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25-year bond auction affects DSE trading

25-year bond auction affects DSE trading

THE Dar es Salaam Stock Exchange (DSE) activities have been affected heavily by the auctioning of the 25 years Treasury bond to drive the market on the bearish mode.

The 25-year bond bids registered a record high after the tender size reached 636.6bn/- which was equivalent to 4.45per cent of the total size of listed Treasury bonds on the DSE.

Thus, the auction of the bond, with longest tenure in the market, plunged the equity market turnover by 82.50 per cent to 239.74m/- last week from 1.369bn/- in previous week. Zan Securities said in its Weekly Market Wrap-ups that due to the 25-year bond the equity market ended on the bearish side to end off last week, despite foreigners dominating the turnover by 60 per cent.

“Most domestic investors shifted their attention to the highly anticipated 25-year Treasury bond auction, and resulted to become the highest oversubscribed Treasury bond auction in [Bank of Tanzania] BoT history,” Zan report said.

At the end of the auction, the central bank accepted only 182.34bn/- equivalent to 28.6per cent and BoT left a significant amount of 454.26bn/- on the table.

Investors, showing a heavy appetite, rose the prices as the lowest successful price rose from 100/1035 to 102/- leading to 35basis points loss from the coupon yield. The weighted average coupon yield at the end of the auction was 15.5122 per cent.

“This displaying the significant liquidity available in the economy despite some inflow being from East African investors seeking high yielded safe Treasuries,” Orbit said in its weekly Market Synopsis.

Vertex International Securities also said in its weekly market report that exchange recorded unsatisfactory performance this week as local investors turned their attention to 25–year Treasury bond.

“However”, Vertex said, “We think liquidity might come back to equities [this] week as bond yields continue to decrease”. On the equity market, the price movement was recorded on six domestic traded equities this week.

Top gainer was CRDB Bank appreciating by 4.17 per cent to end the week at 250/- per share, followed by NICO which went up by 2.04 per cent and closed at 250/- per share.

On other hand, DCB Bank depreciated the most last week after dropping by 9.09 per cent to close at 200/- per share. Also, the self-listed DSE went down by 4.62 per cent to close at 1,240/- per share, NMB Bank value dropped by 4.46 per cent to close at 2,140/- per share and lastly Jatu depreciated by 2.74 per cent to close off the week at 710/- per share.

Total market capitalisation decreased by 0.36 per cent to 16.004tri/- and domestic market capitalization also went down by 0.29 per cent to close at 9.455tri/-.

CRDB was a top market mover, recording 38.87 per cent of total market turnover followed by NMB with 30.11 per cent and Twiga Cement with17.27 per cent.

All Shares Index (DSEI) lost 0.36 per cent to close at 1,920.13 points and Tanzania Shares Index (TSI) declined by 0.29 per cent to close at 3,576.21 points.

Banks, Finance and Investment (BI) closed at 2,378.33, 1.40 per cent down as DSE price decreased. Industrial and Allied (IA) closed at 5,004.28 points, 0.01 per cent down as JATU price declined. Commercial Services (CS) closed at 2,138.49 points same as previous week.


GEITA Gold Mining (GGM) has contributed over ...


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