TBL’s pre-arranged deal boosts DSE turnover by Sh4.7 billion

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Dar es Salaam. Turnover at the Dar es Salaam Stock Exchange (DSE) rose by 23 percent last week, thanks to a Sh4.7 billion pre-arranged deal by foreign investors at the Tanzania Breweries Ltd counters.

With the deal, the turnover jumped to Sh4.9 billion from the preceding week’s Sh3.9 billion.

The deal saw TBL accounting for 96.6 percent market share of last week’s trading activities as Twiga Cement and CRDB Bank Plc held 1.49 percent and 0.76 percent of the market turnover, respectively.

Experts anticipate a forthcoming shift in investor preferences towards fixed-income securities as several counters enter the ex-dividend period.


Last week the market also experienced bullish movements as two counters experienced price gains.
Self-listed DSE led the gainers with a notable increase of 5.56 percent, closing at Sh1, 900 per share. Twiga Cement observed a gain of 0.49 percent per share, finishing the week at Sh4, 120 per share.

Analysis by Vertex International Securities Ltd showed that in the secondary market, the investor’s activities continue to surge surpassing Sh100 billion.

The weekly outlook by the brokerage firm showed that there were a total of 48 deals from the Treasury Bond segment last week, recording a turnover of Sh191.63 billion.

Most Turnovers were contributed by the 20-Year Treasury Bond recording 62.08 percent of the market turnover, followed by the 25-Year Bond recording 23.13 percent, and the 10-Year Bond 10.98 percent.

Tanzanians in the Diaspora to get special status by December

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Dar es Salaam. Tanzania is set to complete the process of instituting special status for its citizens living in the Diaspora by the end of 2023.

Winding up debate on her docket’s Sh247.9 billion budget for 2023/24, Foreign Affairs and East African Cooperation minister Stergomena Tax told Parliament the government recognises the role of Tanzanians in diaspora and that it will complete the process of granting them special status (Tanzania Non-Citizen Diaspora) by December.

“Diaspora made 10 recommendations that have been considered and will be included in the special status arrangement, but in the endorsements, there was no suggestion of divine rights,” she said.

Dr Tax added that what the diaspora wanted was to be able to enter the country, own land and access financial services, all of which have been considered in the proposed special status framework.

Presenting the budget earlier, she told the House that the move was among the ministry’s plans for 2023/24 that are meant enable the Tanzanian diaspora to fully contribute to the country’s development.

Dr Tax noted that the diaspora should play a greater role in the country’s economic undertakings as the government strives to create an enabling environment for this endeavour.

“The ministry compiled the views of various stakeholders inside and outside the country, including from the diaspora. The views have classified issues that should be considered in the special status arrangement,” she said.

Unlike its regional peers Kenya and Uganda, Tanzania has yet to allow dual citizenship, a matter that emerged again in Parliament yesterday.

Legislators were divided on the issue when debating the ministry’s budget.

Prof Palamagamba Kabudi (Mvomero-CCM) said the relevant issue in the country currently is special status and asked the ministry to finalise the matter to help the diaspora.

“Now, this is better than what we keep debating, which is the issue of dual citizenship. This dual citizenship matter has no framework in this country, but it also has no agenda elsewhere in the world and so we should hold on to special status and push it forward,” he said.

Prof Kabudi added that his research shows that only 49 percent of countries in the world embrace dual citizenship.

Prof Kitila Mkumbo (Ubungo-CCM) said what they were fighting for was not someone else coming to apply for Tanzanian citizenship, but rather they were concerned about Tanzanians losing their divine right.

He said studies show that one of the ways to resolve jobs the jobs crisis academics are facing is to prepare people to become citizens of the world so that they can find jobs by removing obstacles.

“If it comes to dual citizenship or special status, it is not a problem for me. The big issue is how do we protect the rights of our people who go to look for opportunities in other countries,” said Prof Mkumbo.

Ms Fakharia Shomari (Special Seats-CCM) said it is still too early for Tanzania to allow dual citizenship and the country should continue to consider special status because it provides everything the diaspora needs.

In response, Dr Tax noted that the issue of dual citizenship is still open to debate in Tanzania and beyond.

She said President Samia Suluhu Hassan has strived to make sure that the diaspora who are in foreign countries and who Tanzanians are by birth get their rights and emphasised the process of granting them special status.

“If you grant dual citizenship right now when there is no national and international framework, there are those who may miss out on the opportunities that we hope to provide,” she warned.

According to Dr Tax, diaspora’s remittances and investments in the economic and social sectors in the country have continued to increase.

