Tanzanian market update

The Dar Es Salaam Stock Exchange experienced limited activity last week, reflecting a trend seen in the first half of the year with significant declines in equity volumes and turnover. Ammi Julian, an Investment and Research Analyst at Orbit Securities, discussed the market's recent performance. Despite a mixed week, corporate actions, such as Vodacom's announcement of dividend payments after a two-year hiatus, generated positive sentiment for investors. However, the market saw limited activity as foreign investors engaged in selling while domestic investors focused on buying. This reallocation of portfolios may be driven by foreign investors offsetting African currency risks, which have been affecting financial markets across the continent. Active counters like Nikol, CRDB, NMB, and C-Spot attracted attention. Nikol's unique value proposition, with 60% of its portfolio invested in NMB, presented investors with an indirect opportunity to buy into the leading stock. Additionally, Nikol's undervaluation and upcoming dividend payment in December heightened investor interest. Swissport faced challenges as its recent earnings report revealed lower-than-expected profitability, increased operating expenses, and rising finance costs. The company's performance serves as a barometer for the Tanzanian economy, particularly in the tourism sector, showing signs of recovery with increased tourist activity. The market's shift towards domestic investor-driven activities signifies a departure from foreign investor domination, resulting in lower turnover due to smaller trade sizes. Liquidity concerns stem from limited actively traded counters, expensive stock prices, lack of stock splits, and high costs associated with block trades. Retail investors are left with few options, with hopes for improved liquidity in the latter half of the year.