Tanzania: dollar strength eats DSE investor’s return

The continued strengthening of the US dollar relatively to local currencies made the regional equity markets including the Dar es Salaam Stock Exchange (DSE) to plunge down resulting into loss of returns on investment in dollar terms.

According to the DSE Chief Executive Officer, Moremi Marwa (pictured) quarterly note (Q4, 2015) the regional bourses that were affected heavily are namely Rwanda Stock Exchange 43 per cent, the DSE by 25 per cent, Ghana Stock Exchange 27 per cent, Johannesburg Stock Exchange 28 per cent.

Others are the Lusaka Stock Exchange and Malawi Stock Exchange 25 per cent, Nairobi Securities Exchange 22 per cent, Nigerian Stock Exchange 24 per cent, Stock Exchange of Mauritius 22 per cent, Uganda Securities Exchange 22 per cent, Zimbabwe Stock Exchange 29 per cent. 

Botswana Stock Exchange by 6 per cent, Bourse Régionale des Valeurs Mobilières SA (BVRM) by 6 per cent, Namibian Stock Exchange 4 per cent.

The DSE CEO quarterly report shows further that the market capitalisation and indices performance recorded slight decline of 8 per cent for the total market capitalisation and three percent decline for the domestic market capitalisation and index.

As of December 31st, the total turnover stood at 20.5tri/- compared to 22.2tri/-in the quarter ended September last year. Similarly, domestic market capitalisation declined to 9.5tri/- compared to 9.8tri/- as of September.

On annual basis, the total market capitalisation and domestic market capitalisation lost by 7 per cent and 4 per cent respectively. The turnover for the year was 1.07tri/- from the earlier estimate of 785bn/-.

In 2014 the trading turnover was 383bn/-. With this record of market trading activities, the liquidity ratio during the year was 11.3 per cent which is almost 10 times compared with our previous history, relative to domestic market capitalisation.

The fourth quarter witnessed market liquidity recorded an increase of 29 precent to 287bn/- compared to 222bn/-of the third quarter last year.

Also, the market was down by 5 percent on the domestic counters valuations. The Weighted Average market Price Earnings (PE) Ratio for domestic listed companies was trailing at 16.11 times at the end of December compared to the trailing PE ratio of 16.93 times during the end of the previous quarter.

The Weighted average Price or book value remained the same at 4.4 times. Similarly, the trailing weighted average dividend yield was 3.0 percent.

On the other hand, there was a continued use of mobile trading platform in our Automated Trading and Central Securities Depository infrastructure.

There are currently over 1,000 investors accessing our infrastructure using their mobile phones. We envisage the increase in number of mobile trading platform as more and more people gets to know the existence and operability of this technology
Source: Daily News, reported from Dar es Salaam, Tanzania
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