Dar es Salaam Stock Exchange total market capitalisation to Gross Domestic Product (GDP) before October 2014 economic rebase grew by 43 per cent from levels of 30 per cent in January.The Dar es Salaam Stock Exchange (DSE) Chief Executive Officer, Mr Moremi Marwa (pictured), said in an interview with the ‘Daily News’ in Dar es Salaam that, “This means the DSE shareholders new wealth creation grew to 22.7tri/- from 16.5tri/- in January.”
He added, “Our domestic and total market capitalisation, for example, grew by 66 per cent and 40 per cent respectively that some global news media places on the top list on this category.”
He said market capitalisation is one of the indicators that measure how the stock market performs within the economy. It measures how the stock market contributes to the economic growth and in wealth generation to investors in listed companies.
Another key indicator is the measure of market liquidity for which the period under review it increased significantly to 270bn/- from the previous average turnover of 50bn/-.
Relative to the GDP, the domestic liquidity ratio was at 6 per cent compared to the ratio of less than 2 per cent previously.
Also the price to earnings ratio which is another key measure of market performance is currently 17 times and in some counters it is more than 20 times relatively attractive valuations for listed firms and potential issuers.
Historically, the average price to earnings ratio at the DSE listed companies has been less than 10 times, substantially in the lower side compared to global markets average range of 15-25 times.
“These prices to earnings ratios are similar to other listed companies in the region’s vibrant stock markets.
Historically, the average price to earnings ratio at the DSE listed companies has been less than 10 times, substantially in the lower side compared to global markets average range of 15-25 times.
“These prices to earnings ratios are similar to other listed companies in the region’s vibrant stock markets.
This is to say, there is now a positive argument for savvy and sophisticated entrepreneurs to consider DSE as both an exit mechanism and a capital raising platform,” he said.
Source: Daily News, reported by Sebastian Mrindoko, from Dar es Salaam, Tanzania
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