Dar es Salaam - The Dar es Salaam Stock Exchange (DSE) witnessed a boost in activities for the second consecutive week. The total turnover for the week reached 3.9 billion Tanzanian shillings, marking a 48.20 percent increase compared to the previous week. The general market showed a bullish trend, resulting in a rise in both total and domestic market capitalization.
During the week, the top three trading counters were TBL, CRDB, and NMB, accounting for 57.44 percent, 27.42 percent, and 10.41 percent of the overall market turnover, respectively.
Among the trading counters, four registered price gains. Simba Cement (TCCL) experienced the highest gain, with a 28.38 percent increase, closing at 1,900 Tanzanian shillings per share. SWISS gained 6.49 percent, closing at 1,640 shillings per share, while NICO registered a 2.5 percent gain, closing at 410 shillings per share. CRDB also saw a 2.04 percent increase, closing at 500 shillings per share.
On the other hand, DCB Bank recorded a decline of 2.63 percent, closing the week at 185 shillings per share.
The total market capitalization increased by 2.12 percent, reaching 15.151 trillion Tanzanian shillings, while the domestic market capitalization rose by 0.52 percent, closing at 10.934 trillion shillings.
Key benchmark indices included the All Share Index (DSEI), which closed at 1,816.97 points, indicating a 2.12 percent increase, and the Tanzania Share Index (TSI), which closed at 4,133.050 points, reflecting a 0.52 percent rise.
In terms of sector indices, the Industrial and Allied Index (IA) closed at 5,128.51 points, up by 0.46 percent, while the Bank, Finance, and Investment Index closed at 4,029.69 points, up by 0.82 percent. The Commercial Services Index, however, experienced a slight decline of 0.20 percent, closing at 2,161.21 points.
Debt Market Highlights
In the primary market, the central bank offered a new 5-year Treasury bond with a coupon rate of 8.6 percent annually. The auction, catering to investors with a preference for medium-term papers, received a subscription rate of 46.17 percent, with bids totaling 47.55 billion Tanzanian shillings and accepted bids worth 44.15 billion shillings.
The weighted average yield to maturity increased by 17.87 basis points compared to the previous auction held on January 4th, 2023, reaching 9.8457 percent.
The secondary market witnessed heightened activities during the week. The overall turnover for the trading week ending May 19 increased by 114 percent from the previous week, reaching 132.34 billion Tanzanian shillings. The number of trades also increased from 45 to 58.
Trading mostly occurred on the long end of the yield curve, with the on-the-run 20-year T-bond accounting for 45.33 percent of the traded volume. Additionally, a fixed income trade involving an NMB corporate bond with a notional value of 6.0 million shillings and an average price of 85/94 took place. Continued elevated secondary trading activities are expected in the coming weeks.
Inflation Rate and Outlook
The inflation rate dropped to 4.3 percent, decreasing by 0.4 percentage points in April due to slight declines in the prices of some food and non-food items, according to the National Bureau of Statistics (NBS).
The decline in the inflation rate is seen as a positive sign, indicating the effectiveness of the government's efforts to contain and maintain inflation. This creates favorable conditions for investment from both international and domestic investors.
Looking ahead, the focus for equities strategies in 2023 is expected to be on companies with solid fundamentals that demonstrate growth potential. Low inflation and resilient cost pressures will be key drivers in supporting the quality of Tanzanian equities. With a favorable growth environment, companies are anticipated to achieve increased top-line and bottom-line growth compared to 2022.
In the short term, slight volatility may be observed in the coming weeks as companies initiate corporate actions.