DURING the trading week ending on September 06th, the Dar es Salaam Stock Exchange (DSE) saw a decrease in turnover compared to the prior week.

The total market turnover decreased to 685.79m/-, reflecting a 2.18 per cent downtick from the previous week’s 701.06m/-.

There were no activities in the pre-arranged board for the week. Throughout the week, CRDB dominated trading activities, representing 70.75 per cent of the total market turnover, followed by NMB at 17.88 per cent and NICO at 3.43 per cent.

MBP gained 9.68 per cent closing off the week at 340/- per share. However, NICO lost 2.56 per cent reaching 760/- per share and DSE share price de creased by 1.64 per cent concluding the week at 2,400/- per share.

In terms of market capitalisation, there was a general increase in the size of the markets, with total market capitalization increasing by 0.74 per cent to 17.678tri/- by the week’s end.

However, domestic market capitalisation decreased by 0.01 per cent, reaching 12.299tri/-.

Key benchmark indices 

All Share Index (DSEI) closed at 2,118.14 points increasing by 0.75 per cent.

Tanzania Share Index (TSI) closed at 4,643.45 points decreasing by 0.01 per cent.

Sector Indices 

Industrial & Al lied Index (IA) closed at 5,072.27 points, unchanged from the previous week Bank, Finance & amp; Investment Index closed at 5,830.95 points, down by 0.03 per cent Commercial Services Index closed at 2,134.27 points, unchanged from the previous week.

BoT okays CRDB to invest outside Africa The Bank of Tanzania (BoT) has issued a No Objection Certificate (NOC) to CRDB Bank Plc for its plans to expand operations beyond Africa, citing the bank’s financial stability and performance.

CRDB will now be the first bank from Tanzania to expand beyond the African continent, joining a few banks from other countries such as Nigeria, Ghana and South Africa (ABSA).

These banks have subsidiaries outside Africa, including Dubai, United Arab Emirates (UAE), London and New York.

CRDB Plc is among the top five banks generating significant profits in East Africa.

Highlights:

Debt Market Primary Market on Wednesday 4th September 2024, the Central Bank was in the market offering 206.170bn/- to investors for the re- opening of the 25-Year Treasury bond offering a 15.95 per cent coupon rate annually.

The auction was sub scribed by 217.82 per cent – the auction received bids totaling 449.072bn/- and accepted bids worth 335.087bn/-.

This is the first re opened 25-year Treasury bond in 2024/25 after the issuance of the new calendar for the first half of the fiscal year 2024/25.

With the amount offered by BOT being 206.170bn/-, the minimum price in this auction has decreased from 105.55 in the previous auction held in June 2024 to 101.4999 and the weight ed average yield has seen an increase by 3.72 basis points from 15.3816 per cent in June to 15.4188 per cent in this auction.

The high subscription rates continue to reflect higher demand for the longer-term maturities due to the higher coupon of 15.95 per cent and increased yields.

Secondary market

During the week ending on September 06th, market activities saw a decrease compared to the previous week. Overall turnover decreased by 50.93 per cent, from 23.2904bn/- to 11.4296bn/-.

However, there was a slight increase in the number of trades, rising from 64 to 65.

Trading activities primarily focused on the long end of the yield curve, with the 20-year and 25-year bonds traded contributing to 95.46 per cent of the total turnover.

In the corporate bond segment, there was an increase in activity compared to the previous week.

KCB corporate bond KCB 2022/25.T1 recorded one trade with a face value of 20m/- at 100/-. NMB corporate bond NMB-2023/26.

T1 recorded two trades to talling 21m/- at an average price of 89/-. NMB corporate bond NMB-2022/25.T1 recorded one trade with a face value of 1.0m/- at 96/-.

NBC corporate bond NBC-2022/27.

T1 recorded three trades to talling 300m/- at an average price of 90/-.

Outlook:

Equity Market Outlook: The equity market may experience a slight sell-off in the coming weeks.

The Banking Finance and Investment Index (BI) recently declined by 0.03 per cent week-on-week, reflecting a knee-jerk reaction to the recently released financials.

However, domestic equities remain resilient, with the Tanzania Share Index (TSI) delivering a 7.88 per cent return year-to-date.

Despite this overall strength, we might see some price pullbacks in counters like NICOL and TOL.

NICOL’s modest 4.8 per cent year-on-year increase in net income has left investors skeptical about the potential for impressive full-year results, while TOL’s decision to forego dividend payments and instead use retained earnings to fund ongoing investment projects may also impact its share price.

As we approach the end of the third quarter, the focus will shift to Q3 earnings reports, expected to be released in the last week of October.

These reports will provide crucial insights into corporate performance and are likely to have a significant impact on market sentiment.

Companies in the banking and investment sectors, which have performed well throughout the year, are expected to report strong results, potentially boosting investor confidence.

Debt Market Outlook: 

The debt market is likely to face challenges due to tightening liquidity and rising yields.

The recent oversubscription in the 25-Year Treasury bond auction indicates that investors are seeking to lock in higher coupon rates.

However, as investors begin to shift their focus towards equities, demand for fixed-income securities may decline, putting additional pressure on bond prices and driving yields higher.