DSE bear run due to global trend

DAILY NEWS Reporter

THE Dar es Salaam Stock Exchange (DSE) ended the fourth quarter last year on a bearish position with almost all indicators declining save the bonds market that posted positive trend.

The decrease is linked to the lesser than envisaged global growth in trading and investment activities, the collapse of commodity prices affecting commodity-reliance African countries as well as the rising debts for many African economies.
According to the DSE Chief Executive Officer Quarterly Note, the bonds trading turnover increased to 135bn/- face value at a transaction value of 102bn/- compared to 123bn/- at the transaction value of 96bn/- of the previous quarter.
The market liquidity decreased by 27 percent from the transaction value of 83bn/- from 113bn/- in quarter three. Market depth from domestic listed com-panies and liquidity decreased by 5 percent to 7.73tri/-from 8.10tri/- as result of selling pressure emanating from socialeconomic needs during the quarter and decreased foreign investors’ activity.
The Tanzania Share Index (TSI) also decreased by 5 percent to 3,677.82 points from 3,855.90 points. Total market capitalisation decreased by 11 percent to 19.12tri/- from the market 21.58tri/-. The all Share Index (DSEI) declined by 11 per cent to 2,198.40 points from 2,477.24 points.
The fall is linked to the shock of global risk-aversion sparked by Brexit and the US election affected foreign portfolio investors’ agenda while contemplating their investment decisions into the continent.
This affected performance and trading activities of listed companies.
On the valuation aspect, the Weighted Average market Price Earnings (PE) Ratio for domestic listed companies was trailing at 14.04 times compared with the trailing PE ratio of 13.18 times as of September 2016.
The trailing weighted average dividend yield was 5.4 percent compared to 4.8 percent recorded in the previous quarter.