Bearish mood stays at DSE despite in increase turnover

By Correspondent

The CEO of the Dar es Salaam Stock Exchange, Moremi Marwa. (File photo)

 Total turnover last week at the Dar es Salaam Stock Exchange (DSE) increased by nearly three times from the previous week’s total trading but the increase was not enough to put the equity market out of the red zone.

 

In spite of the 185 per cent surge in the trading, the market capitalization and All Share index remained relatively low compared to the trading mood before the General Election fever started affecting business at the bourse.

 

The market capitalization during the two weeks under review remained unchanged at 21.1trn/-.

 

Brokers said the stock mart will continue experiencing low turnover from mostly foreign investors as the country heads towards the polls on Sunday.

 

 Monday’s trading session confirms the bearish atmosphere that has gripped the market most of this month and September.

 

“Today, DSE recorded a total turnover of 1,960.74m/- from 324,799 shares traded in 99 deals compared to the previous session which recorded a turnover  of 11,252.31m/- from 3,243,573 shares traded in 83 deals,” the bourse said in its Monday market report.

 

The market capitalization on Monday was about 21.02bn/- compared to 21.05bn/-, 21.09bn/- and 23.09bn/- on Friday, October 12 and October 30 (in 2014) respectively.

 

The turnover from shares bought by foreign investors on Monday was 3.06m/-. On Friday, the foreigners bought shares amounting to 8.64bn/- whereas on October 14, 2014 their turnover was 96.99bn/-

 

Last week, broker Tanzania Securities said in its weekly report  that trading data from the bourse showed foreign participation on buying side since the beginning of this month stood at 38.11 per cent or a turnover of 7.81bn/-. 

 

This was contrary to the July-September participation margin of 88.46 per cent that contributed to the turnover of 196.6bn/-, the report added.

“DSE is experiencing low turnover from foreign investors as the country is heading towards General Election…. We anticipate foreign investors' participation to remain low until after elections," the broker said in the reporter.

 

According to it, this was not the first time DSE trading dipped prior to General Election. Tanzania Securities said a similar trend was observed in 2010.

 

However, some capital markets experts say there was no direct link between the election and trading at the bourse although this happens quite often in developed markets.

 

The dull performance is also associated with the on-going depreciation of the shilling.

 

Although the DSE Weekly Update on Monday said foreign investor participation was high during last week’s trading, it was still low compared to their previous involvement.

 

According to it, foreign participation at the bourse during the week ending October 16 was 37.05 per cent of the total turnover. Foreign participation was mainly on the TBL counter with 34.6 per cent of the total turnover.

 

“”Week on week turnover recordings increased. The week recorded a total turnover of 24.35bn/-, three times up in comparison to a turnover of 8.5bn/- in the previous week,” the DSE report on weekly turnover trends reads in part.

 

According to it, the All Share Index lost 6.13 points to settle at 2403.58 points from 2409.71 points the previous week. The report said that the loss emanated from a decrease in share prices on the EABL, JUBILEE, KENYA AIRWAYS, NMG, SWISSPORT, TCCL, TPCC and USL counters.

 

During the week, the number of shares sold and purchased dropped by almost 27 per cent to 10.9 million from the 14.8 million level recorded during the week ending October 9.

 

Speaking to journalist on Monday, DSE official Patrick Mususa said the busiest counter was CRDB, which accounted for about 86.5 per cent of the total shares transacted. The other top performers were TBL and TCC whose counters accounted for nearly 11 per cent and about 1.4 per cent of the transactions respectively.

 

The CRDB counter was still the most active on Monday after 200,946 shares were traded at its counter out of the day’s 324,799 total. The banker’s share fetched an average of 370/- per share in 56 deals.

 

Mususa also said that the market capitalisation remained unchanged at 21.1trn/-.“This week (October 12 -16), a 10 years bond with 11.44 coupon rate and a face value of 2.6bn/- was transacted at a price of 72.4068 per cent,” the DSE Weekly Update said.