The National Microfinance Bank (NMB) shares has rallied to all time high this week to 2,400/-, breaking record since the listing on bourse five years ago.The largest bank share appreciated by 114 per cent mid this week to become the most appreciated stocks in the last ten months.
However, at the close of the yesterday session, the share closed by losing 1.6 per cent to settle at 2,360/- on Dar es Salaam Stock Exchange (DSE).
Orbit Securities Head of Operations and Dealings Juventus Simon said the share gain is driven by the solid performance and management of the bank since its listing.
"The bank maintains a solid balance sheet and kept its NPLs (non performing loans) at reasonable low ratio," Mr Simon said.
Orbit Securities Head of Operations and Dealings Juventus Simon said the share gain is driven by the solid performance and management of the bank since its listing.
"The bank maintains a solid balance sheet and kept its NPLs (non performing loans) at reasonable low ratio," Mr Simon said.
The solid performance, according to Mr Simon, pushes the demand for the most profitable bank stocks: "With limited supply, naturally, the prices skyrocket."
"This (share appreciation) is a barometer that the bank is doing very well to increase demand on the bank's shares," the Head of Operations said.
He said share price under normal circumstances follows the financial progress of the institution -- the higher the share appreciation the better the firm perform financially.
Analysts have it that NMB was poised to continue to perform well in the next few years to dominate the banking sector, especially after embarking on the long term lending.
"But there is a risk attached to exposure on long term loans," analysts said adding "although the higher the risk the higher the returns."
For investors who purchased the share at the initial public offer at 600/-, their wealth has quadrupled to 2,400/- as of Tuesday.
This means if one bought 1000 share at IPO value of 600,000/-, today the same share is worth 2,400,000/- as of Tuesday 29, October 2013.
"This (share appreciation) is a barometer that the bank is doing very well to increase demand on the bank's shares," the Head of Operations said.
He said share price under normal circumstances follows the financial progress of the institution -- the higher the share appreciation the better the firm perform financially.
Analysts have it that NMB was poised to continue to perform well in the next few years to dominate the banking sector, especially after embarking on the long term lending.
"But there is a risk attached to exposure on long term loans," analysts said adding "although the higher the risk the higher the returns."
For investors who purchased the share at the initial public offer at 600/-, their wealth has quadrupled to 2,400/- as of Tuesday.
This means if one bought 1000 share at IPO value of 600,000/-, today the same share is worth 2,400,000/- as of Tuesday 29, October 2013.
NMB posted a net profit of 33.14bn/- in three months ending June 2013, while CRDB Bank, the nearest contender, coming second with a net profit of 20.09bn/-.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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