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DSE records substantial market turnover in May

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DAR ES SALAAM Stock Exchange (DSE) has recorded a significant activity after equity market turnover increased by 113 per cent last month, thanks to dividend payments.

Exodus Advisory, a Monthly Market Report, said the equity turnover increased from 4.36bn/- in April to 9.25bn/- last month.

“This primarily resulted from stock demand spurred by release of earnings and payment of dividends,” the report released on Tuesday said.

Despite the turnover increase, the total market capitalisation declined by 2.4 per cent to 15.19tri/- by end of last month while domestic market capitalisation went down by 0.81 per cent.

“This resulted from fall in share prices after the stocks began trading post corporate actions,” the report said.

Similar to the market cap performance, all share index (DSEI) declined from 1,867.18 to 1,821.99 points while the Tanzania Share Index (TSI) decreased by 0.81 per cent.

“This indicates that both local and cross listed counters recorded a negative performance in the period,” the Exodus Advisory report showed.

Locally, TCCL recorded the highest share appreciation of 69 per cent followed by DSE (6 per cent), NMB (4 per cent) and TPCC (0.5 per cent). On the other hand, CRDB recorded the lowest performance falling by 14.81 per cent followed by Jatu 8.62 per cent.

In general, Exodus said, the domestic market has observed a decline as a result of corporate actions undertaken by prominent domestic companies.

“Consequently, it is anticipated that dividend investors will opt to either divest or maintain their positions for the foreseeable future,” it noted.

Additionally, the bourse shows that the banking sector recorded the lowest performance to push down the banking sector index by 4.1 per cent. Commercial services followed with a drop of 0.19 per cent.

“The majority of the counter prices have declined post ex dividend trading date. As such, the market is expected to shift towards fixed income market,” the report painted the future outcome.

However, Industrial and Allied recorded a positive performance growing by 0.91 per cent.

During the month under review, Vodacom Tanzania released their preliminary annual results showing huge turnaround recording a profit of 44.55bn/-.

“This is a significant growth from the loss recorded in the preceding year”.

Overall, the shilling depreciated against the US dollars moving from 2,324/97 as at end of April to 2,330/75 at the end of last month.

NMB shareholders to pocket 143.1bn/- dividend

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NMB Bank has raised its dividend payout to shareholders to a record of 286/- per share this year up from 196/- last year as interest income boosted earnings in the year ended last December.

Owners of one of the country’s top lender unanimously declared the new cash bonus on Friday during the 23rd Annual General Meeting (AGM) of one of the top three most profitable banks in the EAC bloc.

Chief Executive Officer Ms Ruth Zaipuna said after improving its Cost-to-Income Ratio (CIR) to 42 per cent in 2022 against the previous rate of 46 per cent, NMB Bank has now joined the ranks of the most efficient banks in sub-Saharan Africa.

The approved dividend will be cashed on or about June 14, 2023.

Announcing its approval at a press conference in Dar es Salaam at the weekend after the AGM, Ms Zaipuna said 2022 was the best year ever for the bank where each share earned an additional 93/- over the 193bn/- that was paid last year to mark yet another milestone in the 25 years history of the bank as several other financial performance records we set during the year.

“Year 2022 was a historic year and the most successful for the bank. Building on our strength and the remarkable journey we began 25 years ago, NMB Bank posted the best operating results in its history,” she pointed out.

The record numbers include 1.19tri/- total income, the 429bn/- post tax profit and total assets that jumped to 10.2tri/-.

Ms Zaipuna attributed the monumental achievements to the interplay between disciplined strategy execution and the delivery of financial and non-financial objectives.

She said the outstanding profitability outturn was mostly driven by surge in interest income, which rose following increased lending activities.

Non-funded operations also played a pivotal role as use of the bank’s alternative service channels maintained growth momentum.

Other factors she pointed out for the 2022 triumphs were containment of bad loans and taming operational costs.

Whereas the loans impairment charge dropped 28 per cent from 113bn/- to 81bn/-, operating expenses slightly went up by nine per cent but against a 21 per cent growth in revenue.

“Increase in our net interest income was a result of not increasing the lending interest rates but due to increased loaning activities.

The non-interest income also went up 31 per cent,” Ms Zaipuna noted.

