Tanzania: Total Market Capitalisation Fell Slightly While Market Turnover Escalates to 22.6bn/-

DURING the week that ended 17th January 2020, the bourse recorded a slight decline in total market capitalisation by 0.60% to 17.25trl/- compared to 17.35trl/- recorded in the previous week while, the domestic market capitalization increased by 0.14% to close the week at 9.02trl/-.

Dar es Salaam stock exchange all share index (DSEI) closed the week at 2,077.95 points being a decrease by 0.60% from 2,090.44 points recorded in the last day of the previous week.

Movement of the DSEI was contributed by the movement in the share prices of some Counters as follows; KCB declined by 4.84%, NICOL declined by 2.86%, while CRDB increased by 5.26%, KQ increased by 11.11%, JHL increased by 0.62% and EABL increased by 0.87%.

Tanzania all share index (TSI) and B&F index increased by 0.14% and 0.81% respectively due to the increase in share price of CRDB from 95/- to 100/-. On the contrary, other indices remained flat. Active counters during the week include TBL, CRDB, TPCC, NICOL, NMB and DSE.

Total turnover worth TZS 22.63 billion was recorded from 94 deals compared to 2.04bn/- from 69 deals in the previous week. Volume of shares traded during the week increased to 71,424,888 shares from 571,338 shares traded in the previous week.

During the week TBL traded shares worth 15.99bn/- which is 70.65% of total weekly turnover, followed by CRDB which traded shares worth 6.61bn/- which is 29.18% of the total weekly turnover.

Other active counters transacted during the week include TPCC which traded shares worth 27.97m/-, NICOL traded shares worth 5.35m/-, NMB traded shares worth 4.97m/-, DSE transacted shares worth 0.47m/-, VODA worth 0.23m/- while TCC traded shares worth 0.016m/-.

Interbank market;

During the week the weighted average rate (WAR) for interbank market closed at 4.00% from 4.20% which is 0.002 basis points (bps) less than the last day of the previous week. Total volume traded decreased by 84.68% to 26bn/- compared to 167.70bn/- in previous week.

The highest rate in the interbank market was 5.00% while the lowest was 3.50% compared to the previous' week high and low rate of 5.30% and 3.50% respectively. Analyst Views; From the movement in weighted average rate (WAR) it depicts a decline trend. We expect the rate to range from 4.00% - 4.10% on average basis.

Debt Market

In the bond market, Government bond recorded transaction value of 16bn/- with face value of 16.33bn/- While, in the previous week the Government bond recorded transaction and face value of 0.99bn/- and 1.09bn/- respectively.

The Corporate bonds, the market recorded a transaction worth 64.13m/- compared to previous week's transaction and face value of 4m/-. During the week the Government sought to raise 137bn/- through 2 years- Treasury bond.

The government fetched 167bn/- from 87 successful bids and hence an oversubscription of 21.89%. Number of bids received was 143 with the highest and lowest bid being 97.99/100 and 93.17/100 respectively. Minimum successful price being 95.02/100, weighted average price of successful bids being 95.68/100, weighted average yield to maturity being 10.26%.

Analyst Views; The 365 days yield on treasury bills is around 5.91% (as of 8th January auction) with difference of 4.35% compared to recent 2-years bond yield to maturity (YTM), this indicates that "pure expectation theory of interest rate" doesn't hold as 2-years bond YTM is different from the series of two 365 days treasury bills.

We are on the opinion that Medium term investors could apply active strategy by buying series of treasury bills to replicate the medium-term Bonds.

Interbank Foreign Exchange Market

During the week, total volume traded was 15.50m US dollar at an average rate of TZS/USD 2,299.96 being an increase from 13.20m US dollar at an average rate of TZS/ USD 2,299.97.

Analyst Views; Tanzania shillings remained stronger against US Dollars as the week ended on 17th January the higher and lowest rate was TZS2,301.00/USD and TZS2,298.00/USD respectively. For the coming week, we expect Tanzania shilling to maintain its value at TZS 2,299.90/USD to TZS 2,300.03/USD Weighted average rate (WAR).

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