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CRDB dominates trading as equity turnover falls again

THE market is still suffering from the change of trading rules that were meant to improve liquidity on the Exchange but seem to have just the opposite effect.

The week that ended on 09th August 2019 had four trading days leaving out the National Farmer’s Day on the 08th August.

In three out of the four trading days, CRDB was the only counter that saw transactions go through the market while all counters with capitalization above one trillion shillings, including TBL, are still on their knees, recording zero transactions throughout the week.

The Tanzania Share Index (TSI) along with the domestic market capitalization remained at 3,295.90 points and 9.076tri/- ($3.95 billion) respectively similar to the previous week.

The All Share Index (DSEI) on the other hand has gained 52.57 points during the week following a 2.7 per cent rally of the total market capitalization.

DSEI closed the week at 1,975.94 points while the total market capitalization closed the week at a total of 19.47tri/- ($8.47 billion).

Total equity turnover shrunk for the second week in a row, diving by 34 per cent during the week under review to record a total of 761.7m/- ($0.33 million) compared to 1.15bn/- ($0.5 million) reported during the previous week.

A total of 7.5 million shares moved during the week compared to 11.1 million shares traded during the previous week. CRDB Bank (DSE: CRDB) remained the top mover similar to previous week accounting for 98 per cent of the total equity turnover realized during the week under review.

From the looks, CRDB will be dominant for a while until TBL and other large counters become liquid again. This was at least expected as one of the short term effects of the implementation of the new trading rules.

Local investors were dominant during the week while remaining net investors accounting for 78 per cent of total investments made into the market while accounting for 41 per cent of total divestments from the market.

On the 09th August 2019 an all-or-none (AON) offer of 588,000,070 Vodacom shares at a price of 850/- was made by Mirambo Ltd, the offer will last for 21 days and close on the 02nd September 2019.

The only expected subscription fitting the offered requirements is from Vodacom Group SA which is looking up to its stake in Vodacom Tanzania to 75 per cent by buying out Mirambo Ltd’s stake.

The transaction when complete will be worth TZS 499.8 billion ($217.26 million) which is more than twice the total equity turnover for the year 2018.

Money Market, Bills and Bonds The Interbank Money Market (IMM) was busier during the week trading a total of TZS 113.7 billion ($49.42 million), 4.5 per cent higher than previous week’s TZS 108.8 billion ($47.3 million).

The interbank rates remained below five per cent while the weighted average interbank rate jumped 11bps to close the week at 4.61 per cent.

The market has maintained an appetite for the 364days tenor Treasury bill as the tenor was oversubscribed by 188 per cent during the Treasury bills auction held on the 07th August 2019.

The Bank of Tanzania offered TZS 107.2 billion ($46.6 million) and received a total tender size of TZS 294.36 billion ($128 million).

The tender size fetching the 364days tenor amounted to TZS 292.16 billion ($127 million) against an offer size of TZS 101.5 billion ($44.12 million) while all other tenors were undersubscribed.

The Bank accepted a total of TZS 103.7 billion ($45.08 million) while the total weighted average yield to maturity went down by 21bps due to an increased appetite on the 364days tenor which pulled down the yield for the tenor from 8.16 per cent to 7.91 per cent.

The total yield to maturity was 7.85 per cent compared to 8.06 per cent recorded during the previous auction on 24th July 2019. Currency Market The shilling gained strength on the Interbank Foreign Exchange Market (IFEM) during the week appreciating by 8 pips to close the week at a weighted average exchange rate of 2,300.48/USD.

The volume traded on the IFEM during the week was lower by 27 per cent compared to the previous week. Volume traded totalled at $23.35 million compared to $31.9 million traded during the previous week.

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Mwandishi: Weekly Markets Synopsis

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