DURING the trading week ending on May 31st, the Dar es Salaam Stock Exchange (DSE) saw a decrease in turnover compared to the prior week.
The total market turnover decreased to 1.15bn/-, reflecting an 82.9 per cent downtick from the previous week's 6.723bn/-. The pre-arranged board registered some activities as NMB recorded a block trade.
Throughout the week, NMB dominated trading activities, representing 53.79 per cent of the total market turnover, followed by CRDB at 26.55 per cent and TOL at 6.33 per cent. DSE was the top gainer for the week, registering a 9.68 per cent increase in its share price to close at 2,040/- per share, TICL gained 2.7 per cent in its price closing the week at 190/- per share. CRDB gained by 2.0 per cent closing the week at 510/- per share.
TOL appreciated by 1.45 per cent to close the week at 700/- per share while NMB's price increased by 0.95 per cent concluding the week at 5,300/- per share. However, DCB lost 15.38 per cent to close the week at 110/- per share.
TPCC also depreciated by 4.65 per cent reaching 4,100/- per share while NICO lost 1.25 per cent to close off the week at 790/- per share. In terms of market capitalisation, there was a general increase in the size of the markets, with total market capitalisation increasing by 0.74 per cent to 17,246.17bn/- by the week's end.
Similarly, domestic market capitalisation increased by 0.15 per cent, reaching 11,883.50bn/-. Key benchmark indices · All Share Index (DSEI) closed at 2,066.32 points increasing by 0.74 per cent. · Tanzania Share Index (TSI) closed at 4,486.39 points increasing by 0.15 per cent. Sector Indices · Industrial & Allied Index (IA) closed at 5,131.06 points, down by 0.6 per cent · Bank, Finance & Investment Index closed at 5,227.06 points, up by 1.298 per cent · Commercial Services Index closed at 2,134.27 points, unchanged from the previous week Highlights: Debt Market Primary market On May 29, 2024, the central bank was in the market to offer treasury bills to investors.
The offerings included 900m/- for the 35-day maturity Treasury bill, 1.9bn/- for the 91-day T-bill, 2.9bn/- for the 182day T-bill, and 79.12bn/- for the 364-day T-bill.
In this auction, demand was weak for the 35 as it did not receive any subscription the 91-day bill received a subscription rate of 1.1 per cent, while the 182 and the 364-day bills were oversubscribed the 182- day bill received subscription of 365.93 per cent and the 364day bill received a 321.93 per cent subscription from investors.
The 35- day bill has seen zero subscription for the fourth consecutive time, the 91-day bill has seen a very low demand receiving only 1.1 per cent subscription rate in this auction, this further shows investors' appetite for longer term maturities.
The 182-day bill weighted average yield has decreased by 45.82 basis points from 8.4501 per cent in the previous auction in April to 7.9919 per cent, the 364day bill also saw a decrease of 157.13 basis points in the weighted average yield, resulting in a weighted average yield of 7.0424 per cent compared to 8.6137 per cent in the previous auction held in May 8th.
The price floor increased from 91.97 to 93.17 as the central bank allotted more than what was offered in this auction.
The inflation rate was recorded at 3.1 per cent in April. Secondary market During the week ending on May 31st, market activities saw a decrease compared to the previous week.
Overall turnover decreased by 69.27 per cent, from 49.74bn/- to 15.28bn/-. Similarly, there was a notable decrease in the number of trades, falling from 70 to 46.
Trading activities primarily focused on the long end of the yield curve, with the 20-year and 25-year bonds traded contributing to 53.8 per cent of the total turnover.
In the corporate bond segment, there was a decrease in activity compared to the previous week.
NMB corporate bond NMB-2023/26.T1 recorded four trades totalling 19m/- at an average price of 93.01, CRDB corporate bond CRDB-2023/28.T1 recorded three trades totalling 40m/- at an average price of 96.66.
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Outlook: The first quarter concluded with vibrant market activity, resulting in a total turnover of 77bn/-. CRDB emerged as the turnover leader, commanding 54.77 per cent of the total turnover, followed by TBL with 16.77 per cent and NMB with 10.30 per cent.
Looking ahead to the second quarter, we hold optimistic expectations, especially with the upcoming earning season from May to June poised to bolster market activities, especially with ongoing growth across various counters.
In the fixed income space, the reopening of treasury bonds sparked heightened interest in both secondary and primary market activities.
This surge can be attributed to investors seizing the opportunity to acquire higher-yielding bonds compared to new issuances.
As we move towards the final quarter of the government fiscal year, we anticipate a slight drop in yields and an increase in bond prices in the secondary market, driven by the limited number of auctions remaining, which is likely to increase demand.
