DSE price earning ratio drops slightly

The Dar es Salaam Stock Exchange valuation levels have slightly decreased the trailing market Price Earnings Ratio (PER) for domestic listed companies by 16.5 times as at the end December.

The market re-correction hurt the domestic listed companies which in the third quarter also experienced a PER decrease of 19 times at the end of last September.

The DSE Chief Executive Officer, Mr Moremi Marwa (pictured), said the PER decrease also lowered indices by 10 per cent and 3.0 per cent for domestic listed companies (TSI) and all listed companies (DSEI) respectively in the last quarter of 2014.

“Despite the fact that PERs in most counters are on same levels to others in the region, but it is fair to say the ongoing correction has hurt the total market valuation,” Mr Marwa said.

The CEO said despite market re-correction, the end year festival grip are also to blame for slightly sluggish operation at Dar es Salaam Stock Exchange in the last of 2014.

Fresh data from DSE shows that domestic market capitalisation and indices TSI, that covers the 14 local listed companies, lost by 10 per cent.

The same downfall was experienced for indices and market capitalisation DSEI, covering the total 21 listed companies, after decreased by 3 per cent in the three months to end-December.

DSE Chief Executive Officer Moremi Marwa yesterday attributed the sluggish trend to the ongoing market re-corrections as well as year-end social and economic activities.

“Indices and market turnover during the quarter (October and December 2014) were slightly sluggish compared to the previous quarter (July and September 2014),” Mr Marwa said in CEO note analysing the bourse performing.

Liquidity level, as measured by the market turnover, or volume of transactions, also decreased by 17 per cent to 144bn/- from 175bn/- in the last quarter.

The domestic market capitalisation decreased by 10 per cent during the quarter, from 11tri/- as of end of September 2014 to 9.9tri/- as of end of December same year.

The total market capitalisation also slumped from 22.8tri/- to 22.3tri/- as end of December 2014.

“The relatively better performance of the total market indices and total market capitalisation, compared to domestic listed companies, was a result of the relatively good performance of cross-listed companies in their home markets.

“And also the rights issue for Uchumi Supermarket which increased its market capitalisation,” Mr Marwa said. However, the CEO said, during the quarter the bourse had one IPO for Mkombozi Commercial Bank, which increased the market capitalisation by 20.6bn/-.

In the year-on-year basis, there has been a significant growth in all fronts: indices, market capitalisation and liquidity. Domestic market capitalisation has increased by 66 per cent to 9.9tri/-; total market capitalisation has increased by 34 per cent to 22.3tri/-.

On the liquidity level, market turnover has increased by 52 per cent to 383bn/- compared to 252bn/- in 2013 and an average annual turnover of 50bn/- prior to last year.
Source: Daily News, reported by Abduel Elinaza from Dar es Salaam, Tanzania
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