DSE liquidity increases as investor participation rises

A man stands by the bill board of the Dar es Salaam Stock Exchange (DSE) in Dar es Salaam at a past event. The bourse started the new week with a dip on Monday compared to its Friday performance. PHOTO | FILE

By Josephine Christopher

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Dar es Salaam. Liquidity levels at the Dar es Salaam Stock Exchange (DSE) increased significantly during the third quarter of this year, thanks to investors’

improved participation in equities and bond segments, latest data show.

The total quarterly equity turnover stood at Sh34.5 billion between July and September 2021: higher than the Sh29.5 billion recorded between April and June 2021.

In more or less similar vein, the bonds market recorded a turnover of Sh688.46 billion in September, up from the Sh684.46 billion recorded in June.

DSE chief executive Moremi Marwa says the increase in equity turnover was attributed to mixed active participation of both local and foreign investors.

“Most of the local investors were retail, while - as usual - foreign investments were from institutions,” he said.

Companies that led in liquidity creation were: TBL Plc, NMB Bank, Vodacom Tanzania, CRDB Bank, Twiga Cement, Jatu and the self-listed DSE.

Counters with minimal trades during the quarter were Nicol, TOL, Simba cement, DCB, and Swissport.

Mr Marwa also said that the market performance in the second quarter shows that investors have turned into less riskier investments such as bonds which helped to push the market liquidity near Sh700 billion.

“Trading activities in the secondary market for fixed income (bonds) increased due to improved investors’ appetite on long term securities,” he said.

According to the quarterly data, the total outstanding listed government bonds increased by 3.4 percent, from Sh13.76 trillion as of June 30 to Sh14.26 trillion as at September 30 this year.

This was a net increase of Sh471.56 billion.

Outstanding corporate bonds listed at the Exchange also increased slightly, rising from Sh120.1 billion onJune 30, 2021 to Sh128.89 billion on September 30, 2021.

Meanwhile, According to the recently issued DSE Quarterly Note, the market size for the 28 listed domestic companies, as measured by market capitalization, decreased slightly: by 1.6 percent (or Sh273.57 billion) during the quarter.

DSE reported that domestic market capitalization decreased from Sh9.62 trillion in June to Sh9.48 trillion in September this year as the share prices of some of the local firms dwindled.

Stocks that experienced a price drop are CRDB (19 percent) DCB (8 percent), DSE (8 percent), NMB (4 percent), TOL (4 percent) and Swissport (2 percent).

Mr Marwa said: “Regardless of the decline in the market capitalization, the overall performance of market was good compared to some of the stock markets in Africa”