Domestic Share Index Records Bullish Trend in Second Consecutive Week

By Orbit Securities

THE Tanzania Share Index (TSI) recorded a bullish trend for yet another week as Twiga Cement maintains the rally. The price of Twiga gained 3.97 per cent while closing the week at a price of 2,620/- from previous week's 2,520/- per share.

The counter closed at the highest of 2,640/- on Wednesday 04th November 2020 before partially retreating back to 2,620/- on Friday 06th November. Twiga Cement traded a total of 0.36m shares to generate a turnover of TZS 949.4m ($0.41m) to realise a weighted average price of 2,622/-.

About 83 per cent of the activities on the counter were through a prearranged block transaction executed on Wednesday. Twiga accounted for 76 per cent of the total equity turnover for the week, making the counter the top mover, toppling off CRDB from the spot.

As a result of the activities on the Twiga counter, the TSI went up by 6.85 points to close the week at TZS 3,476.02 points. Correspondingly, the domestic market capitalisation grew by 0.2 per cent to close the week at TZS 9,128.54bln ($3.95bln). The TSI is up 44.92 points since the beginning of the year, while the domestic market cap is up 1.31 per cent.

Apart from Twiga, another major mover was the NMB counter through a prearranged block transaction executed on Tuesday. The block was comprised of 172,541 shares traded at a price of 1,300/- per share, to realise a turnover of TZS 224mln ($0.97mln).

NMB accounted for 17.9 per cent of the total turnover generated during the week. NMB was followed CRDB and DSE which accounted for 4.9 per cent and 1.08 per cent of the total turnover respectively. The total equity turnover generated during the week was 52.2 per cent lower than the previous week despite having more trading sessions.

The total turnover during the week under review amounted to TZS 1.25bn ($0.54m) compared to TZS 2.61bn ($1.13m) for the previous week. The volume of shares traded during the week fell by 94 per cent week on week, to a total of 901,662 shares executed in 133 deals, up from 54 deals during the previous week.

The All Share Index (DSEI) on the other hand slightly fell by a 0.29 point to close the week at 1,782.64 points. The drop of the DSEI was caused by a fall in prices of National Media Group (NMG) and KCB Bank, by 10 per cent and 1.32 per cent respectively.

The drop of prices on the two counters neutralised the slight appreciation of East African Breweries (EABL) which gained 0.63 per cent. The total market capitalisation went down by a slight 0.02 per cent to close the week at TZS 14,799.78bn ($6.41bn).

Different from the previous week, foreign investors dominated the market while remaining net buyers. Foreign investors accounted for 68.13 per cent of the total investments during the week, and 63.4 per cent of the total divestments while locals accounted for the balance on both sides.

Market, bills and bonds Transaction value on the Interbank Cash Market (IBCM) went up more than three folds on a weekly basis. The accumulated value of transactions on the IBCM at the end of the week amounted to TZS 107.5bn ($46.56m) compared to TZS 30.4bn ($13.17m) traded during the previous week.

The interbank rates have been somewhat volatile since the end of quarter three, ranging between 3 per cent and 4 per cent. At the end of the week under review the interbank rate stood at 3 per cent which is 77bps down from the end of the previous week.

The 20 years Treasury bond was back during the week under review, on a Treasury auction held on 04th November 2020. The Bank of Tanzania offered the usual TZS 136bn ($58.87m) while the public tendered a total of 506 bids worth TZS 215.67bn ($93.36m).

The minimum successful price appreciated by 6.13bps to 100.00 per cent while the highest bid price lowered by 59bps to 103.41 per cent. The Bank of Tanzania accepted a total of 486 bids worth TZS 150.53bn ($65.17m) equivalent to 110.7 per cent of the offer size.

The weighted average price went up by 51.68bps and as a result the weighted average yield to maturity (WAYTM) lowered by 12.38bps to a WAYTM of 15.3874 per cent.

Currency market The value of transactions on the Interbank Foreign Exchange Market (IFEM) rose by 21.8 per cent to a total of $5.3m compared to $4.35m during the previous week.

The previous week had fewer trading days due to the elections and the Maulid. The shilling maintained stability with a slight appreciation of 3 pips to close the week at a weighted average exchange rate of TZS 2,309.09/USD