In the period from January to December 2022, diaspora invested about Sh4.4 billion in the purchase of houses and plots through National Housing Corporation, Orange Tanzania Ltd (Hamidu City Park), and KC Land Development Plan Consultant Ltd.

The investment is equivalent to an increase of Sh2.2 billion invested in the period from January to December 2021.

In another development, Dr Tax said that the assessment of the ministry’s foreign affairs policy has identified new areas that need to be included in the policy and brought up new strategies for the implementation of the policy, to match the current and future environment including emphasis on economic diplomacy.

The Sh247.9 billion Parliament approved for the Ministry of Foreign Affairs East African Cooperation’s recurrent and development expenditure is significantly higher than the Sh208.3 billion allocated for the current financial year.

T-bills prices keep plunging in nine months

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Treasury bills’ minimum successful bids and weighted average prices have been decreasing consecutively in the last nine months throughout the year.

The bills’ prices on average have dropped from their highest of 99/84 in the auction held last August to 99/67 in the auction held on the third day of May.

Tanzania Securities’ Treasury Bills Analysis report issued yesterday showed that the last five auctions recorded the same price of 99/67.

“Investing in Treasury bills may not make sense, especially for individual investors seeking higher yields and optimum long-term growth.”

However Treasury bills are considered low-risk investments offering competitive yields compared to other similarly safe investments, such as bank savings accounts, the Tanzania Securities report said.

The 364 bill offers yields of 7.22 per cent.

However, the report said, the bills are crucial and valid to institutional investors such as banks and insurance companies for liquidity purposes.

On the other hand, the T-bills weighted average yields have improved from their lowest value of 1.68per cent recorded last August to 3.45per cent at the last auction.

Additionally, unlike other bills, the 364 days T-bill has the highest investor appetite among the four T-bills because it is the most transacted.

“The T-bill has been transacted in all the past 23 auctions and with it being oversubscribed in most of the auctions.

“The yield trend of the 364-day bill has been increasing throughout the year,” the report said.

The 364 days T-bill yields have improved from 3.3 per cent reported on the auction that occurred last May to the all-time high of 7.2 per cent recorded on the auction conducted in mid-January.

Also, unlike other T-bills, the weighted average price of 364-day is always higher than the minimum successful bid because of the large number of bids at different prices.

The 182-day T-bill’s weighted average yield keeps on increasing while prices drop. The bill recorded the highest price of 99/16 with the lowest yield of 1.7per cent in the auction held last May. On February 8, the bill recorded the highest yield of 5.23 per cent with the lowest price of 97/46. On the last traded auction, the bill recorded a yield of 5.4 per cent with a price of 97/38.

“The 91-day T-bill has a similar characteristic to that of the 35-day bill in that both minimum successful bids and weighted average prices have been decreasing throughout the year,” the analysis said.

The weighted average prices of 91 days have dropped from the highest of 99/41 recorded last June to 99/20 recorded on the last auction.

While the weighted yield also improved from 2.4 per cent to the highest of 4.0 per cent recorded on the last auction.

Additionally, the 35 days T-bill minimum successful bids and weighted average prices have been decreasing throughout the year.

Prices have dropped from their highest of 99/84 in the auction held last August to 99/67 in the auction held on May 3, which was similar to the prices of the last five auctions.

However, the 35-day weighted average yields have improved from their lowest value of 1.68 per cent recorded last August to 3.45 per cent at the last auction.

The 364-day Treasury bill is the most transacted security, transacted in all 23 auctions, followed by the 182-day, which was transacted in 15 out of 24 auctions and the 91-day was transacted in 11 auctions, the same as 35-day T-bills.

 

DSE returns to bull ran

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Activities on the Dar es Salaam Stock Exchange (DSE) increased for the second week running.

Turnover for the week amounted to 3.9bn/-, an increase of 48.20 per cent from the previous week. General market was in bullish mode leading to an increase in both total and domestic market capitalisation.

The top three trading counters within the week were, TBL, CRDB, and NMB, dominating the market with 57.44 per cent, 27.42 per cent, and 10.41 per cent of the overall market turnover, respectively.

Four counters registered price gains within the week, Simba Cement (TCCL) leading the gainers as the Scancem acquisition seems imminent.

Simba cement registered 28.38 per cent gain within the week closing at 1,900/- per share, SWISS gained 6.49 per cent per week ending the week at 1,640/-. NICO as well registering a 2.5 per cent gain within the week closing at 410/- per share, lastly CRDB registered a 2.04 per cent increase within the week to close at 500/- per share

On the loser’s side, DCB Bank dropped by 2.63 per cent closing off the week at 185/- per share.

