EQUITY turnover on the Dar es Salaam Stock Exchange (DSE) fell by 40.4 per cent during the month of October 2023, following non-existent prearranged block transactions on the TBL counter compared to September 2023.
The total equity turnover for the month amounted to TZS 12.36 billion, down from TZS 20.75 billion realized in September 2023 when TBL accounted for 60 per cent of the turnover.
Despite the substantial fall in the turnover, the volume of traded shares went up 17.7 per cent on a monthly basis, particularly from a 67 per cent volume growth on the CRDB counter. CRDB emerged as the month’s top mover, relieving TBL from the position held in September 2023. CRDB accounted for 52.3 per cent of the total equity turnover for the month of October, while the counter saw a 68 per cent turnover growth on a monthly basis.
NMB closely followed CRDB, after turnover on the second largest and most profitable bank multiplied more than three times in a month time. NMB saw a turnover of TZS 4.45 billion, accounting for 36 per cent of the market’s total equity turnover for the month.
The two banks collectively accounted for 88 per cent of the total equity turnover for the month. Other major movers during the month included Tanzania Cigarette Company Ltd (TCC), Dar es Salaam Stock Exchange (DSE), National Investment Company Ltd (NICOL) and Tanga Cement Plc (TCCL). Collectively, these counters accounted for 10 per cent of the total equity turnover for the month of October 2023.
Similar to the trend since mid-2022, foreign divesture was persistent in October, consistent with emerging and frontier markets worldwide. Foreign divestments accounted for 70 per cent of the total divestments from the DSE in October, while foreign investments accounted for a mere 0.46 per cent of the total investments.
The balance on both sides was attributed to local investors who have demonstrated a remarkable absorption capacity, without affecting market prices as the market maintains a bullish trend for the last three years.
The Tanzania Share Index (TSI) gained 53.72 points during the month, equivalent to a 1.26 per cent gain on the domestic market capitalization.
The TSI was lifted by seven counters during the month, while three counters moved in a counter direction. The top mover for the month was TCCIA Investment Company Ltd (TICL) which recorded an impressive 27.3 per cent gain over the last month, maintaining a rally that originated from the rights issue announcement by the company. The price of TICL moved from TZS 165/- in the end of September to TZS 210/- in the end of October.
Another notable gainer during the month was Tanga Cement (TCCL) which gained 16.3 per cent in October alone, while recording a staggering 81.8 per cent return since the beginning of the year.
The price of TCCL refreshed a rally in October following a press release by Scancem which basically gave a tentative schedule of the expected acquisition, while announcing an offer to purchase 68 per cent of Tanga Cement shares.
The announcement also gave an indicative price of the acquisition, which is subject to debt and working capital adjustments. The rest of the gainers during the month gained less than 5 per cent, led by CRDB which gained 4.55 per cent, closing the month at a price of TZS 460/- per share.
The gain on the CRDB counter comes amid 9 per cent profit growth for the first nine months of 2023 compared to a similar period in 2022. In the quarterly earnings release for the quarter ending September 2023, CRDB reported income growth and contained operational expenses, leading to a relaxed cost to income ratio relative to June 2023.
However, interest expenses growth was almost three times the growth of interest income, while deposits mobilization was still less than the demand for credit from the public, leading to a loan to deposits ratio of 96.8 per cent from 90.6 per cent in June 2023.
The price of NMB gained 2.61 per cent to close the month at TZS 4,720/- as the bank maintained a rally that began in the end of July 2023 following the release of half year results.
Towards the end of October, NMB released quarterly results for the quarter ending September 2023 whereby net profits for the first nine months of 2023 went up 23 per cent compared to the same period in 2022. Twiga Cement Plc (TPCC) gained 2.43 per cent to close the month at a price of TZS 4,220/-, mostly out of the acquisition development.
TPCC is directly associated with the TCCL acquisition because Scancem, the acquirer of TCCL is the majority owner of TPCC. Thus, it is expected that the acquisition shall have some material impact to TPCC operations. Other gainers were DSE and TOL Gases.
DSE gained 2.27 per cent during the month, while the gain was experienced around the same time of Scancem’s press release in regards to the Tanga Cement acquisition tentative schedule which suggests that the transaction may be executed before the end of the year.
Investors may be pricing in DSE fees income from the transaction, which shall raise revenue for the Exchange.
TOL Gases (TOL) was the least gainer, with a price appreciation of 1.54 per cent, to close the month at a price of TZS 660/-.
MCB and MBP fell by 3.13 per cent and 1.75 per cent respectively, out of normal market volatility as investors show more appetite in the banking sector.
The price of NICOL fell by 2 per cent at the end of the month as the counter went into ex-dividend on the 27th October 2023.