NMB share transfer boosts DSE 4th quarter turnover

NMB's Ruth Zaipuna at a past function

Summary

• In the fourth quarter, the bourse’s transaction turnover recorded was Sh443.67 billion, which was 12.7 times increase compared to Sh35.5 billion recorded in the quarter ended September 2020, according to bourse’s chief executive officer Moremi Marwa.

By Josephine Christopher

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Dar es Salaam. The Dar es Salaam Stock Exchange (DSE) turnover increased nearly 13-fold in the fourth quarter of 2020, compared to the previous quarter after the historic prearranged transaction on the NMB Bank Plc counter at the end of last year. In the fourth quarter, the bourse’s transaction turnover recorded was Sh443.67 billion, which was 12.7 times increase compared to Sh35.5 billion recorded in the quarter ended September 2020, according to bourse’s chief executive officer Moremi Marwa.
In his quarterly note, the DSE boss stated that the increase in liquidity was attributed by the huge single day transaction on December 28, where NMB Plc block traded 174,500,000 shares thus recording a turnover of Sh408.33 billion.
The deal was a transfer of shares from NMB’s largest single investor of 34.9 percent from Rabobank to an investment company, Arise.
Arise is a sub-Saharan Africa-focused investment company formed by Rabobank in partnership with the Dutch Development Bank (FMO) and the Norwegian State-owned development fund (Norfund).
On December 28, 2020, the Capital Market and Securities Authority (CMSA) in Tanzania approved the transfer of 174,500,000 NMB Bank Plc shares owned by Rabobank to Arise, an investment arm.
The share transfer process was completed on December 31, last year.
NMB is Tanzania’s largest bank by asset size, according to the third quarter 2020 financial results.
Its total assets increased to Sh7.0 trillion in the third quarter last year up from Sh6.1 trillion from the third quarter in 2019.
NMB is also the most profitable bank in Tanzania after recording Sh145 billion as cumulative net profit in the quarter that ended on September 30, 2020, up from Sh82 billion registered during a similar period in 2019.
Speaking on the transfer, NMB Bank Plc’s chief executive officer Ruth Zaipuna said, “The successful completion of the shares transfer was a testament to investors’ confidence on the institution - and the country at large.”
“The collaborative partnership between Arise and NMB is envisaged to deliver substantial operational, commercial, organizational and financial benefits with long-term market returns that go beyond stakeholders’ expectations,’’ she explained.
“Undoubtedly this long-term investment by Arise will support NMB’s future growth aspirations, and spur economic growth and the prosperity of Tanzanians through increased financial inclusion - and also the growth of retail, SMEs and agriculture sectors. NMB would like to thank all its shareholders, strategic partners, customers and staff for continued faith and dedication to the organization.”
The last time that the DSE registered a one-off transaction deal was in the third quarter of 2019, where Tanzanian tycoon Rostam Aziz officially sold his 588 million shares valued at Sh500 billion formerly held under ‘Mirambo Holdings’ to the Vodacom Group of South Africa.
During the fourth quarter of 2020, other listed counters that contributed to the liquidity creation at the bourse were: TBL Plc, CRDB Bank Plc, The Tanzania Cigarette Company (TCC), Tanzania Portland Cement Company Ltd. (TPCC), self-listed DSE, Nicol and new listing JATU.
DSE CEO’s note stated that both the size of outstanding listed bonds and the domestic equity market capitalization recorded a growth, while the total market capitalization experienced a marginal decline.
The market size for the 22-domestic listed companies, as measured by market capitalization, increased slightly by Sh159.03 billion, to Sh9.16 trillion as of December 2020, due to the increase of prices for CRDB (by 30 percent); Nicol (by12 percent) and Twiga cement (by 8 percent).
Total market capitalization which covers all 28 listed equity securities slightly declined by Sh54.37 billion, from Sh15.14 trillion as of September 2020 to Sh15.09 trillion as of end of the quarter in December.
This was attributed by the decreases in prices of some of the domestic and cross-listed companies. Local firms that experienced a drop in prices were Tanga Cement stocks by 17 percent, and Swissport by 5 percent.