Tanzania: DSE trade up despite high TBs yields

Despite sharp rise of Treasury Bill yields, the trend has not affected share trading at the Dar es Salaam Stock Exchange (DSE), where most counters experienced price appreciation last week.

Yield rates, according to the last week’s Treasury Bills auction increased to 18.87 per cent from 17.70 per cent for the 364 days offer, 16.92 per cent from 16.09 per cent for the 182 days while the 91 days declined slightly to 10.06 per cent from 10.02 per cent.

DSE experienced 57 per cent increase in turnover last week to 4.29bn/- compared to 2.74bn/- of the preceding period with the Tanzania Breweries Ltd (TBL) and CRDB Bank emerging to be the top traded equities.

CRDB led by 89.12 per cent followed TBL by 7.26 per cent and DCB 1.18 per cent. The volume of shares traded during the week dropped by 50 per cent to 2.5 million from 5.1 per cent of the previous session.

The DSE Manager-Projects and Business Development, Mr Patrick Mususa said in Dar es Salaam yesterday that the rising yield rates have no impact on share trading because Treasury Bills are not listed at the equity market.

He said most players in the Treasury Bills trading are commercial banks that do not take part in share trading, thus any increase in yield rates does not affect trade at the bourse.

The high-yield risk-free treasuries push up lending rates as commercial banks prefer them to lending customers. The overall lending rate for August this year edged up to 16.11 percent from 16.08 percent recorded in July 2015.

High interest rates in the country were necessary to curb the depreciation of the exchange rate, since it would have translated into inflationary pressure. The BoT hiked yield rates as way to mop up excess liquidity in circulation.

Source: Daily News, reported from Dar es Salaam, Tanzania
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