participation will mean yields will slightly edge higher due to absence of aggressive pricings in auctions.

Total amount tendered was 90.33bn/-, the minimum successful price printed at 98 as the central bank rejected aggressive bids priced at low discounts.

Average yield to maturity for the auction stood at 11.26 per cent. With the introduction of new issues, we expect the yield curve to adjust upwards in the mid to long end, as old bond yields converge with new ones.

Secondary Market

In the trading week ending June 10, the yields on government securities in the secondary market remained relatively unchanged, however the 15-year bond registered a slight uptick, following the primary auction result of the new 15 year bond having a slight price effect on the respective bonds in the secondary market.

Activities in the secondary market were vibrant, tenures traded included 7,10,15,20 and 25. Number of trades doubled from 26 trades recorded in the previous trading week to 55 trades in the trading week ending June 10.

Furthermore, value of bonds traded increased by 71.33 per cent to 52.24bn/- from 30.49bn/ recorded in the previous week. June 15, the Bank of Tanzania will be auctioning treasury bills, we expect yields to slightly register a downtick.

Outlook

Equities As we have previously highlighted, in the ex-div period that the market is in, stocks will slightly register a downside albeit this fall in price is not due to company fundamentals or the general outlook of the equity market, rather a reflection of ex-dividend period that the market is currently in.

Counter such as CRDB, TPCC and NMB have registered a slight fall in price of -5 per cent, -5 per cent and -2 per cent respectively.

However, we are going to see a slight upside post ex-div, subject of course to each companies results for quarter 2 of 2022. 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

DSE on bearish side despite  stocks price increment

THE DSE equity market ended this week ...

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Author: RAPHAEL MASUMBUKO

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