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Tanzania: Dar Exchange Market Maintains Strong Weekly Performance

THE domestic market sustained the bullish rally that began a few weeks ago as the domestic market capitalization slightly rose by 0.28 per cent during the week that ended on the 04th of June 2021.

The Tanzania Share Index (TSI) went up 10.19 points to close the week at 3,625.41 points following the rally on the domestic market cap which closed the week at TZS 9,545.57bln ($4.13bln). The rally of the domestic cap was influenced by three counters which were the only ones that recorded price movements during the week.

CRDB went up by 3.51 per cent as the counter came to the end of its dividend run, with the ex-dividend period beginning on Monday, 07th of June 2021. CRDB closed the week at 295/-. Other gainers were JATU which gained 3.45 per cent and Tanga Cement (TCCL) which rose by 2.53 per cent.

JATU was only active on Monday, before getting suspended from trading on Tuesday, 01st of June, 2021, to give space to the ongoing Initial Public Offering (IPO) of the company. JATU is looking to raise TZS 7.5bln ($3.25mln) by offloading 15mln shares to the public at the price of TZS 500/- per share.

JATU also split its existing shares on a ratio of 2:1, that is, every shareholder that had JATU shares now has twice the initial amount. If the counter was still trading, it should have been trading at 600/- following the split, thus effectively the IPO price included a 16.7 per cent discount from the market price.

Upon an expected successful IPO, JATU plans to use the fund to refurbish its Kiteto farming project in Manyara which has 5,000 acres of maize and sunflower. The company plans to purchase about 17 tractors and other farming equipment, put in place an irrigation scheme that shall produce three harvests annually, and construct a flour milling factory that shall process up to 50 tons of flour per day.

The IPO was opened on the 01st of June, 2021, and is expected to close on the 15th of July, 2021 while the allotment to be done on the 19th of July the same year. In case of an oversubscription, the company has a greenshoe option of up to 50 per cent of the offered amount, which gives the company room to raise to TZS 10.5bln ($4.5mln).

The expected listing date is 29th July 2021 and the suspension from trading is to be lifted during the same day. On the other hand, similar to the TSI, the All Share Index (DSEI) gained 6.59 points thanks to rallies in both, domestic and cross-listed boards.

On top of domestic gainers, a staggering 32.9 climb of the National Media Group (NMG) and a slight 0.99 per cent uptick of the East African Breweries (EABL) pushed up the total market capitalization by 0.31 per cent. KCB bank fell by 1.08 per cent but was offset by the gainers as the total market cap closed the week at TZS 16,506.70bln ($7.15bln).

The DSEI closed the week at 1,985.57 points. The total equity turnover fell by 63.2 per cent compared to the previous week, as activities slowed down on the CRDB counter. The total turnover during the week amounted to a total of TZS 180.68mln ($0.078mln).

The total volume traded fell by a similar proportion of 63.9 per cent to a total of 526,055 shares traded in 196 deals. CRDB retained the top mover position after accounting for 79.3 per cent of the total turnover. Activities on the CRDB counter are expected to lower down during the following week as the counter enters the ex-dividend period.

Once again the market was highly dominated by local investors as foreign investors took a back seat at the most part. Local investors accounted for 65.82 per cent of the total investments into the market while foreigners accounted for the balance. The total divestments side was dominated by local investors by 100 per cent.

Market, Bills and Bond

At the beginning of the week under review, the interbank rate traded above 4 per cent for the first time since the end of February while the total value of interbank transactions on the Interbank Cash Market (IBCM) almost doubled. The value of transactions went up 65.7 per cent every week, to sum up at TZS 5.8bln ($2.5mln) as the number of trading sessions increased.

The interbank rate traded at the peak of 4.22 per cent on Monday but later relaxed to close the week at 4 per cent which is 20bps up compared to the previous week.

Currency Market

The shilling has traded only above TZS 2,310/- against the greenback since it crossed the mark during the beginning of the previous week.

The shilling slightly depreciated by a pip every week and closed the first week of June at a weighted average exchange rate of TZS 2,310.04/USD. The value of transactions on the Interbank Foreign Exchange Market (IFEM) went up slowly by 10.7 per cent to a total of $4.6mln.