28 April 2011

Tanzania: DSE Experiences Slow Trade

THE Dar es Salaam Stock Exchange (DSE) experienced a slow trading for two consecutive days after Easter break and the Union Day.

However, stockbrokers say that the slow trade had little impact on the bourse to move the indexes -- DSE all-share index (DSEI) and Tanzania Securities Index (TSI) either direction.

Zan Securities Chief Executive Officer, Mr Raphael Masumbuko said on Thursday that the bourse is flooded with CRDB Bank shares with a few buyers and on other hand, a big demand of cement shares with no supply.

"This phenomenal left the bourse with fewer activities as there is mismatch on demand and supply while sellers are holding the shares hoping for handsome dividends," Mr Masumbuko said.

He added that the impact was slightly higher before Easter as holidaymakers wanted to raise some cash but the impact was too small to be felt.

Moreover, the broker said the high supply with no demand are putting extra down-spiral pressure on CRDB share price and a slight drop of the value.

According to the DSE Daily Report, the indexes dropped slightly last week a day before Good Friday by over one per cent due to CRDB share price drop. CRDB share now trades at 188/-.

Since Monday the DSEI stagnated at 1185.41 points and TSI at 1028.16 points, the same level the market closed on last Thursday's trading. Brokers say that there is high demand for stocks of cement companies but the market experienced a poor supply to match the trend.

"It is most likely that the sellers are holding the stock anticipating a handsome dividends from these firms," a broker said, a minute before the closing of the trading yesterday.

Though the demand is high for two cement firms -- Tanga Cement and Twiga Cement -- no seller is willing to dispose of, and kept the price at 1,940/- and 2,500/- respectively.

The two cement firms have called for the Annual General Meetings which will approve and shed lights on the movement of current and future amount of dividends to be paid per share.

According to the financial results posted recently, Tanga Cement's revenue grew by 24 per cent to 149.2bn/- compared to 119.9bn/- recorded in the previous year. Earnings per share (EPS) rose to 506/- from 478/- in the previous year.

As a result, the company increased its dividend payout for the year by 38 per cent 247/- from 179/- per share in 2009.

Twiga Cement on the other hand made a profit of 50.2bn/- in 2010 compared to 47.9bn/- in 2009 despite a price reduction of the commodity mid last year. The company announced a dividend of almost 140/- per share, an increase of 7.0 per cent compared to the previous year.

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