Second quarter CRDB results to decide share price

The CRDB bank second quarter financial results are poised to point to the directions of the share price movement on the Dar es Salaam Stock Exchange (DSE).

Stockbrokers strongly believe that the share price movement remains subject to the bank’s financial performance in the second quarter of the year after the bank share rallied to historic high since listing on the bourse five years ago.

CRDB share hit back to 290/- on Tuesday, an appreciation of 107.14 per cent since January, after it had dropped to 270/- last week, the movement brokers see as a new stabilizing level. During initial public offer, the stock sold at 150/-.

Zan Securities Chief Executive Officer Raphael Masumbuko told the ‘Daily News’ over the phone that depending on the financial results, the share price may appreciate, depreciate or stagnate.

“But, I predict the price might appreciate to between 320/- and 330/- in this (second) quarter,” Mr Masumbuko said, adding that results were important on the stock’s price movement. Between 2011 and 2012 the CRDB share fluctuated, at times plummeting to 110/-, below public offer period price of 150/-.

The bank’s share price however made a dramatic twist in the turn of this year. The bank share slumped by over 36 per cent in 2012 to lead in share-lost-price index, despite being the leading bank in terms of assets and deposits, the position it still maintains to date.

A study by Dhow Financial last year shows that the bank shares were trading below its book value that stands at 260/-. In March this year, Tanzania Securities recommended a medium term “buy” for CRDB at a price of 150/- a share with the upside of 15 per cent for the rest of the year.

“Our optimistic viewpoint is based on our positive outlook on CRDB key growth drivers,” the research showed then. 

The stockbrokers hailed the bank initiative to launch awareness campaign last year to give investors and broker first-hand information of their activities and performance that helped the share to appreciate.

Mid last week, CRDB share was the most appreciated in the last six months after it had gone up by 107.14 per cent to dock at 290/-.

Orbit Securities Head of Dealings and Operations Juventus Simon predicted that the rally might come to an end and either slightly going down or stagnate at 270/-. The share opened the year at 140/-.

“I think the 270/- might be a new CRDB’s share benchmark,” Mr Simon said, “NPLs (non performing loans) have descended well since last year’s fourth quarter (hence) encouraging investors to increase demand figuring the trend will continue”. 

The head of operations and dealings said that CRDB’s share demand are pushed up by first quarter good results while speculation of the same in the second half is envisaged.
Source: The Daily News, reported from Dar es Salaam, Tanzania
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