The TFSF six months report said the two companies’ shares pushed the bourse turnover by 14.3 percent from 250bn/- to 281.1bn/- during the period.
TFSF explained that the increase was driven by TBL’s dominance at 85.3 percent of the total trading while CRDB trailed although the number of shares that exchanged hands fell from 199.9 million to 89.5 million.
“The decline in the number of shares with increased turnover reflects participation of high priced shares in comparison with small priced shares exchanged in the previous six months,” noted the report.
According to the report, CRDB continued to be the most active counter, accounting for 63.7 percent of total shares traded while TBL had 19.5 percent which was followed by Vodacom Tanzania Plc at 7.2 percent. TBL shares are high priced.
“High demand for CRDB shares was due to low price, making it affordable to small investors who mainly hold shares for precautionary purpose as well as dividend payouts,” the TFSF report pointed out.
For TBL, trading was driven by improved performance, active participation of foreign investors coupled with dividend payouts, noted the report.
The forum’s report however observed that concentration of few active counters exposes the bourse to liquidity risk in the event of shocks to the dominant companies.
In terms of market concentration risk trend, cross-listed companies’ market shares increased to 53.8 percent from 52.1 percent, during the same period which was due to an increase in share prices of Kenya Airways Limited and other cross-listed companies except for Acacia Mining Plc.
KAshare price increased by 130 percent to 230/- per share following capital and debt restructuring which boosted investors’ confidence.
Overall, market concentration risk eased with slight balance in holding among cross-listed and domestic listed companies, attributed to entry of Vodacom’s initial public offer and Acacia’s share price depreciation in 2017.
TFSF underlines that participation of foreign investors continued to dominate on the buying side noting that their participation in stock trading accounted for 97.5 percent and 57.1 percent of the total turnover on the buying and selling side, respectively.
“This is partly contributed by investors’ positive perception on the performance of listed companies and country macroeconomic environment,” the report stressed.
“Non-resident investors also dominated in the equity holdings, constituting 60.9 percent of the total. Other categories of investors were on the selling side to address liquidity demand and meeting other obligations,” the report revealed.
TFSF is a vehicle whose members include: Bank of Tanzania, Ministry of Finance and Planning (Mainland and Zanzibar), Capital Markets and Securities Authority and Social Security Regulatory Authority.