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Dar es Salaam Stock Exchange turnover improves by 7 per cent

Dar es Salaam Stock Exchange turnover improves by 7 per cent

Stock Market

The turnover generated on the stock market this week improved slightly by 7% from TZS 0.9Bln recorded on the previous week to TZS 1.01Bln ($0.4Mln) generated on the week under review.

Furthermore, the number of shares that was transacted on this week was 68% higher than previous week. This week the bourse transacted over 700,000 shares up from 400,000 shares transacted over the previous week.

Despite the small improvement recorded the activities on the bourse have become relatively sluggish on the past two weeks, due to slowdown in counter transactions.

The market value of the total market denoted by the All-Share Index (DSEI), shed some TZS 296Bln to close at TZS 15.29Trn ($6.61Bln) while the domestic market also shed some TZS 56Bln closing at TZS 10.25Trn ($4.43Bln) market cap.

The decline in the market caps indicates a greater price decline on the counters on the bourse. Following the dividend payments of the major banks during the week, the banks’ stock prices went down, with some other counters.

CRDB this week was the top loser this in a second week in the row the counter has recorded a share price decline. This week the counter went 5% down closing at TZS 380 from TZS 400 at the start of the week.

The counter generated around TZS 100Mlln, transacting over 250,000 shares. TCCL (Simba) declined further his week, down by 3.8% closing at TZS 1,500 from TZS 1,560 of previous week.

TCCL exchanged over 18,000 shares generating a turnover of TZS18.85Mln. Other losers of the week included DCB bank, DSE and JATU counters declining by 2.5%, 2% and 1.4% respectively. DCB closed at TZS 190, down from TZS 195, while DSE and JATU closed at TZS 1,940 and TZS 345 respectively.

Notwithstanding the recorded decline in a number of stocks, most counters remained unchanged while only a couple of counters recorded a positive move.

SWISS (Swissport) one of the few aviation stocks which had been faced with steady decline in its share price for the past three (3) years, being the effects of the Covid-19 saga and the liberalization of the JKNI and KIA airports sow the company at its lowest performance financially and on the stock market.

In the last year the company has seen a revamp in its businesses to the point of recording a profit of about TZS 2Bln from a loss reported prior of TZS 2Bln.

For the first time in 2years the company had announced a dividend per share of TZS 29.8. With the recovery of travel industry post-Covid, coupled with the company’s move to diversify their source of income to the lounge business, this year the company is most likely to improve its gains and profits and investors are not missing this opportunity.

We have observed the counter gaining momentum in the past three weeks and this week the counter again recorded a 1.8% gain to close at 1,120 per share. NICOL also recorded a 1.45% gain to close at TZS 350 per share.

Foreign investors continued to lead market activities, whereby this week foreigners have dominated the purchases and were in tie with locals on the sell side.

A total of TZS 0.54Bln turnover was generated on the buy side and TZS 0.5Bln on the sell side by foreigners equivalent to 53.71% on buy side and 50.04% on the sell side. Locals on the other hand, bought shares worth TZS 0.47Bln and equivalent to 46.29% and sold shares worth TZS 0.51Bln equivalent to 49.96% of the market.

Treasury Bills Auction

The bank of Tanzania on behalf on the government held treasury bills auction this week. The auction carried a total offer of TZS 75.4Bln ($32.61Mln) slightly lower than the usual TZS 78.4Bln, because the

182- day auction was not on offer this week. The public tendered TZS 54.2Bln ($23.44Mln) to this auction, falling short by TZS 21.2Bln ($9.17Mln) to the offered amount. We anticipate the undersubscription for the auction might be due to the fact that investors are more invested into the upcoming 20-year treasury bond auction next week.

Due to the slowdown in the appetite of this auction the yields have slightly recovered upwards following the price decline. The yields for the three papers auctioned this week stood at 2.3%, 2.77% and 4.81% for 35-days, 91 days and 364 days treasury bills papers.

Money Market

The Interbank Cash Market (IBCM) for the week ended 10th June recorded a TZS 156Bln worth of transactions a 25% hike from TZS 124.6Bln that was transacted on the week prior.

The interbank rate has remained steady averaging about 2% throughout the week, although some transactions carried a rate as high as 4.5% but overall weighted average Interbank rate remained lower at around 1.6% to 2.4%.

Budget Highlights for the Capital market

The minister of Finance and planning on 14th June 2022 presented the government’s budget for the year 2022/2023.

One of the adjustments that will benefit capital markets investors directly is the removal of withholding tax on both corporate bonds and municipal bonds which previously were charged 10% withholding tax on the coupon amount disbursed to investors.

orbit@orbit.co.tz; wende@orbit.co.tz

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Author: WEEKLY MARKET

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