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Dar exchange indexes register slight decline

Stock Market

BOTH, the Tanzania Share Index (TSI) and the All Share Index (DSEI) marginally fell during the week that ended on the 26th June 2020. The TSI lost a marginal 0.13 point following a 0.004 percent decline of the domestic market capitalisation.

The TSI closed the week at 3,486.86 points while the domestic market cap stood at TZS 9,156.95bln ($3.97bln) at the end of the week.

The DSEI lost 2.35 points to close the week at 1,831.96 points. The drop of the DSEI follows a 0.13 per cent drop of the total market capitalisation. The total market cap closed the week at TZS 15,209.5bln ($6.59bln).

The total market cap is still 11 per cent down compared to the beginning of the year. This is a result of the meltdown in the Nairobi Stock Exchange (NSE), during mid-March following the coronavirus outbreak. The NSE has since been slowly recovering but the losses are still apparent.

The retreat of the major indices is caused by a decline of prices on four counters, three being from the cross listed board. The only red domestic counter during the week was NICOL which released 2.94 per cent of its price, to close the week at a price of 165/-.

On the cross listed board, Kenya Airways led the losing streak by 8.3 per cent, although the counter is still 10 percent up year to date.

The bill to nationalize the airline is now tabled at the Kenyan parliament waiting deliberation by legislators. The Kenyan government plans to buy-off minority shareholders and KLM at a premium from the current market price.

The premium is yet to be specified. Other shareholders, mostly banks, shall see their stake revised into Treasury bonds. Nationalisation is deemed necessary to save the loss making airline.

Despite a significant growth in profits since 2017, the net loss margin for the airline has risen from 6.6 percent in 2018 to 10.1 percent in 2019.

East African Breweries (EABL) and Jubilee Holdings (JHL) were the other cross listed counters on the red, and depreciated by 1.06 per cent and 0.93 percent respectively. The declined counters were enough to offset the appreciation of 1.94 per cent on the giant KCB Bank counter.

Equity turnover realised during the week was 86 percent lower compared to the previous week. The total equity turnover realised totaled to TZS 471.93mln ($0.205mln). A total of 401,621 shares were traded in 73 deals to realize the turnover. Both, the number of deals and the volume of shares were fractions of their counterparts during the previous week.

Tanzania Breweries Ltd (TBL) and Vodacom Plc (VODA), closely led activities during the week while TBL slightly emerged at the top. TBL traded a total of 42,001 shares at a weighted average price of 5,257/- to realize a turnover of TZS 220.8mln ($0.096mln), somewhat 46.8 per cent of the total equity turnover realised during the week.

On the other hand, Vodacom traded a total 256,120 shares at an average price of 850/-, to realize a turnover of TZS 217.68mln ($0.094mln), somewhat 46.1 percent of the equity turnover. Majority of the transactions were still executed through the pre-arranged board.

Foreign investors were net sellers during the week, with a net outflow of $0.085mln while local investors dominated both sides of the market. Local investors accounted for 99.3 percent and 57.6 percent of the buy and sell side respectively while foreign investors accounted for the balance.

Auctions on the Tanzania Mercantile Exchange (TMX) are on-going, with the current season of sesame seeds. Two auctions for sesame seeds were held during the week, in warehouses located in Dodoma, Mtwara and Pwani regions.

A total of 5.56mln kilograms of sesame seeds was sold during the auctions. The highest price was TZS 1,793/0-realised in Mtwara while the lowest price was TZS 1,442/-realised in Pwani. The prices were relatively down compared to the previous week.

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Author: Weekly Markets Synopsis

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