uarterly Update THE DAR ES SALAAM STOCK EXCHANGE PLC THE DAR ES SALAAM STOCK EXCHANGE PLC - QUARTERLY UPDATE ISSN No. 0856 8448 ISSUE No. 66 SEPTEMBER, 2015 Q CEO’S MESSAGE Greetings! The Dar es Salaam Stock Exchange PLC (DSE) recorded mixed performance during the quarter – total market capitalization and the DSE Index which tracks all listed shares declined by 7 percent, from TZS 23.7 trillion as of 30th June 2015 to TZS 22.2 trillion at the close of the quarter, on 30th September 2015. The domestic market capitalization and indices also recorded a decimal decrease of 1 percent. The domestic market capitalization decreased from TZS 9.8 trillion as of end of Q2, 2015 to TZS 9.7 trillion as of 30th September 2015. DSE listed companies’ valuations and trading activities were partly affected by the depreciation of shilling compared to US dollar – this had a negative impact on investors’ returns (as measured in US$). As a result, foreign investors’ activities on the buy-side remained the same as was in Q2 – at 86 percent of out total trading activities while sale-side activities declined significantly, from 41 percent in Q2, 2015 to a mere 8 percent this quarter. Market liquidity (trading turnover) also recorded a decline from TZS 278 billion Q2, 2015 to TZS 220 billion during this quarter. However, on the annualized basis, our turnover, currently at TZS 785 billion, has the potential to reach 11 percent liquidity ratio – this liquidity level will potentially be almost 10 times compared with our previous history, as compared to our domestic market capitalization We were also down by 2 percent on the domestic counters valuations. Our Weighted Average market Price Earnings Ratio for domestic listed companies was 16.93 times as of end of September 2015 compared to the trailing PE ratio of 17.31 times during last quarter. The Weighted average Price/book value remained the same at 4.6 times. Similarly, the trailing weighted average dividend yield remained at 3.1 percent as was in the previous quarter. As for the bonds market segment – there was a significant decrease in turnover during the quarter: Bonds trading turnover was TZS 30 billion (on cost basis) versus TZS 75 billion in the previous quarter. On the listings side, there were two listings during the quarter: PTA Bank listed a Corporate Bond worth TZS 32.6 billion; CRDB Bank PLC also listed additional 435 million shares worth TZS 152 billion following the bank’s rights shares issuance during the quarter. During Q4, 2015, we expect at least three listings: Mwalimu Commercial Bank, Mufindi Community Bank and YETU Microfinance. During Q3, 2015, as was planned and communicated – we introduced the mobile trading platform in our Automated Trading and Central Securities Depository infrastructure. This initiative enables investors to buy and sale listed shares using their mobile phones. As at the end of quarter (a month following the launch) about 700 investors had already accessed our infrastructure using their mobile phones. We envisage the increase in number of mobile trading platform as more people get to know the existence and operability of this technology. Our top priorities during the coming quarter include: encourage more listings, public education and awareness, integrating and synchronizing our Central Securities Depository (CSD) to that of Bank of Tanzania for government bonds trading. Our demutualization process is now at the advanced stage, we have selected Advisers in the Issue who will start and probably accomplish the assignment before end of Q4, 2015. Thank You. INSIDE CEO’s MESSAGE ECONOMIC REVIEW A) Economic Trend MARKET REPORT A) Equities B) Bonds NEW LISTINGS STRATEGIC DEVELOPMENTAL MATTERS INVESTOR EDUCATION & PUBLIC AWARENESS INITIATIVES CORPORATE ACTIONS STATISTICS & CHARTS 1 2 3 4 5 6 7 8 1
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uarterly Update THE DAR ES SALAAM STOCK EXCHANGE PLC
THE DAR ES SALAAM STOCK EXCHANGE PLC - QUARTERLY UPDATE
ISSN No. 0856 8448 ISSUE No. 66 SEPTEMBER, 2015
Q
CEO’s MEssagE
