Investors’ appetite for CRDB, NMB shares boosts DSE turnover to 2.64bn

18Nov 2021
Geoffrey Nangai
The Guardian
Investors’ appetite for CRDB, NMB shares boosts DSE turnover to 2.64bn

IMPRESSIVE third quarter results posted by CRDB Bank Plc and NMB Bank Plc last month have boosted their share prices at Dar es Salaam Stock Exchange last week with a combined turnover of 2.64bn/- compared to 953m/- that was made the previous week.

DSE’s weekly report said, in all 9.1 million shares were transacted during the five days of trading last week with local investors choosing shares of the two rival banks in the market.  The report said more than 95 percent of the turnover generated was in respect of CRDB and NMB shares. “We anticipate that this week’s market activity will still be dominated by companies that have released their third quarter earnings, with majority recording profits as the country continues to bounce back from the perils of the Covid-19 pandemic suffered last year,” the report said.

CRDB was the week’s top mover after trading a pre-arranged block of 7.6 million shares which accounted for 84.2 percent followed by NMB with 11.7 percent while Twiga came third with 1.28 percent.  Similarly, NMB was the top gainer with its share price appreciating by 805 percent to close at 1,880/- per share, followed by CRDB whose share price appreciated by 4.1 percent to close at 250/- each.

Meanwhile according to Zan Securities’ weekly market report, share price for Jatu Plc depreciated by 11.48 percent to 540/- each, falling from an all time high of 1,200/- at the end of September this year.

“Local investors accounted for 91.9 percent of all purchases in the market and 24.7 percent of selling while foreign investors accounted for only 8.0 percent of the buying activities and 75.2 percent selling activities,” the report said.

Total market capitalization however increased by 0.2 percent to 15.6bn/- while domestic market capitalization also grew by 1.06 percent to close at 9.2bn/-. Net foreign outflow for the week was 1.7bn/-, compared to 174.5m/- the week before.

In another development, the two year Treasury bond issue with 7.82 percent per annum interest rate issued by Bank of Tanzania last week was oversubscribed by 90 percent supported by higher market liquidity. The oversubscription was due to investors’ liquidity preference towards the short end of the curve with the 2-year Treasury bond providing higher yields than money market instruments.

The investors tendered 217bn/- significantly above the targeted 114bn/- with BoT taking up 164bn/-“ In regard to the oversubscription, investors are attracted to short-term bonds, which typically yield higher interest rates than money market funds such as the 364 day T-bill offering a weighted average yield of 4.10 percent,” the report by Orbit Securities said.

In the secondary market however, the value of bonds traded decreased by 71.7 percent to 32.48bn/- from 55.8bn/- made last week. On a year-on year basis, the yield curve dropped due to falling yields.