Dar stocks earnings down two times in Q2

DAILY NEWS Reporter

DAR ES SALAAM Stock Exchange (DSE) stocks prices earnings ratio, on average, have gone down by almost two times while dividends yields are up 0.5 percentage points in quarter two (Q2) of this year.

The PE ratio, according to DSE’s Chief Executive Officer, Moremi Marwa, showed that the weighted rate for domestic listed was trailing at 14.12 times at the end of Q2 compared to 16.10 times of previous Q2 last year.

He said in his Quarterly Report that the trailing weighted average dividend yield was 4.7 per cent compared to 4.2 per cent in previous quarter. “On the market depth and liquidity performance side,” Mr Marwa said, “DSE, like many other Africa’s stock markets have had mixed results.”

The bourse, among other things, had been battered by a slowdown in growth, the collapse of commodity prices, adverse weather, regulatory challenges, rising debt and now the shock of global risk-aversion sparked by Brexit.

“These fundamental and sentimental based factors were on top of the Africa’s portfolio investors during the quarter under review and have impacted funds flows into the continent. “Following these factors, the domestic market capitalisation and its indices as well as market liquidity has decreased,” Mr Marwa said.

Earlier, Zan Securities Chief Executive Officer, Raphael Masumbuko said the trend was due to two main activities — global market trends and three initial primary offers which were ‘very’ successful.

“The trend is people are selling their stocks to buy new ones at IPO to leverage on secondary market,” Mr Masumbuko said thus pushing down equity prices. In the last three to four months three firms, NMB, Exim Bank issued bonds, and DSE, have raised capital through the bourse.

Their IPOs were oversubscribed by 107 per cent, by almost 100 per cent and 377 per cent correspondingly. “This might be the main reason behind the bearish mode on DSE,” Mr Masumbuko said.

Market liquidity (trading turnover) has decreased from 123bn/- in Q1, of this year to 102bn/- in this quarter. Domestic market capitalisation decreased by 7.0 per cent from 8.47tri/- as of end of March to 7.91tri/- at end of last month.