CRDB shares bearish to six-week low

CRDB bank share price has dropped to six weeks low of 285/- following a glut pushed by investors’ rush to make a quick-gain fearing further fall.

The shares of the bank appreciated to almost 130 per cent since the beginning of the year to reach 320/- to attract a quick sale from speculative investors to make a quick-return.

Orbit Securities Head of Dealings and Operations Juventus Simon said the depreciation of CRDB shares could be linked to the bank’s second quarter which was not as impressive as the previous thus pushing speculators to sell their shares fearing a further fall in price.

“They (CRDB) make a good profit, but the NPLs (non performance loans) raise slightly by one per cent, earning per share went up by 1/- to 9/-....this discourage further demands from speculators,” Mr Simon said.

The market, he said, was glutted by the bank shares an experience that was not there some weeks ago to fuel price climbing especially for short term investors who are banking on appreciation and dividends.

“Long term investors who look for bank’s expansionary trend are comfortable with the CRDB performance, these would not rush to sale,” Mr Simon said.

At the yesterday market the CRDB share opened the market at 300/- before settled briefly at 290/- and plunged to close the session at 285/- which is the lowest compared to the previous day figure of 290/-.

Earlier, Dhow Financial Managing Director Prof Mohamed Warsame described stocks as strange animals by looking at the price share trend as it could fluctuate to either direction by a fraction of a minute despite good financial results. “Pointing the price direction is too speculative.

The prices can climb to entice others to sale, in return glutting the market to crash the same stock price tomorrow,” he said. 

Stockbrokers opinioned that share prices of listed banks could rally further if posted a good performance in this year’s first half to map out new market equilibrium.

This was due to the fact that a recent share-buying trend shows most investors were return and not dividend focused a situation that has pushed up demand amid limited supply.

“The era of investors buying to cash on dividends is slowly disappearing and earning per shares focus is emerging,” Zan Securities CEO Mr Raphael Masumbuko said. 

CRDB has generated a net profit of 20.09bn/- from 16.51bn/-in three months ending June. Total assets growth slowed down slightly to 3.128tri/- in June from 3.175tri/-.

Deposits also shrunk faintly to 2.629tri/- from 2.636tri/-. On expansion drive the number of branches increased to 93 in June from 82 in March this year, so was the number of employees that went up to 2,012 from 1,817 staff - minus a branch opened in Burundi.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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