Tanzania Share Index (TSI) breaks past 4000 points on Thursday almost five years since the segment was introduced at the Dar es Salaam Stock Exchange (DSE).
The index launched in September 2018 is a statistical measurement of the performance of domestic stocks listed on the DSE and closed the yester-session at 4000.9 points, mainly boosted by banks.
Zan Securities, Advisory and Research Manager, Isaac Lubeja, TSI provides investors with a snapshot of the performance of the domestic market while its momentous portrays of the country’s economic growth.
“This milestone moment is a clear indication of the growth and stability of the Tanzanian economy, which has been boosted by positive earnings from some of the country’s largest banks.
“A growing economy typically leads to higher profits for companies, which in turn can drive up stock prices and cause a stock market index to gain points,” Mr Lubeja told Daily News on Thursday.
Two of the biggest contributors to this growth are CRDB and NMB, which have recently disclosed their year-on-year growth in net profit.
CRDB reported a growth of 31 per cent while NMB reported an impressive 46 per cent.
“This profit growth is a testament to the sound management and strategic investments made by these banks, which have allowed them to continue to thrive even in challenging global economic conditions experienced last year,” Mr Lubeja said.
CRDB posted a historical net profit of 353/- last year while NMB recorded yet another industry record-breaking performance, delivering a net profit of 429bn/- for a similar period.
“The performance has not gone unnoticed by investors, who are now rushing to buy their shares, Mr Lubeja said adding:
“The demand for these shares has driven up their prices, and this has been reflected in the stock market”.
CRDB price gains 7.9 per cent to 425/- and NMB by 22.86 per cent to 3,440/- since the turn of the year demonstrating a level of confidence that investors have in these banks and their prospects.
Overall TSI has been experiencing a steady increase in recent months, which has helped it to reach its current high level.
Registering an impressive 9.0 per cent year-year growth last year, clearly swimming against the global tide of macro-economic uncertainties and sell-offs.
“This growth in the TSI is expected to continue, as more and more investors seek out opportunities in the Tanzanian Market,” Mr Lubeja said.
The economy, according to the central bank, grew by 5.2 per cent in the first three quarters of last year against 4.8 per cent and economists tipped it will outpace the projected growth.
The economy grew in the first three quarters of last year painting a promising picture of overtaking the targeting 4.7 per cent set for 2022.