THE shilling depreciation has favoured foreign investors’ participation on Dar es Salaam Stock Exchange (DSE), who are buying more shares as their involvement has increased by 91.35 per cent in the first quarter.
The shilling in this year’s first four months sunk to its lowest level in history since the local currency was introduced in 1966 after crossing a 2,000/- mark.
Market analysts have it that the shilling’s depreciation works in favour of foreign buyers who now get more shillings when changing their dollars to have more purchasing power.
On the other hand, foreigners get little when selling their shares at the current exchange rate thus holding their sales.
The DSE Chief Executive Officer, Mr Moremi Marwa, said the fall and rise of shilling against major currency has an effect to stock players, especially foreign investors whose returns have to be converted into hard currencies.
“ÉObviously this brings into the fore the issue of foreign currency risk, which is one of the key risk considerations for any investor,” Mr Marwa said, ‘hence, stability of the local currency is preferred than otherwise.”Last week the bourse equity market’s turnover decreased by 46 per cent to 9.94bn/- from 18.52bn/- posted on the previous market.