Total market capitalisation increased by 2.12 per cent to 15.151tri/- and domestic market capitalisation increased by 0.52 per cent closing at 10.934tri/-.

Key benchmark indices

  • All Share Index (DSEI) closed at 1,816.97 points increasing by 2.12 per cent.
  • Tanzania Share Index (TSI) closed at 4,133.050 points increasing by 0.52 per cent.

Sector Indices

  • Industrial and Allied Index (IA) closed at 5,128.51 points, up by 0.46 per cent.
  • Bank, Finance and Investment Index closed at 4,029.69 points, up by 0.82 per cent.
  • Commercial Services Index closed at 2,161.21 points, down by 0.20 per cent.

Highlights: Debt Market

Primary market

On Wednesday 17th May 2023, the central bank was in the market offering 103bn/- to investors for a new 5-year Treasury bond offering an 8.6 per cent coupon rate annually.

This auction was catered for investors with more preference for medium-term papers.

The auction was subscribed by 46.17 per cent – the auction received bids totalling 47.55bn/- and accepted bids worth 44.15bn/-.

The weighted average yield to maturity has gone up by 17.87 basis points relative to the previous auction held on January 4th 2023 from 9.6670 per cent to 9.8457 per cent.

Average yields have been on an upward trend over the last four auctions gaining 90.77 basis points from the average yield in May 2022. Moreover, the price floor has reached 92.4 from 96.5 in the same period.

This continues to reflect lessened monetary policy accommodation by the central bank to taper inflation.

This 5-year Treasury bond had been undersubscribed, as were the previous two 5-year auctions. This reflects investor’s current appetite for long tenures such as the 25-year Treasury bond due to its higher cash flow appeal.

Additionally, the recent increased stock market activity can also explain the low auction subscription as higher-risk investors’ shift to equities.

Secondary market

Market activities were elevated during the week, the overall turnover for the trading week ending May 19 increased by 114 per cent from 61.68bn/-registered in the previous week to 132.34bn/-.

Moreover, number of trades increased from 45 trades recorded in the previous trading week to 58 trades.

Overall tenures traded were predominately on the long end of the of the yield curve, the on-the-run 20-year T-bond accounting for 45.33 per cent of the traded volume.

There was a fixed income trade during the week involving a NMB corporate bond with a notional value of 6.0m/- and an average price of 85/94.  We expect secondary trading activities to remain elevated in the coming weeks.

Inflation

Inflation rate drops to 4.3 per cent after slightly going down by 0.4 percentage points in April, after the prices of some food and non-food items slightly declined.

The national bureau of statistics (NBS) statement on Wednesday showed that inflation dropped to 4.3 per cent from 4.7 per cent in March.

Impact

The decline in the inflation rate might be a positive sign that the government’s efforts to contain and maintain the inflation rate are working. This creates favourable conditions for investment for both international and domestic investors.

Outlook

Domestically, we understand equities strategies for 2023 should be focused on companies with solid fundamentals, which will show more growth. From a macro-economic perspective, low inflation and resilient cost pressures will be key drivers to compliment the quality of Tanzania equities. Given the strong growth environment in the companies are expected to increase top line and bottom-line growth relative to FY 2022.

In the short-term we might see slight volatility in the weeks ahead as companies begin to exercise their corporate actions.

TMRC bond attracts more local investors

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THE Tanzania Mortgage Refinance Company Limited (TMRC) has listed on the Dar es Salaam Stock Exchange (DSE) the 4th tranche bond of which all of its investors are locals.

Compared to the previous tranches, luring more Tanzanian investors brings more hope for increasing the liquidity in the capital market.

Moreover, retail investors scoped a big chunk with 69 per cent against 31 per cent of corporate investors during the public offering.

During the public offering which was opened on April 3, until April 24, the TMRC targeted to collect 10bn/- but it successfully oversubscribed by collecting 11.28bn/-, equivalent to 112.8 oversubscriptions.

Speaking at an event to grace the listing of the bond over the weekend, Commissioner for Debt at the Ministry of Finance and Planning, Mr Japhet Justin, pointed out that the move would give more opportunities to people to invest and list their shares on the DSE.

“When we raise funds for the mortgage refinancing, we should also consider how we can reach out to more people for mortgage loans,” Mr Justin challenged as he commended the TMRC for consistently listing the tranches of the bond on the DSE.

He argued that mortgage contribution to the Gross Domestic Product (GDP) was still minimal, below one per cent, hoping that as more people invest in the DSE the sector’s contribution would increase.

