By Orbit Securities
THE two major indices went on different directions during the week that ended on 18th December 2020 after counters seeing mixed movements. The All Share Index (DSEI) was on the red after most cross
listed counters decelerated while CRDB and JATU pulled the Tanzania Share Index (TSI) up.Twiga Cement dropped by 0.78 per cent and was offset by the appreciation of CRDB and JATU. The TSI went up 4.03 points following a 0.116 per cent increase of the domestic market capitalization. JATU was the top gainer similar to the last three weeks after jumping by a staggering 56.5 per cent following the rising demand of the counter.
JATU is up more than 240 per cent since it was listed less than a month ago. CRDB was another gainer which went up by 2.63 per cent to close the week at a price of 195/- per share. The TSI closed the week at 3,486.95 points while the domestic market cap stood at TZS 9,158.17bln ($3.97bln).
The mystery of the sharp rise in the price of JATU is mostly due to two main factors. One is the membership requirement to own at least 200 shares to be eligible to participate in the farming project. With a limited number of shares, the requirement raises the counter's price with a consideration that only 110 is enough to alter the counter's price.
The second factor is the sharp rise itself which sets a momentum of speculators to vie on the shares. An independent valuation included in the Information Memorandum used during listing, values the counter between 410/- and 430/- compared to the market price of 1,440/- at the end of the week under review.
The total market capitalization dropped by 0.42 per cent and as a result the DSEI went down by 7.5 points. Despite the climb on CRDB and JATU, East African Breweries (EABL) and KCB Bank (KCB) dropped enough to tilt the balance to a net deceleration on the index.
EABL dropped by 3.13 per cent while KCB dropped by 0.66 per cent. Jubilee Holdings (JHL) went up by 5.22 per cent but was not enough to pull up the effect of the giants. The total equity turnover rose by 9.6 per cent to a total of TZS 958.16mln ($0.41mln) while the volume of shares traded went up by 37.7 per cent.
The total volume of shares mounted to 2.82mln traded in 167 deals. CRDB recouped the top mover spot after moving 2.03mln shares and accounting for 41 per cent of the total equity turnover. CRDB realized a weighted average price of 193.54/- compared to the market price of 195/-.
CRDB was followed by VODA which accounted for 29.8 per cent after moving 714,141 shares to realize a weighted average price of 400.157/-.VODA saw a prearranged block transaction involving 713,811 shares at a price of 400/- per share on Tuesday 15th December 2020. The official market price of Vodacom is still 770/-.
Foreign investors were net buyers after accounting for 60.94 per cent of the total investments during the week while locals accounted for 70.02 per cent of the total divestments. The net inflow from foreign investors totaled to $0.13mln.
Market, Bills and Bonds The Interbank Cash Market (IBCM) saw a total of TZS 37.3bln ($16.15mln) traded on its counters. The total value of transactions was more than double compared to the week before which was TZS 14bln ($6.06mln). The interbank rate remained volatile after dropping by 17bps.
The interbank rate at the end of the week under review was 3.5 per cent. The oversubscription rate of the 20yrs Treasury bond rose by 227bps to 60.86 per cent in the auction held on 16th December 2020.
The Bank of Tanzania offered the usual TZS 136bln ($58.87mln) while the tender size received from the public amounted to TZS 218.76bln ($94.7mln) from 595 bids. The spread between the highest and lowest bid prices narrowed from 13.41/- to 8.0856/- after the lowest bid price rose by 5/-.
The Bank of Tanzania accepted a total of 575 bids worth 188.26bln $81.5mln), leaving TZS 30.5bln ($13.2mln) on the table. The weighted average coupon yield lowered by a marginal 0.5 basis point as a result of a marginal rise on the weighted average successful price.
Currency Market The value of transactions on the Interbank Foreign Exchange Market (IFEM) went up by 50.8 per cent to a total of $4.17mln. The shilling remained resilient with a marginal depreciation of a pip.
The shilling closed the week at TZS 2,.309.11/USD.
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