Tanzania: Dar Bourse Turnover Up On TBL, NMB Shares Trading

By Weekly Markets Synopsis

REPORTS by the Dar es Salaam Stock Exchange show mixed results as the Tanzania Share Index (TSI) looks to have lost 111.97 points similar to a drop by 3.2 per cent to close the week at 3,370.67 points from previous week's 3,482.64 points.

Strange enough the domestic market capitalization, which is tracked by the TSI, went up by 0.01 per cent. Domestic market capitalization closed the week at TZS 9,148.84bln ($3.98bln) from previous week's TZS 9,147.89bln ($3.976bln).

Usually, indices move proportionally similar to market capitalization they are designed to track. Total equity turnover during the week was TZS 942.87mln ($0.41mln) more than four times compared to

TZS 203.99mln ($0.09mln) generated during the previous week.

The reported turnover was prior to cancellation of major transactions on TBL and NMB counters on Monday and Tuesday. TBL moved 44,029 shares at a price of 10,000/- on Monday 15th April 2019 which saw the counter drop by 12.28 per cent from 11,400/- to 10,000/-.

NMB moved a major weight of 50,990 shares as well, at a price of 1,980/- which saw the counter drop by 15.38 per cent. A drop of NMB price was much needed to end the illiquidity spell that hit the counter in the past three years.

Considering the similarities between NMB and CRDB, and by a relative valuation using the P/E ratios of both banks, NMB is trading at a 54 per cent premium to CRDB, which means an investor would price NMB at 1,070/- so as to get similar returns as from CRDB.

Unfortunately both transactions that dropped the prices of TBL and NMB were cancelled while the market was closed on Wednesday 17th April 2019 due to technical challenges, and when the market opened on Thursday, prices of both counters were back to last week's levels.

The turnover realized after cancellation of TBL and NMB transactions was TZS 401.61mln ($0.17mln), two times the turnover generated in the previous week.

Even after the cancellation of the Monday transactions TBL still retained the top mover spot, accounting for 77.6 per cent of the total equity turnover. TBL moved 30,170 shares during the week at prices ranging between 9,800/- and 10,500/-.

The All Share Index (DSEI) went down 67.31 points to close the week at 2,001.62 points from previous week's 2,068.93 points.

The index's decline follows a retreat in the total market capitalization by 1.77 per cent to close the week at TZS 19,588.33bln ($8.51bln) from previous week's TZS 19,942.10bln ($8.67bln).

Money Market, Bills and Bonds The amount traded in the Interbank Money Market (IMM) went down 26.4 per cent totalling at TZS 113.2bln ($49.2mln) from previous week's TZS 153.9bln ($66.89mln) mainly due to fewer trading days during the week under review.

The interbank rate climbed 14bps to close the week at 5.29 per cent from previous week's 5.15 per cent. Treasury bills subscription rate eased during the auction conducted on 17th April 2019.

The Bank of Tanzania offered the usual TZS 141bln ($61.28mln) while the market tendered TZS 171.47bln ($74.52mln) which is 21.6 per cent more than the offered amount, less than the 64 per cent oversubscription rate for the previous Treasury bills auction.

The Bank accepted TZS 121.66bln ($52.87mln) which is 86.28 per cent and 70.95 per cent of the offer size and tender size respectively. The total weighted average yield to maturity (WAYTM) eased compared to the previous auction on 03rd April 2019.

The WAYTM reported during the auction under review was 8.06 per cent, 51bps down from previous auction's WAYTM of 8.57 per cent. Currency Market The shilling remained stable during the week with a mere appreciation of 2 pips for a second week in a row.

The price of one dollar in the Interbank Foreign Exchange Market (IFEM) on Wednesday 17th April 2019 dropped to TZS 2,300.94/USD from last week's TZS 2,300.96/USD.

The total amount traded during the week was $6mln, 5.26 per cent more than the previous week's $5.7mln.