Bond trading boosts DSE turnover by over 50% in March
Liquidity at the Dar es Salaam Stock Exchange increased by 53 per cent in March, this was attributed to the rise in trading of government securities which offset a minimal drop in shares at the beginning of the year. And as of this morning, the Nairobi Securities Exchange has acquired a 4 per cent stake in the Dar es Salaam Stock Exchange. CNBC Africa spoke with Moremi Marwa, CEO of Dar Es Salaam Stock Exchange for more.
Thu, 08 Apr 2021 17:58:32 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Renewed interest from both local and foreign investors has led to a 53% increase in liquidity at the DSE, with government securities trading offsetting a slight decline in share trading.
- Domestic institutional investors returning to the market have boosted investor confidence and attracted foreign players, resulting in a 25% increase in the value of the DSE counter.
- Companies like CRDB and NMB have shown strong performance, while challenges persist for others like Tanga Cement. The uptake of government bonds signals a growing appetite for secure investment options, with cryptocurrencies also gaining traction as potential future listings on the exchange.
The Dar Es Salaam Stock Exchange (DSE) experienced a significant increase in liquidity in March, with trading of government securities driving a 53% boost. This surge offset a minor decline in share trading at the start of the year. In a recent development, the Nairobi Securities Exchange acquired a 4% stake in the DSE. The CEO of the DSE, Alia Moremi-Mara, highlighted the positive trend in trading activities since Q4 of 2020 and Q1 of 2021. Both foreign and local investors have shown renewed interest in the market, indicating confidence in the economic sectors and listed companies. The influx of liquidity has led to a rise in trading activities and market capitalization, with a notable increase of almost 263 billion Tanzanian shillings gained by investors in the past three months. This growth is a stark contrast to other markets experiencing negative growth, showcasing the resilience and attractiveness of the DSE. Domestic institutional investors returning to the market have been a key driver of this positive trend, along with foreign investors seeking opportunities in a market with growing potential. The DSE counter itself has seen a remarkable 25% surge in value compared to December 2020, reiterating investor confidence and interest in the exchange. The self-relisting of the DSE in 2016 has proven to be a strategic move, attracting investors and contributing to the exchange's overall performance. The recent acquisition of a 4% stake by the Nairobi Securities Exchange further underscores the DSE's appeal to regional players. Companies listed on the exchange have shown varying performances, with banks like CRDB and NMB experiencing significant growth while others faced challenges. The uptake of government bonds by both retail and institutional investors has been notable, reflecting a growing appetite for secure investment options. The government's borrowing for infrastructure projects has fueled the demand for government securities, driving trading activities in the primary and secondary markets. Despite challenges faced by some companies like Tanga Cement, opportunities for growth remain in the market, particularly with the increasing demand for cement driven by infrastructure projects. While the performance of certain companies may be affected by external factors, strategic restructuring and alignment within these firms could lead to improved financial performance and market value. The discussion also touched on the rise of cryptocurrencies like Ethereum and Bitcoin, highlighting the potential for future listings on the DSE. Overall, the DSE's recent performance points to a promising outlook for investors and the market as a whole, with increasing liquidity, foreign investment, and a diverse range of investment opportunities driving growth and confidence in the exchange.
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