Tanzania: DSE market cap increases by 4% in second quarter

In a positive development for the Tanzanian financial markets, the domestic market capitalization at the Dar Es Salaam Stock Exchange (DSE) has experienced a notable 4% increase in the second quarter of the year. The significant growth can be largely attributed to the price surge of four key counters in the market. Salum Awad, the CEO of S.S. Capital, shed light on the factors behind this uptick in the market. Moreover, the CEO also highlighted the government's new approach towards managing the COVID-19 pandemic, which has instilled a sense of confidence among investors and businesses. The CEO mentioned that the recent change in the government's strategy towards combating the pandemic has been positively received by the public. People are now more inclined to follow precautionary measures, leading to an improvement in the overall business environment. The clear direction from the government has allowed for better predictions and planning for future investments, thereby boosting investor sentiment and market activity. One of the key drivers of the market capitalization growth was the strong performance of certain stocks, particularly in the cement and banking sectors. Tanzania Portland Cement, a leading cement company in the country, witnessed a remarkable 40% increase in its share price during the reporting period. Additionally, prominent banks such as CRDB also saw gains in their stock prices, with CRDB even announcing a substantial 30% dividend increase. CRDB's expansion regionally, including setting up operations in the Democratic Republic of Congo, has positioned the bank for further growth, especially given the significant business opportunities present in the region. The bank's robust financial performance and strategic moves have made it a preferred choice for investors looking for stable and rewarding investments. On the other hand, the Tanzania Cigarette Company emerged as one of the top-performing and most expensive counters on the DSE. While some have raised concerns about its high price potentially limiting investor flow, the company's strong performance and market dominance have continued to attract interest from discerning investors. The CEO acknowledged that the company's valuation may deter some investors, but its consistent performance has helped maintain its appeal in the market. In the government bonds market, the 20-year bond issuance garnered significant interest, being oversubscribed by nearly 200%. This particular bond offering, along with the 25-year bond introduced earlier in the year, has attracted attention from pension funds and other long-term investors seeking stable investment opportunities. The success of these bond issuances signals a positive outlook for the fixed income market in Tanzania. Looking ahead, Awad pointed out some key trends to watch in the market. He expects the cement sector to remain robust due to ongoing government infrastructure projects. Additionally, he highlighted the upcoming listing of JITO PLC, an agribusiness company with strong financial performance. JITO PLC is set to debut on the exchange soon and is anticipated to be a strong contender in the market, building on its impressive growth trajectory. Overall, the DSE's market capitalization increase reflects growing investor confidence and positive market sentiment driven by strong performances in key sectors. With continued government support for key industries and the introduction of new investment opportunities, the Tanzanian financial markets are poised for further growth and development.