Tanzania: Major Indices End in Red Despite Good Market News

Tanzania: Major Indices End in Red Despite Good Market News

WHAT an eventful week for the Dar es Salaam Stock Market as banks and the Exchange released their quarter three results, the cement sector announcing a major acquisition, while JATU gives a roadmap of the next five years for the company, and most of this have been nothing short of amazing news.

Despite the all-round good news, both major indices still took a beating and closed the week on the red. On the quarterly results, CRDB and NMB have shown that the banking sector is still on a significant growth rampage with even cleaner balance sheets and loan books.

CRDB and NMB recorded an annual profit growth of 39% and 42% respectively, as a result of growing interest incomes from a growing loan book and depository.

Non interest incomes were also growing especially from growing transactions that bring in significant fees and commissions. Both banks reported lower NPLs with NMB reporting 3.8% while CRDB reporting 3.5%. At 55.6%, CRDB was still slightly non-compliant of the cost to income ratio (CIR) which is above the regulatory level of 55%.

The prices of both banks on the exchange, NMB and CRDB, fell during the week by 9.35% and 4% respectively. The Exchange also released her financial results for the third quarter and a cumulative year to September 2021.

Revenue went up by 2.1% on an annual basis while the net profit grew by 8.7%, mostly due to a 28.5% decline in operational expenses.

More than 76% of the Exchange’s income came in from listing fees and investment income, of which majority of both is related to Treasury bonds.

Revenue for the full 2021 financial year is expected to be lower than the year 2020 because of the one-off event regarding the transaction of NMB shares between Rabobank and Arise which happened in December 2020, which brought in significant income for the Exchange.

The price of DSE climbed 1.56% during the week. On another story the parent company of Twiga Cement, Scancem International DA released a joint announcement with Afrisam Mauritius Investment Ltd, which is a majority owner of Tanga Cement, that they have reached an acquisition agreement of the 68.3% stake of Afrisam in Tanga Cement Plc.

The indicative price announced is TZS 3,157/- but the final acquisition price is subject to various adjustments including debt, working capital and any other relevant adjustments.

The announcement has urged investors to trade Tanga Cement shares with caution, and caution they should take, because, […]

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