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Dar equity turnovers at lowest level in market history

Dar equity turnovers at lowest level in market history

THE market is still in a distasteful shape, with turnovers at lowest point in the market’s recent history.

Daily average turnover since the beginning of May 2020 amounts to 3.75m/- ($1,630) compared to 2.1bn/- ($917.65mln) for January and February.

Equity turnover during the week under review dropped by 15 per cent to 13.92m/- ($6,044) compared to 16.4m/-($7,106) realized during the previous week.

The Tanzania Share Index (TSI) lost a mere 0.18 point following a 2.22 per cent decline in the price of DSE.

The TSI closed the week at 3,491.92 points while the domestic market capitalization merely dropped by 0.005 per cent to close the week at 9.17tri/- ($3.98bln).

The price of DSE retreated to 880/- per share from 900/- during the previous week.

A reduced price reflects a consis- tent decline of activities on the Exchange as equity turnovers take a back seat. Reduced ac- tivities mean less transaction fees for DSE.

As turnovers drop, the Ex- change’s income reliance shifts to listed fees, mostly from over 11trr/-($4.9bln) worth of listed Treasury bonds.

The counter traded 1,200 shares to realize a turnover of 1.056m/-($458.47) while accounting for 7.6 per cent of the total equity turnover during the week. CRDB maintained the top mover spot after moving 25,284 which realized a turnover of 3.54m/-($1,537).

CRDB accounted for 25.4 per cent of the total weekly turnover. Counter dominance was scat- tered among various counters, as Swissport accounted for 20 per cent while Twiga and TBL accounted for 18 per cent and 11 per cent, respectively.

Foreign participation was still very minimal, at 4 per cent of investments while divest- ments were dominated by local investors.

Twiga and NICOL are the counters with minor intrigue to foreign investors at the moment. Foreigners’ favourite, TBL is still shying away due to over- valuation and a dry up in the off-market transactions board.

The All Share Index (DSEI) gained 6.24 points to close the week at 1,806.88 points. The total market capitalization went up by 0.35 per cent equivalent to 51.77bn/- ($22.48mln).

The total market cap closed the week at 15tri/- ($6.51bln). The gain on the DSEI results from appreciation of Kenya Airways by 50 per cent while National Media Group gained 2.5 per cent.

The substantial gain on Kenya Airways was enough to offset the depreciation of the heavyweight East African Breweries which dropped by 2.26 per cent. Other cross listed counters remained constant.

Market, Bills and Bonds The interbank rate on the In- terbank Money Market (IMM) rose by 100bps while the value of transactions dropped by more than 90 per cent.

The combination denotes stressed liquidity despite mea- sures employed by the central bank recently to assist commercial banks on potential liquidity problems caused by Covid-19.

The value of trans- actions dropped to 16.5bn/- ($7.16mln), for the data up to Wednesday, 20th May, 2020.

The amount should rise as data for the full week becomes avail- able, but not likely to surpass 202bn/- ($87.71mln) traded during the previous week.

The interbank rate closed the week at 5 per cent. The most profitable Trea- sury security was back during the week, in an auction held on 20th May 2020.

Despite a slowdown in the public’s ap- petite, the sum raised by the government rose by 18 per cent.

The Bank of Tanzania of- fered 20 years Treasury bond worth the usual 117bn/- ($50.81mln) while the public tendered a total of 230.6bn/- ($100.14mln).

The tender size is 16.7 per cent lower than the tender size from the previous 20 years Treasury bond auction held during April.

The amount accepted by the Bank of Tanzania went up to 200.7bn/- ($87.15mln) com- pared to 170bn/- ($73.81mln) during the previous auction.

Since the end of March, the Bank has been ranking up sums above the offer size, a move that has relaxed Treasury yields.

Despite the Bank raising the successful amount, the weighted average yield to maturity (WAYTM) marginally lost 6bps to 15.7886 per cent.

Currency Market Available data from the Bank of Tanzania show a total of transactions worth $8.4mln went through the Interbank Foreign Exchange Market (IFEM) up to Wednesday 20th May, 2020.

This is 11 per cent less than the previous week. When data for the full week is available, the total traded amount should change and most likely surpass the transaction value for the previous week.

On the IFEM, the shilling has maintained slight deprecia- tion similar to past weeks.

The shilling lost 11 pips during the week under review, to close the week at a weighted exchange rate of TZS 2,303.09/USD.

As lockdowns are being lifted in different countries as they attempt to revamp economic activities, as well as recom- mence of tourism activities do- mestically, inflows are looking to boost the shilling from the current trajectory.

Mwalimu Julius Nyerere’s biography


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Author: Weekly Market Synopsis

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