The Dar es Salaam Stock Exchange (DSE) has experienced a bearish mode in the last six months, thanks to end year holidays and shrinking speculation.The market experienced a bullish run soon after the central bank open up the capital account that allowed foreigner investors to participate on the market in the second half of this year.
The move saw almost all stocks registering historical high prices, which stock brokers explained as a mismatch between companies’ performance and price ratio.
Thus equities bull-run was short lived after four months. The prices started to plummet at the beginning of the last month at the disgrace of speculator investors who reaped considerably.
Orbit Securities General Manager Mr Juventus Simon said the bull-run was not backed up with actual company performance but by a rush to buy stocks before outsides come and vise versa.
“This trend pushes the prices unnecessary high - actual to high more than in our peers bourses (in East Africa),” Mr Simon said. ‘However,’ he added “the prices are now finding their equilibrium point.”
The general manager believes that was the reason behind the price drop in recently days.
He further said: “The outlook for next year is promising for some share price gains when companies release their second half financial performance. “The companies’ financials may decide the bourse performance trend either bullish or bearish.
”Swala Energy stocks that appreciated to over 320 per cent to reach 2,110/- a share two months after listed plummet to 780/- at the closing of business on Wednesday.
TBL and NMB shares also sunk my 24 and 22 per cent to 13,320/- and 3,500/- respectively in the last six weeks.
”Swala Energy stocks that appreciated to over 320 per cent to reach 2,110/- a share two months after listed plummet to 780/- at the closing of business on Wednesday.
TBL and NMB shares also sunk my 24 and 22 per cent to 13,320/- and 3,500/- respectively in the last six weeks.
Zan Securities Chief Executive Officer, Mr Raphael Masumbuko, said the capital account pushed price up as regional investors believes DSE stock prices were low compared to other bourses in the region.
“Investors anticipating a bullish trend thus rush to buy as a result push prices to new levels - prices are now going down to equilibrium level that match companies performance,” Mr Masumbuko said.
The CEO said apart from mismatch, it’s common for all stocks in the world to experience price tumble at the end of the year because institution investors are reposition before making decision next year.
“Retail investors are looking for funds to cushion their end and New Year obligations - even the stocks that are in offer are of small quantity - 10,000, 20,000 shares,” Mr Masumbuko said.
“Investors anticipating a bullish trend thus rush to buy as a result push prices to new levels - prices are now going down to equilibrium level that match companies performance,” Mr Masumbuko said.
The CEO said apart from mismatch, it’s common for all stocks in the world to experience price tumble at the end of the year because institution investors are reposition before making decision next year.
“Retail investors are looking for funds to cushion their end and New Year obligations - even the stocks that are in offer are of small quantity - 10,000, 20,000 shares,” Mr Masumbuko said.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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