Tanzania's cement makers share prices fall

Share prices of cement firms listed on the Dar es Salaam Stock Exchange (DSE) slid during the last five months raising fears of marginal dividends among investors.

The situation was largely due to lowered investors’ appetite and demand for the two stocks at DSE. According to analysts, the whole manufacturing sector was last year marred by increased taxes, particularly, the 25 per cent increase of excise duty on July 2014.

Zan Securities Limited Chief Executive Officer Mr Raphael Masumbuko said in Dar es Salaam in an interview that hiked levies and duties on cement impacted heavily on the profitability of the companies.

“As cement production costs increases, the profitability is directly affected to hit heavily on the shareholders returns or dividends,” he said.

When shareholders returns dwindle, appetite for the current and potential investors to go for the stocks decline as well. For example, the percentage average change of Twiga Cement shares since January is 13.75 per cent down while Simba cement is 10.12 per cent.

Orbit Securities Limited General Manager Mr Juventus Simon shared the concern of the dwindling mood of the two stocks and underscored the need for the government to take swift measures to protect domestic industries.

Apart from increased costs, cement investors decried the importation of cheap cement from some Asian countries, thus creating unnecessary competitions in the market.
Source: Daily News, reported from Dar es Salaam, Tanzania
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