Overall, the bank continued to record strong balance sheet growth, supported by healthy funding and capital positions.

Its loan book during the year was up by 29 per cent at 6tri/- from the 2021 level of 4.6tri/-.

The deposits base was likewise higher, ballooning by 14 per cent to 7.6tri/- from 6.6tri/-.

As a result of strong balance sheet momentum, total assets grew by 18 per cent from 8.7tri/-, surpassing the 10tri/- mark for the first time.

The assets quality was also bettered significantly with the risk of losses from borrowers defaults continuing to decrease as the non-performing loans ratio improved to three percent from 3.6 per cent.

“In 2022, we did not only post good results and continue making profitability history but also paid the requisite taxes to the government and continued to touch the lives of people through social investments,” NMB Board Chair Dr Edwin Mhede said.

 

Tanzania: Dar Port Strengthens Regional Market Share

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SIGNIFICANT expansion and improvement of efficiency at Tanzania’s principal port of Dar es Salaam has enabled it to offer faster and cost-effective trade and transport solutions compared to other seaports in the region, a new report by GBS Africa has shown.

According to the dossier by the advisory services firm, Dar es Salaam Port is becoming a regional transshipment hub for exports and imports for both Tanzania and its land-linked countries in the East African Community (EAC) and Southern African Development Community (SADC).

“Land-linked countries like the Democratic Republic of Congo (DRC), Malawi, Uganda, Zambia, Rwanda, and Zimbabwe are increasingly opting for Dar es Salaam Port,” reads part of the report.

The report mentioned some of the products which are transported through the harbour as metals like copper as well as agricultural produce such as tea, coffee, tobacco, oilseeds, cotton, sisal, and cashew nuts.

The port of Dar es Salaam is one of three major ocean ports in Tanzania and handles over 95 per cent of the country’s international cargo traffic.

“Although it is smaller than Durban (South Africa) and Maputo (Mozambique), Dar es Salaam port is fast catching up on the market share for Indian Ocean commerce and trade,” the report stated.

The Dar es Salaam port is designed to handle more than 10 million tonnes of cargo annually including approximately four million tonnes of dry general cargo, six million tonnes of liquid bulk, and one million tonnes of containers.

An expansion programme namely Dar es Salaam Maritime Gateway Programme (DMGP) is being implemented by the Tanzania Ports Authority (TPA) to improve efficiency in handling cargo and will cost at least 421 US million dollars (about 968.3bn/-) upon its completion in 2024.

Commenting on the report, GBS Africa’s Managing Partner, Ms Agnes Gitau, said for the African continent to be fully integrated and for the vision of the African Continental Free Trade Area (AfCFTA) to be realised there is need to invest in Africa’s ports.

A separate report issued in 2016 by the United Nations Economic Commission for Africa (UNECA) pointed to the importance of sea ports in facilitating trade and investments in the continent.

“In Africa as with the rest of the world, the importance of seaports to trade, and therefore, to the continent’s economic performance cannot be overstated.

“Ports are crucial for trade of most African countries due to the continent’s high dependency on exports of raw materials and imports of food, manufactured goods and fuel,” UNECA said in the report.

According to the report by UNECA, more than 90 per cent of Africa’s total trade (including imports and exports) pass through seaports.

“This demonstrates the importance of having well-managed, transparent and efficient operations and management at Africa’s ports,” the report read in part.

While expansion projects and purchasing of modern equipment at the Dar es Salaam Port are ongoing, the government has also been eager to attract businesses and investment which in turn increases imports and exports through the country’s ports.

Since President Samia Suluhu Hassan assumed the country’s top office in March, last year, attracting businesses and investment has been among her top priorities.

The DMGP is carried out with funds from three sources, including a loan of 345 million US dollars from the World Bank, 12 million US dollars grant from the UK Government’s Department for International Development (DfID) and domestic revenues totaling 64 million US dollars.

Upon completion of the project in 2024 it would enable the Dar es Salaam Port to handle 25 million tonnes of cargo from the current capacity of handling over 10 million tonnes annually.

The port will also be able to serve big vessels with length of up to 303 metres which can carry 8,000 containers. That will position the port among ports with capacity and high efficiency in the East African coastline.