Christmas fever pulls down DSE stock indices

Investors’ end of year festival obligations have been listed among factors behind fluctuation of prices at the Dar es Salaam stock Exchange (DSE) and other financial markets.

Stockbrokers have it that since the beginning of this month, the year-end festivals are believed to have sent indices at the bourse to descend as investors sell to meet obligations relating to the holidays.

DSE indices went down by 104.31 point and 42.94 points for DSE all share Index and Tanzania Share Index respectively in the last three weeks.

The exchange data shows that DSEI opened the month at 1940.37 points but fluctuated downwardly to close yesterday at 1836.06 points, while the TSI opens at 2890.16 points to close the market at 2847.22 points. 

Zan Securities Chief Executive Officer, Raphael Masumbuko said apart from Christmas other factors like dividends, earning per share also fuelled the downwards trend.

“There are mixed feelings among investors that pushes for demand and supply fluctuations, among them are Christmas obligations,” Mr Masumbuko said.

He added: Holiday makers, I think, are selling the stocks to raise money for Christmas - some want to travel and meet their friends and relatives at their ancestors’ place.” 

For example, Tanga (Simba) Cement share price on Tuesday sunk by 15 per cent to 2000/- before climbing back by 13 per cent to 2,300/- on Wednesday, to send mixed feeling of investors’ appetites.

A stockbroker said some investors have the feeling that the cement firm may have offered the same dividend of 50/- as it did mid this year, thus cutting down returns on investments to glut supply window.

However, others have it that the company’s performance was good so there was need for buying more shares to maximise returns. Simba Cement net profit slowed down to 10.89bn/- this June from 15.49bn/- of last June, while earnings per share was down to 171/- from 243/-.

Simba Cement was not the only affected equity on the bourse but CRDB Bank also saw its stock price drop from 295/- to 280/- and almost all cross listed stocks went down this month. “All these factors plus endyear festivals grip react negatively to the performance of shares in this month,” Mr Masumbuko said.
Source: Daily News reported by Abduel Elinaza from Dar es Salaam, Tanzania
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