greetings!The Dar es Salaam Stock Exchange PLC (DSE) recorded mixed performance during the quarter – total market capitalization and the DSE Index which tracks all listed shares declined by 7 percent, from TZS 23.7 trillion as of 30th June 2015 to TZS 22.2 trillion at the close of the quarter, on 30th September 2015. The domestic market capitalization and indices also recorded a decimal decrease of 1 percent. The domestic market capitalization decreased from TZS 9.8 trillion as of end of Q2, 2015 to TZS 9.7 trillion as of 30th September 2015. DSE listed companies’ valuations and trading activities were partly affected by the depreciation of shilling compared to US dollar – this had a negative impact on investors’ returns (as measured in US$). As a result, foreign investors’ activities on the buy-side remained the same as was in Q2 – at 86 percent of out total trading activities while sale-side activities declined significantly, from 41 percent in Q2, 2015 to a mere 8 percent this quarter. Market liquidity (trading turnover) also recorded a decline from TZS 278 billion Q2, 2015 to TZS 220 billion during this quarter. However, on the annualized basis, our turnover, currently at TZS 785 billion, has the potential to reach 11 percent liquidity ratio – this liquidity level will potentially be almost 10 times compared with our previous history, as compared to our domestic market capitalization We were also down by 2 percent on the domestic counters valuations. Our Weighted Average market Price Earnings Ratio for domestic listed companies was 16.93 times as of end of September 2015 compared to the trailing PE ratio of 17.31 times during last quarter. The Weighted average Price/book value remained the same at 4.6 times. Similarly, the trailing weighted average dividend yield remained at 3.1 percent as was in the previous quarter. As for the bonds market segment – there was a significant decrease in turnover during the quarter: Bonds trading turnover was TZS 30 billion (on cost basis) versus TZS 75 billion in the previous quarter. On the listings side, there were two listings during the quarter: PTA Bank listed a Corporate Bond worth TZS 32.6 billion; CRDB Bank PLC also listed additional 435 million shares worth TZS 152 billion following the bank’s rights shares issuance during the quarter. During Q4, 2015, we expect at least three listings: Mwalimu Commercial Bank, Mufindi Community Bank and YETU Microfinance. During Q3, 2015, as was planned and communicated – we introduced the mobile trading platform in our Automated Trading and Central Securities Depository infrastructure. This initiative enables investors to buy and sale listed shares using their mobile phones. As at the end of quarter (a month following the launch) about 700 investors had already accessed our infrastructure using their mobile phones. We envisage the increase in number of mobile trading platform as more people get to know the existence and operability of this technology. Our top priorities during the coming quarter include: encourage more listings, public education and awareness, integrating and synchronizing our Central Securities Depository (CSD) to that of Bank of Tanzania for government bonds trading. Our demutualization process is now at the advanced stage, we have selected Advisers in the Issue who will start and probably accomplish the assignment before end of Q4, 2015.
Thank You.
INSIDECEO’s MEssagE
ECOnOMiC rEviEwa) Economic Trend
MarkET rEpOrTa) EquitiesB) Bonds
nEw LisTings
sTraTEgiC DEvELOpMEnTaLMaTTErs
invEsTOr EDuCaTiOn & puBLiC awarEnEss iniTiaTivEs
COrpOraTE aCTiOns
sTaTisTiCs & CharTs
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6
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2) ECOnOMiC rEviEw
a) interest rates Trend During the quarter the Weighted Average Yields (WAY) on treasury bills increased from 10.04 percent in June 2015 to 13.74 percent in September, 2015. The Chart below shows the T-Bill weighted average yield (WAY) trend.
B) inflation DevelopmentsAnnual headline inflation was 6.1 percent in June 2015, moved up to 6.4 percent in July 2015 and August, and went down to 6.1 percent in September 2015; this is as per the National Bureau of Statistics.
C) Exchange rates TrendsThe shilling depreciated against the USD by 6 percent in the quarter to an average of TZS 2,149.02 per USD on September 2015 from TZS 2,020.35 per USD on June 2015. This is as per the Bank of Tanzania.
3) MarKET rEPOrTa) EQUiTiEsTotal Market Capitalization & indicesThe Market Capitalization depicted a 7 percent drop from TZS 23,721.49 billion as at 30th June 2015 to TZS 22,166.42 billion as at 30th September 2015.
DSE All Share Index1 Lost 196.69 points to settle at 2,531.08 points at the end of the quarter (30th Sept 2015) from 2,726.77 points in the previous quarter (30th June, 2015).
