Tanzania market watch: DSE market performance driven by domestic investors

The Dar es Salaam Stock Exchange (DSE) has recently experienced a surge in performance driven primarily by domestic investors. Salum Awadh, the CEO of SSC Capital, shared insights on the market's recent trends during an interview with CNBC Africa. At the end of last week, domestic investors accounted for a significant 70% of the market's performance, signaling a shift from the conventional dominance of foreign investors. Awadh mentioned that there has been a notable recovery in the stock market, particularly for the week ending last Friday. This uptick is a positive indicator that the market is on a trajectory towards regaining previous levels. Notably, the recent trading activities have been heavily influenced by domestic investors, a departure from the norm where foreign investors typically dictated market movements. Analyzing the performance of listed companies, Awadh highlighted that the release of H1 results led to diverse outcomes for different entities. Companies that demonstrated strong performance during the first half of the year were expected to contribute positively to the market's overall performance. Crucially, companies like NMB and CRDB in the banking and financing sector have consistently delivered robust performances, reflecting positively in their stock prices. However, some companies experienced setbacks, illustrating the unpredictable nature of the Tanzanian market compared to larger international markets. The interview also touched upon J2 PLC, which recently resumed trading after a suspension. The company, having conducted an IPO, witnessed a price increase of 10% post-resumption, showcasing encouraging signs for its future performance. Awadh expressed optimism that J2 PLC would continue to attract investor interest and potentially bolster its stock price further. In a groundbreaking move for the Tanzanian market, an insurance company issued the first Islamic bond, marking a milestone in financial products catered to Muslim investors. The bond saw a subscription rate of 36%, underscoring a strong appetite for Sharia-compliant investment opportunities among investors. This development signifies a positive shift towards inclusivity in the market, providing new avenues for investment that align with investors' religious beliefs. Domestic investors have emerged as key players in driving market activity, accounting for 76% of trading compared to foreign investors at 24%. This trend of heightened domestic participation raises the question of whether it will become the new norm in the Tanzanian market. Awadh expressed optimism that the renewed confidence among local investors, coupled with ongoing efforts to enhance investor education and awareness, would likely sustain and potentially increase domestic investor participation in the market in the coming months. In conclusion, the recent performance of the DSE propelled by domestic investors signals a shift in market dynamics, with local participants playing a more significant role in driving trading activities. As the Tanzanian market continues to evolve and introduce new financial products, investors are presented with a diverse array of opportunities, marking an exciting phase of growth and inclusivity in the region's financial landscape.