Tanzania: DSE performance in H1 2023

The Dar es Salaam Stock Exchange (DSE) has experienced a significant decline in turnover in the first half of 2023 compared to the same period last year. The overall turnover fell from Sh75.1 billion in the first half of 2022 to Sh49 billion in 2023, marking a notable decrease in market activity. In an interview with CNBC Africa, DSE Acting CEO, Mary Mniwasa, shed light on the factors contributing to this decline in performance. Mniwasa highlighted a drop in volume of shares traded and turnover on the equity side of the market, with a 44% decrease in shares traded and a 35% decrease in turnover. One of the key reasons behind this decline, as pointed out by Mniwasa, is the lower participation of foreign investors in the market. While local investors have shown increased activity, foreign investors have somewhat pulled back. This shift in investor dynamics has impacted the stock market's liquidity, leading to a decrease in overall liquidity levels. Mniwasa noted that market rules, which are considered restrictive, are being reviewed to facilitate more trading activities and improve liquidity across various counters. Looking ahead, Mniwasa expressed optimism about the second half of the year, anticipating a potential improvement in market performance following regulatory changes aimed at enhancing trading rules. The focus on boosting market activity includes public awareness campaigns, the revamping of the mobile trading platform, and efforts to educate the public on market operations and investment opportunities. In terms of stock performance, CRDB Bank and NMB emerged as the most active counters during the first half of 2023, with significant activity driven by dividend announcements and payments from these listed companies. This highlights the importance of key players in driving market movement and attracting investor interest. The impact of political unrest in neighboring Kenya has also had ripple effects on the DSE, particularly affecting cross-listed counters like KCB and the National Media Group. The decrease in prices of these cross-listed companies has contributed to a decline in the total market capitalization of the DSE, despite an increase in local market capitalization. On a positive note, the bond market on the DSE has shown resilience, with the secondary market for debt securities performing well. The volume and turnover in debt securities have seen a significant increase, signaling a strong performance on the debt side with activities surging by approximately 250 percent. Overall, while the first half of 2023 presented challenges for the DSE in terms of declining turnover and market activity, there are efforts underway to drive growth and enhance investor participation in the upcoming months.