Market capitalisation at the Dar es
Salaam Stock Exchange (DSE) has significantly dropped following steep
fall of the price of shares of the London listed gold producer African
Barrick Gold (ABG).
Canadian mining major Barrick Gold,
which owns 74 per cent of ABG, said in August it was in early-stage
talks with CNGC about the possible sale of all or part of its stake.
The
stockbrokers in Dar es Salaam told the ‘Daily News’ that the bourse
market capitalisation has gone down by almost 20 per cent reflecting the
same amount the ABG share price tumbling down from 444 pence (11,544/-)
to 356.80 pence (9,277/-) as of Thursday since the buy-off deal
dematerialised.
The ABG market capitalisation sunk to
3.804tr/- yesterday from 4.734tr/- a fortnight ago, plummeting the DSE
market capitalisation by 930bn/- from 13.213tr/-, the miner’s shares
control over a third of total DSE market capitalisation.
The Tanzania Securities CEO, Mr Moremi
Marwa, said yesterday that ABG share price has had a negative impact on
the DSE’s market capitalisation since the deal was put-off.
“ABG has a
bigger volume, thus its fluctuation on (FTSE 250) London affected the
market capitalisation of DSE,” Mr Marwa said “even though little trading
is happening at the country’s bourse.”
ABG shares are not frequently trading on
the DSE, but its prices kept reflecting what is going on in London
(LSE), which is featured on the FTSE 250.
International analysts a
fortnight ago, projected that the deal may reach over 500 pence a share.
But minutes after the market opened in London today, shares dropped
over 21 per cent to as low as 347.80 pence, some 96 pence less than
Thursday’s 444 pence close.
Meanwhile, ABG reported a 16 per cent
drop in gold production for the period January to September 2012 as well
as 17 per cent fall in sales coupled by a 42 per cent increase in cash
cost per ounce compared to the comparable period in 2011.
Profit for the
three quarters of 2012 was down 58 per cent to 94 million US dollars
compared to over 222 million US dollars the year prior.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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