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Market activities up on prearranged TBL deal

Market activities up on prearranged TBL deal

Stock Market

The resurgence of prearranged activities on the TBL counter during the week shot up market activities and the equity turnover by almost 25 times every week.

TBL saw four prearranged block transactions on Wednesday that moved 1.2mln shares for 4,150 /- to realize a turnover of TZS 4.99bln ($2.16mln). The prearranged price is discounted by 61.9% from the official closing market price of 10,900/- for TBL.

As a result of the transactions on the TBL counter, the total equity turnover on the equities market during the week that ended on the 16th of July 2021 amounted to TZS 5.64bln ($2.44mln) while the volume of shares traded went up 433% to a total of 3.49mln, traded in 171 deals. The number of deals is 79 deals higher than the previous week.

Expectedly, TBL was the top mover for the week, accounting for 88.7% of the total equity turnover during the week.

TBL was followed by CRDB from afar, which was also followed by NICOL. CRDB and NICOL accounted for 5.9% and 3.2% respectively. Collectively, the three counters accounted for 97.8% of the total equity turnover during the week.

The transactions on the TBL counter were between foreign investors on both sides, combining that with foreign interest in CRDB and NICOL led to a foreign-dominated week for the market.

Foreign investors accounted for 96.88% and 92.77% of the total investments and divestments for the week.

Local investors accounted for the balance on both sides. Foreign participation has been seen to rise in the recent few months after lowering during the last year due to the pandemic.

Increased market activities sent a positive wave to the domestic market capitalization which rose by 0.17% and as a result, the Tanzania Share Index (TSI) gained 6 points. Three domestic counters were culprits in the rising of the TSI.

CRDB, DSE and NICOL all rose by 2.04%, 8.33% and 2.22% respectively. The TSI closed the week at 3,610.35 points while the domestic market capitalization stood at TZS 9,508.19bln ($4.12bln) at the end of the week.

On the other hand, the All-Share Index (DSEI) lost 2.11 points as a result of two cross-listed counters falling.

The counters that fell were KCB Bank (KCB) and Jubilee Holdings (JHL) which fell by 1.03% and 0.61% respectively.

The counters were enough to offset the risen domestic counters and suppress the total market capitalization by 0.11% to close the week at TZS 16,673.35bln ($7.22bln) while the DSEI closed the week at 2,004.91 points.

Market, Bills and Bond

The interbank rate remained similar to the previous week while the amount traded in the Interbank Cash Market (IBCM) fell significantly during the week.

The week saw only one active trading session on the IBCM. The total amount traded during the session totalled TZS 500mln ($0.22mln) while the interbank rate stood similarly at 4%.

The stagnant interbank rate sends mixed signals regarding the liquidity of the banking sector. With the increased charges on mobile transactions on MNOs, banks are expected to see increased liquidity and transactions.

In the Treasury bills auction held on 14th of July 2021, the Bank of Tanzania raised the offer amount for the 364 days tenor while for the first time in months, the 91 days tenor secured a bid even though undersubscribed, and the 35 days tenor remained without luck.

The total offer size by the central bank amounted to TZS 78.4bln ($33.93mln), a bit higher than the usual TZS 76.7bln ($33.2mln).

The tender size from the public was TZS 131.5bln ($56.92mln) from 49 bids while the 364 days tenor was oversubscribed by 75%.

The Bank accepted only 9 bids worth TZS 76.7bln ($33.2mln), leaving TZS 55.5bln ($24.02mln) on the table. Yields of the 182 days and 364 days tenors both dropped by 8bps and 74bps respectively to stand at 3.5% and 4.07% while the 91 days found an equilibrium at 3%.

Currency Market

The Interbank Foreign Exchange Market (IFEM) saw the total value of transactions fall by 20.2% every week while the shilling maintained the depreciation path.

The total value of transactions amounted to $4.55mln, from four active trading sessions during the week. The weighted average exchange rate stood at TZS 2,310.58/USD being 4 pips lower every week.

orbit@orbit.co.tz; imani@orbit.co.tz

Mwandishi: Weekly Market Synopsis

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