Equities

Equities market regains its dominance on Tanzania’s capital markets

The Dar es Salaam Stock Exchange (DSE) market report has shown the value of equities market capitalization opened the week at 16.04trn/- against 15.97trn/- of the outstanding bonds market from 16.05trn/- against 16.09trn/- of outstanding bonds market on Friday last week.

Out of total equities market capitalization, domestic companies were  valued 10.28trn/- on Monday this week, a slight gain from 10.27trn/- recorded on Friday last week due to increase of CRDB Bank Plc share price to 400/- from  395/- respectively.

The slowdown of the bonds market resulted from the decrease of outstanding government bonds market to 15.86trn o Monday close, from 15.99trn/- recorded during the closing trading session of last week.

However, the combined value of corporate bonds and sustainable bond remained unchanged at 104.85bn/- during the period.

During the end of August last year, the value of equities markets amounted 16.61trn/- against 14.2trn/- of bonds market, but later the bonds market overtook equities market due to slowdown of share prices, mainly cross listed companies from Nairobi Securities Exchange (NSE).

According to the Zan Securities Chief Executive Officer Raphael Masumbuko, the domestic equity market has been bearish in the last few weeks following good quarterly results published by a few companies.

“We expect more trading activities in the coming weeks. Investors have priced in better valuations for a number of counters hence stocks have started registering an upside movement. Resilience of the Tanzanian economy on inflationary pressures stemming from surging commodity prices is bringing optimism among stock market investors, ,” Masumbuko said.

However, government bonds are continuing to remained attractive investment avenue for both local and foreign investors, but recently decision by the Bank of Tanzania (BoT) to reduce prices for bonds market caused many to venture into equities market.

The DSE data shows during the half of the third quarter of this year, a total equities market turnover of 13.8bn/- has been recorded against bonds face and transaction values of 253.23bn/- and 301.60bn/- respectively.

Local investors have continued to dominate the equity market participation during this ongoing quarter of the year, as they accounted for 76.34 percent of the value of selling shares and 53.06 percent of buying shares.

During the last quarter, reports show, the value of turnover from shares bought by local investors was 37.80 percent while the share of turnover from selling shares was 32.51 percent of total market selling turnover.

During the last quarter, a total turnover in equity market amounted 40.23bn/- of which foreign investors injected 25.02bn/- through buying shares, which was 62.20 percent and 27.15bn/- through buying shares, which was 67.49 percent.

The report shows during the third quarter of last year, a total turnover of 34.48bn/- recorded of which foreign investors injected 19.8bn/- through buying shares and 20.5bn/- through selling shares.


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