Tanzania: Activities On Dse Remain Down Despite Turnover Rebound Stock Market

By Weekly Markets Synopsis

ACTIVITIES on the Dar es Salaam Stock Exchange are still dwindling as turnovers are at the

lowest in the recent history of the Exchange.

During the week that ended on 29th May 2020, the total weekly turnover grew more than 22 folds, thanks to an off-market transaction on the TBL counter.

The total equity turnover for the week under review grew to 317.05m/-($0.14mln) realized in a total of 61 deals.

Five off-market block transactions that took place on Thursday, worth 300m/- ($0.13mln) were enough to make TBL the top mover of the week. TBL accounted for 95 per cent of the total equity turnover realized during the week.

TBL was followed from a far by CRDB which accounted for 2.2 per cent of the total weekly turnover. DCB moved 19,870 shares at an average price of 290/- per share, leading to a 1.69 per cent deceleration of the counter's price. On the other hand, NICOL gained 3.03 per cent after moving 8,000 shares.

Due to its lower weight, the appreciation of NICOL was not enough to offset the deceleration on the DCB counter, resulting on a slight shed on the Tanzania Share Index.

The price of NICOL gained despite a 67 per cent decline in the company's annual profits. During the week, the fund manager released annual financial results for FY2019.

In the report, the company noted an expropriation of the company's 51% stake in Tanzania Meat Company (TMCL) by the Ministry of Livestock and Fisheries. The company is to take legal steps to protect shareholders' interests.

NICOL's shareholding register has further been updated to match the register which previously existed at the Exchange.

The total number of shares as of 31st December 2019 was 69.16mln shares. Further, the company reported a total comprehensive loss due to a 1.64 per cent decline in the fair value of financial assets, especially equities.

The total equity turnover for the month of May dropped significantly by 73.4 per cent compared to April. The total turnover for May was 373.36m/-($0.16mln) compared to 1.4bn/- ($0.61mln) realized during April. Turnover has been declining since March as a result of a global shakeup from the coronavirus, but also due to stringent trading rules on the Exchange.

The Tanzania Share Index (TSI) slipped by a marginal of 0.05 point to close the week at 3,491.87 points following a slight deceleration of the price of DCB Bank.

The domestic market capitalization followed suit after a marginal loss of 0.001 per cent equivalent to 120m/- ($0.05mln). The domestic market cap closed the week at 9.17tri/-($3.98bln).

The All Share Index (DSEI) gained 2.21 points to close the week at 1,809.09 points following a 0.12 per cent appreciation of the total market capitalization.

The total market cap closed the week at 15.01tri/- ($6.52bln). The appreciation of the DSEI is a result of a price increase on cross listed giants.

East African Breweries and KCB Bank both grew by 1.73 per cent and 1.3 per cent, offsetting a 16.7 per cent and 2.4 per cent deceleration on Kenya Airways and National Media Group. Jubilee Holdings and Uchumi Supermarket both remained constant.

Foreign participation is still minimal, although, through the TBL off-market transactions, foreign investors accounted for 94.6 per cent of divestments while locals accounted for 99.57 per cent of investments. Foreign investors sold a block of TBL while local investors bought the block.

Market, Bills and Bonds

The interbank rate remained at 5 per cent during the week under review while activities slightly slowed down compared to the previous week. The value of transactions on the Interbank Money Market (IMM) slowed down by a marginal 1.8 per cent to a total of 16.2bn/- ($7mln). Activities on the IMM have been increasingly slower possibly as a result of decreased lending activities following a slowdown of economic activities resulting from the coronavirus.

In a Treasury bills auction held on 27th May 2020, the Bank of Tanzania accepted 33% of the bids while the auction was undersubscribed by 5 per cent. The Bank of Tanzania offered the usual amount of 107.2bn/- ($46.54mln) while the public tendered a total of 101.85bn/- ($44.22mln) from 54 bids. The Bank accepted only 19 bids worth a total of 35.75bn/- ($15.52mln).

The weighted average yield to maturity (WAYTM) maintained deceleration after losing 23bps during the auction under review. The WAYTM realized during the auction was 4.52 per cent compared to 4.75 per cent realized during the previous similar auction.

Currency Market

Activities on the Interbank Foreign Exchange Market (IFEM) rose by 16 per cent as the shilling maintained continuous depreciation. The total value of transactions on the IFEM was 9.75 million US dollars compared to 8.4million US dollars realized during the previous week. The weighted average exchange rate during the end of the week was TZS 2,303.30/USD.

orbit@orbit.co.tz; imani@orbit.co.tz,