Foreign investors’ appetite for stocks at the Dar es Salaam Stock Exchange (DSE) remained relatively low during the first quarter this year accounting for an average of 24.5% of the 20.4bln/- equity turnover realized during the period.
According to DSE data, foreign investments into DSE accounted for 16.7% of the total investments while foreign sales accounted for 32.2% of the total sales during the quarter.
This marks a net foreign outflow of 3.15bln/- being slightly lower as compared to a net outflow of 6.8bln/- posted in Q4, 2022 and a net inflow of 4.5bln/- in Q1, 2022.
According to the Alpha Capital Research and Analytics Head Imani Muhingo, “We expect limited foreign participation and net outflows in emerging and frontier markets including Tanzania in Q2, 2023, as division and tensions take a front seat in global developments. The pace of rate hikes in the U.S is also another major determinant of the direction of foreign funds flows going forward,”
The Tanzania Share Index (TSI) gained 1.1% during March and 5.2% since the beginning of the year, outperforming the All Share Index (DSEI) on both periods, after the latter dropped by 1.85% during the month and gained a mere 0.36% year to date.
The Underperformance of the DSEI originates from Nairobi based cross listed counters, following a 11.5% drop of the total market capitalization of NSE during the first quarter.
Heavy lifting of the TSI was done by the two largest banks, CRDB and NMB, as the climbed 20% and 16% year to date respectively.
CRDB gained 5.6% during March 2023 while NMB remained at the same price as in the end of February. The two banks are still sought after by investors expecting handsome dividends from an impressive annual performance by the two banks.
The Top movers for March were Swissport Tanzania (Swiss) and Tanga Cement (TCCL) which climbed 29% and 28% respectively.
Swissport’s rally originated from the Saudia Airlines announcement to launch four trips a week between Jedah, Saudi Arabia and Dar es Salaam, Tanzania whose activities in Dar es Salaam shall be handled with Swissport.
TCCL is riding on the speculation of the acquisition proposal resubmitted to the Fair Competition Commission (FCC) in early 2023, after the Fair Competition Tribunal (FCT) halted the acquisition on anti-trust grounds late last year. The resubmission gave fresh hopes to investors, mostly retail.
Other gainers included DCB Bank which gained 6.25% following a 143% profit growth for the year 2022.
The price went up despite that the bank is not equipped to pay dividends for the year 2022 due to missing regulatory thresholds on non-performing loans and cost to income ratio.
Other gainers were National Investment Company Ltd (NICOL) and Twiga Cement (TPCC), both gaining 5.3% and 3.1% respectively. NICOL also gained on the back of a 53% profit growth for the year 2022, while the closed-ended fund manager is projected to receive more than 5.5bln/- in dividends from the most profitable bank in the economy, NMB. NICOL is the top gainer for the year 2023 so far, with its price rising by 23.1% year to date.
The gain on the TPCC counter resulted from both, good performance for the year 2022 and speculation on the success of the acquisition deal which shall potentially open up about 1.3mln tonnes in cement production capacity for Twiga Cement, and a wider market and distribution corridor in the northern parts of the country.
Moreover, a successful acquisition is expected to hand Twiga Cement a substantial amount of limestone deposits, currently under the custody of Tanga Cement.