By Allan Olingo

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Kenyan and Tanzanian stock exchanges recorded positive growth in turnover in the first quarter of this year, largely driven by the domestic market.

The Dar es Salaam Stock Exchange (DSE) ended the first quarter to March with 14 per cent increase in turnover to $37.88 million, compared with $33.17 million over the same period last year.

According the bourse’s latest report, investor wealth increased by $179.97 million after the market’s domestic capitalisation rose to $4.7 billion from $4.52 billion in the last quarter of 2017.

At the start of last year, the DSE domestic capitalisation plunged three per cent to $3.29 billion after foreign investors started selling off their stocks, tightening liquidity within the bourse, due to jitters caused by policy changes by the John Magufuli administration. Now, the markets seem to be overcoming this.

“This drop was as a result of selling pressure emanating from socioeconomic needs in the quarter and decreased foreign investor activity,” DSE chief executive Moremi Marwa said in his quarterly report.

The report also showed that the bourse’s liquidity had decreased by eight per cent to $32.9 million, from $36.4 million.

In the quarter under review, foreign investors remained dominant players on the stockmarket 95 per cent on the buying side and 67 per cent on the selling side.

Improvement

The DSE domestic stocks index (TSI) closed the quarter at 4,092.14 points, an improvement from last year’s first quarter of 3572.68 points, after banking stocks suffered a bad loan rout that saw its stocks take a hit.

In terms of profitable counters, Tanzania Breweries Ltd (TBL) was the only counter that ended the quarter on a positive note, having moved shares worth $1.32 million, closing the quarter at $6.82 million from $5.9 million at the start of the year.

DSE has 19 listed firms cutting across banking, energy, manufacturing, agriculture, insurance, mining and commercial services sectors, with seven of them cross-listed on the Nairobi Securities Exchange (NSE). Last year, it added Vodacom Tanzania through an initial public offering.

In Kenya, the NSE registered a $3.2 billion growth in investor wealth in the first three months of this year. Market capitalisation rose to $28.2 billion from $25 billion at the start of the year. 

Data from Cytonn Investment showed a 73 per cent rise in equity turnover in the three months to March to $600 million, from $347.2 million in the last quarter of 2017.

The NSE 20 Share Index rose by 2.5 per cent in March, compared with 0.4 per cent in February and 0.7 per cent at the start of the year.

The NSE 20 Share Index rose by 3.6 per cent in the first quarter of 2018 while the NSE All Share Index rose by 11.7 per cent closing the month at 191.23 and the market cap-weighted NSE 25 Index rose by 15.9 per cent.

Data released by Standard Investment Bank shows that turnover in March rose to about $230 million from $180 million in February, and $200 million in January.

This was driven by the Safaricom, Equity Bank and KCB Group counters, which accounted for 23.8 per cent, 21.6 per cent and 16.3 per cent respectively of the total in March.

Foreign sell resulting from the exit of profit-taking foreign investors slowed down in March to $11 million from $50 million in February, and $14 million in January.

This could however rise in April, after most listed firms declared their 2017 profits and dividend numbers at the end of last month.

Banking sector

The banking sector led in their stocks gaining this quarter, taking seven of the top 10 stocks which saw their counters rise by up to 22.7 per cent in March.

Equity Bank was the top gainer at 22.7 per cent to hit a price of $0.51 per share. KCB recorded the least gain at 10.1 per cent. Barclays Bank of Kenya recorded a 31.8 per cent gain while Co-operative Bank saw its price rise by 22.5 per cent.

Equity Bank’s counter had the highest share of foreign investors who transacted 69.4 per cent of turnover. It was followed by KCB Group at 66.1 per cent.

Executive director at Standard Investment Bank Job Kihumba said that the total trading is still limited to less than five per cent in terms of turnover as a proportion of total market capitalisation.

“We need to see the local investor’s trade more by taking advantage of price changes if there is to be increased turnover,” said Mr Kihumba.

The SIB data also showed that Express Kenya, East African Breweries Ltd (EABL) and Total Kenya made it to the top 10 best performing counters in March, which saw their prices rise by 30.7, 10.9 and 10.1 per cent respectively.

In terms of losers, troubled Athi River Mining, Kenya Airways and Trans-Century saw 26.7, 23.6 and 21.9 per cent shaved off their quoted prices respectively in March. The three firms posted losses in the 2017 full year, in results they released last month.

In Uganda, the USE All Stock Index rose to 2193.36 in the first quarter of this year from 1554.35 at the end of the same period in 2017.

The top gainers were the NIC counter with a 5.9 per cent change in its price. The USE has seen its market capitalisation rise to $8.21 billion in the first quarter of this year compared with $5.8 billion over the same period last year. BOBU, SBU and DFCU were the most active counters.