Chief Executive Officer of the Capital Market and Securities Authority (CMSA), Mr Nicodemus Mkama, said the sale of the TMRC bond has been positive in the development of the capital market and finance sector at large in the country.

Mr Mkama noted that 69 per cent being retail investors shows a positive gesture in the implementation of the National Financial Inclusion Framework which intends to increase the participation of citizens in the formal financial sector, including the capital market.

He attributed the success to the ongoing public awareness campaigns over the benefits of investing in the capital market.

Mr Mkama further argued that the achievement was a result of the presence of an enabling environment offered by the government.

Commenting, the Acting Chief Executive Officer of the DSE, Ms Mary Mniwasa, said in the past 12 months the DSE has listed four bonds worth 135bn/-.

However, she said the demand was quite high for corporate bonds despite the global economic crunch.

CRDB to pay record Sh117.5 billion in total dividend to its shareholders

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Arusha. Shareholders of CRDB Bank Plc will get a total of Sh117.5 billion in dividends this year, thanks to the lender’s improved profitability in 2022. This represents a roughly 25 percent increase over the Sh94 billion total dividend the bank paid its shareholders last year from its 2021 net profit.

The bank’s shareholders will receive a dividend per share of Sh45 billion this year, up from last year’s Sh36 billion. “The rise in our profitability and hence our dividend is testament to the success of our five-year medium strategy that ran from 2018 to 2022,” CRDB Bank board chairman Ally Laay told shareholders here at the weekend.

At group level, CRDB Bank’s net profit rose by 31 percent last year to reach Sh351.4 billion, compared to Sh268.2 recorded in 2021.

He said CRDB Bank’s Burundi subsidiary exhibited a splendid performance last year when its net profit rose by about 80 percent to reach Sh23 billion from Sh12.8 billion in 2021.

“This means that the Burundi subsidiary alone contributed 7.0 percent to the Group’s profit,” he said, detailing a number of initiatives that the board and the management will undertake to grow the profits further in that country.

Recently, CRDB Bank was granted a licence by the central bank of the Democratic Republic of the Congo, officially known as Banque Central du Congo (BCC), to commence its operations there.
Similarly, CRDB Bank Group has also introduced an insurance subsidiary, CRDB Insurance Company (CIC), as well as its own foundation this year.

Speaking on the Bank’s performance, the Group CEO and Managing Director, Abdulmajid Nsekela, said in the financial year 2022, the efforts to strengthen income continued to yield positive results, with a growth of 28 percent in operating income to Sh497.7 billion.

The growth was fueled by an increase in net interest income, which grew by 15.5 percent year-on-year to Sh745.8 billion, driven by loan book growth. The Group closed the year with an NPL ratio of 2.8 percent, thus meeting the regulatory requirement of less than 5 percent.

The Bank also recorded strong balance sheet growth, with a year-on-year expansion of 32.0 percent from Sh8.8 trillion in 2021 to Sh11.6 trillion. The growth was contributed by a 26.4 percent increase in customer deposits, reaching Sh8.2 trillion from Sh6.5 trillion reported in 2021.

“Our efforts to enhance the efficiency of our operations continue to bear results with significant improvements in our cost of business as reflected in the cost-to-income ratio, which has improved significantly from 66.7 percent in 2018 to 49.4 percent in 2022,” he said.

CRDB Dividend Declaration Notice – Year 2022

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Notice is hereby given that dividend of TZS 45 per share in respect of the
financial year ending 31 December 2022 has been proposed by the Board of
Directors. Pursuant to this declaration, shareholders are advised to observe the
following:
Dividend Declaration Date:  28th April 2023
Trading of Shares cum Dividend: 28th April 2023 to 18th May 2023
Trading of Shares Ex Dividend: 19th May 2023 onwards
Closure of the Members Register: 23rd May 2023
Re – opening of the Register: 24th May 2023
Dividend Payment Date: 05th June 2023

Shareholders are requested to submit and update their payment details at the
Share Registry Office to enable the timely payment of their dividends.

Shares Registry Office
CRDB Head Quarters – 10th Floor
Cnr. Ali Hassan Mwinyi Road/Obama Drive, Dar es Salaam, Tanzania
E-mail – shares_unit@crdbbank.co.tz
Mob number: 0755 197 700
WhatsApp number: 0767 757 215

BY ORDER OF THE BOARD
John Rugambo
Company Secretary
28th April, 2023

SWALA OIL & GAS PLC TO COMMENCE LIQUIDATION PROCESS

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The announcement states that Swala Oil & Gas (Tanzania) plc will be placed in liquidation as per the resolution of its creditors representing approximately 75% of the Company’s liabilities.