Domestic Market Capitalization & indicesThere was a slight drop in the Domestic Market Capitalization by 1.1 percent from TZS 9,843.52 billion at the end of Q2, 2015 to TZS 9,733.88 billion at the end of Q3. Equally, Tanzania Share Index lost by 1.1 percent from 4,684.09 points as at the end of June 2015 to 4,631.91 points as at the end of September 2015. The loss was mainly attributed to the depreciation of share prices on NMB, DCB, SWALA, MKCB, CRDB, and TPCC counters by 18.44%, 13.97%, 9.91%, 9.09%, 8.75% and 3.14% respectively.
Banking & Investment Index lost 313.39 points, moving from 3,409.78 points as at the end June 2015 to 3096.39 points at the end of September, 2015. The loss emanated from NMB (18.44%), DCB (13.97%), MKCB and CRDB at 9.09% and 8.75% each. MPB share price did not change.
1 Base year/Value for All Share Index :15 Dec 2006 =1,000
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Industrial & Allied Index experienced a 122.13 gain, moving from 6,072.36 points as of 30th June, 2015 to 6,194.49 points as of 30th September, 2015. The gain was attributed mainly by the increase in share prices of TOL (21.26%) and TBL (4.14%).
Commercial Services Index lost by 42 points to settle at 3,974.18 points as of 30th Sept 2015 from 4,016.07 points as of 30th June 2015. The loss was caused by a 1.33 percent decrease in SWISSPORT share price. PRECISION share price remained at the same level as was in June 2015.
Turnover & volume TrendTotal turnover for the 3rd Quarter, 2015 recorded a 20% decrease to (TZS 220 billion) in comparison to the previous quarter, while volume of shares traded decreased by 7% from 70 million to 65 million shares on a quarter to quarter comparison.
The composition of turnover generated during the quarter is as indicated below:
TBL, CRDB, TPCC and TCC were the top four most traded counters in the quarter. TBL had the largest proportion of the total turnover, accounting to 82.99%, whereas CRDB, TPCC and TCC had 8.71%, 3.5% and 2.57% of the quarterly turnover respectively.
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Foreign investors’ ParticipationDuring the quarter under review, foreign investors’ participation in equity trading increased on the buy side from 86.58% to 90.41%. The sale side was 7% compared to 41.11% during the quarter of April to June 2015 depicting a significant drop.
i. secondary TradingDuring the quarter ending September 2015, Government Bonds worth TZS 36.53 billion traded in the secondary market. This shows a decrease of 61.84% compared to the previous quarter (Apr - Jun 2015) where Government Bonds worth TZS 74.45 billion were traded.
ii. Yield Curve on secondary Bond MarketDuring the quarter of July to September 2015, Weighted Average Yield to Maturity (YTM) for 2, 5, 7, 10 & 15 -Year Bonds increased when compared to the preceding quarter. The 2, 5, 7, 10 & 15-Year Bonds average YTM recorded 14%, 11.12%, 4.87%, 5.55% and 2.89% gains respectively.
4) nEw LisTings
PTA Bank listed a Corporate Bond worth TZS 32.6 billion; CRDB Bank PLC also listed additional 435 million shares worth TZS 152 billion following the bank’s rights shares issuance during the quarter.
During the quarter under review Dar es Salaam Stock Exchange listed Government Bonds with different maturities worth TZS 161.26 billion recording a decrease of 57% in comparison to TZS 378.23 billion Government Bonds listed in the previous quarter.
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Term Preference on Fixed income instrumentsDuring the quarter, subscription for long term and short term opportunities were less than the amounts offered. They were positioned at 47% and 88% respectively.
5) sTraTEgiC DEvELOPMEnT MaTTErs;
5.1) Mobile TradingOn 19th August, mobile trading platform was introduced in the DSE Automated Trading and Central Securities Depository infrastructure. This enables investors to simply buy and sell shares via their mobile phones. This is by dialing *150*36# that an investor is able to perform the trading.
6) invEsTOr EDUCaTiOn & PUBLiC awarEnEss iniTiaTivEs
6.1.1) Public awarenessDSE’s CEO continued with his contributions as columnist on The Citizen and Raia Tanzania newspapers. Articles published in these newspapers are educative and also aims at awaken curiosity on stock market issues to different readers including policy makers, prospective issuers and investors.
