DSE chief executive officer Moremi Marwa Dar es Salaam. The massive impact of Covid-19 on the Nairobi Securities Exchange (NSE) has been strongly felt at the Dar es Salaam bourse, sending the latter’s market capitalisation down by Sh2 trillion within a month, market data shows.
Stocks listed on the NSE have lost Ksh573 billion (about Sh12.6 trillion) of their value over the past two months as the spread of the coronavirus and other economic headwinds spark an exit of foreign investors.
With some of NSE stocks cross-listed at the DSE, the impact did not end only in Nairobi, with latest data showing that Tanzania’s only stock market also lost nearly Sh2 trillion in a period of one month ending March 18.
Covid-19 is compromising global investors’ sentiments and decisions while many were also making exits.
DSE’s reports show that the market capitalisation dropped by nearly 13 percent to Sh15.7 trillion as at Wednesday this week, from Sh17.1 trillion recorded on February 18 this year.
The slowdown of the market capitalisation was due to decrease of share prices for nearly all cross-listed and a few locally-listed companies.
The companies which experienced the shrink of market capitalisation due to fall of share prices include: East African Breweries Limited (EABL), Jubilee Holdings Limited, Kenya Airways, KCB Bank and Nation Media Group (NMG), CRDB Bank, DSE Plc and Swissport.
Analysts project continuing slowdown of equity markets activities due to challenging business and economic situation, as investors are now rushing to safe heavens including gold and government debt instruments.
DSE chief executive officer Moremi Marwa confirmed to The Citizen over the challenges facing the stocks market, saying it was a global concern, as almost each and every country was facing a similar situation.
However, Mr Marwa did not give his predictions for future, but he said this will depend on investor mindset and sentiments, as well as government policies.
Explaining on the reviewed market trends, Mr Marwa said the market has over the last two weeks been experiencing slowed trading activities, citing the absence of foreign investors.He said the Tanzania’s equities market was currently dominated by foreign investors who account for up to 85 per cent of the activities.However, he said the ongoing Covid-19 crisis; nearly all foreign investors have decided to hold their activities, resulting in a significant drop of share movements.For cross-listed companies, Mr Marwa said some of investors have been exiting through the NSE by selling their shares on discounted prices […]