The same articles can also be found on the publications page of the DSE website.
6.1.2) student visitsDuring the quarter DSE hosted a number of groups from several schools, these groups were namely from: Ubungo Islamic High School, Kibaha Secondary School and Baobab Secondary School.
7) COrPOraTE aCTiOns anD COMPanY PUBLiCaTiOns
During The quarter, TCC and Simba Cement announced dividend to shareholders amounting to TZS 300 and TZS 55 per share respectively.
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TrEasUrY BOnDs issUED anD THEir sUBsCriPTiOn LEvEL in THE PriMarY BOnD MarKET TREASURY BONDS ISSUED AND THEIR SUBSCRIPTION LEVEL IN THE
PRIMARY BOND MARKETTREASURY BILLS AUCTIONED SUBSCRIPTION LEVEL
( Note: T.Bills are not traded on the Exchange)
Issue Type of Weighted Weighted Amount Amount Successful Subsription Date Bond Average Average Offered Tendered Amount Level (%) Yield to Coupon (TZS Bln) (TZS Bln) (TZS Bln) Maturity Yield
July to September 2014 Jul 295 348.48 214.62 72.75% Aug 270 545.60 243.98 90% Sep 270 810.46 585.65 217%
October to December 2014 Oct 270 357.00 288.00 107% Nov 270 315.00 233.00 86% Dec 270 269.00 246.00 91%
January to March 2015 Jan 270 1051.66 579.60 215% Feb 270 1098.08 259.37 96% Mar 270 707.90 385.00 143%
April to June 2015 Apr 270 325 125 46% May 270 298 147 55% June 135 30 8 6%
July to September 2015 Jul 435 176 98 23% Aug 270 496 418 155% Sept 285 372 355 125%
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Bond issue Date interest rate Maturity Date Closing Principal (Fv)
2 TwO YEars BOnDs Total 2 Year Bond Various 7.82% Various 513,558,200,000.00 5 YEar BOnDs Total 5 Year Bond Various 9.18% Various 1,043,248,800,000.00
7 YEar BOnDs
Total 7 year bond Various 10.08% Various 1,217,419,200,000.00 10-YEars BOnDs Total 10 year bond Various 11.44% Various 1,219,448,100,000.00 15-YEars BOnDs Total 15 year bond Various 13.50% Various 271,634,977,000.00
Total value of Outstanding Treasury Bonds 4,265,309,277,000.00
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CONTACTS AND ADDRESSES OF DSE STOCK BROKERS
CORE securities Ltd 4th Floor, Elite City Tower Samora Avenue, Dar es Salaam Tel: +255 22 212 3103 Fax: +255 22 218 2521 [email protected]
Orbit Securities Co. Ltd 4th Floor, Golden Jubilee Tower, PSPF Building Ohio Street, Dar es Salaam Tel: +255 22 211 1758 Fax: +255 22 211 3067 [email protected]
Rasilimali Ltd 3rd Floor, Consolidated Holdings Building Samora Avenue, Dar es Salaam Tel: +255 22 211 1711 Fax: +255 22 212 2883 [email protected]
Tanzania Securities Ltd 7th Floor, IPS Building Samora Avenue/ Azikiwe Street, Dar es Salaam Tel: +255 22 211 2807 Fax: +255 22 211 2809 [email protected]
Vertex International Securities Ltd Annex Building-Zambia High Commission Sokine/Ohio Street, Dar es Salaam Tel: +255 22 211 6382 Fax: +255 22 210387 [email protected]
Solomon Stockbrokers Co. Ltd Ground Floor, PPF House Samora Avenue/ Morogoro Road, Dar es Salaam Tel: +255 22 211 2874 Fax: +255 22 213 1969 [email protected]
E.A. Capital Ltd 6th Floor, IT Plaza Ohio Street P.O. Box 20650, Dar es Salaam Tel +255 779740818/ +255 784461759 [email protected]
Optima Corporate Finance SENGA Street Plot no. 565 “B” P. O. Box 4441 Dar es Salaam Tel; +255 684 856648 [email protected]
ZAN Securities Ltd Mezzanine Floor, Haidary Plaza P.O. Box 5366, Dar es Salaam Tel +255 22 2126415 Fax: +255 22 2126414 [email protected]