DSE December trading hits record volume

DAR ES SALAAM: THE Dar es Salaam Stock Exchange (DSE) equity market has strongly ended the year with a total trading volume of 45.4bn/- while December being the highest monthly volume of the year.

The trading volume surge was attributed to year-end sell-offs as investors sought to free up liquidity for seasonal expenses.

December is traditionally seen as a festive month, with many, especially from Kilimanjaro, travelling home for family reunions and year-end celebrations.

The month is marked by a significant increase in travel and social activities, as individuals prioritise spending time with loved ones.

This cultural shift often leads to heightened seasonal expenses, prompting investors to liquidate some of their investments to free up cash. Zan Securities Chief Executive Officer, Raphael Masumbuko, said the situation presents a unique opportunity for investors to acquire highquality stocks at attractive valuations.

“The robust trading volume, is primarily attributed to year-end sell-offs as investors sought to free up liquidity for seasonal expenses,” Mr Masumbuko said in firm’s market wrap-up report.

However, the domestic market value declined by 0.79 per cent during the same period despite the robust trading volume.

Vertex International Securities Research and Analytics Manager, Beatus Mlingi said a closer look of data at quarterly performance reveals a consistent trend for the fourth quarter in 2023 and 2024 was the most active trading period in both years.

“This pattern suggests that year-end portfolio rebalancing and strategic investments play a pivotal role in driving market activity,” Mr Mlingi said.

In 2023, quarter four contributed 145.5bn/-, while in 2024, it accounted for 99.83bn/-.

“December, in particular, stood out as the top-performing month, further highlighting the impact of seasonal trading strategies,” he said.

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On yearly basis, the bourse last year recorded a slight decline in total turnover to 223.12bn/- from 225.7bn/- in 2023.

“The DSE’s performance across 2023 and 2024 reflects a dynamic and evolving market characterised by distinct sectoral and seasonal trends,” Mr Mlingi said.

Additionally, the analyst said the pronounced increase in trading activity during the second half of the year, particularly in the fourth quarter, presents potential opportunities for strategic investment and portfolio optimisation.

“Investors and stakeholders should leverage these patterns to align their strategies with seasonal trends and sectoral strengths, optimising returns and capitalising on emerging opportunities within the country’s growing capital market,” Mr Mlingi said.

Meanwhile, during the trading week ending last Friday, DSE saw a decrease in turnover compared to the prior week.

The total market turnover decreased to 3.552bn/-, reflecting a 64.61 per cent downtick from the previous week’s 10.038bn/-. The prearranged board registered some activities as DSE recorded a block trade.

Throughout the week, DSE dominated trading activities, representing 55.58 per cent of the total market turnover, followed by CRDB at 37.85 per cent and TPCC— Twiga Cement—at 2.83 per cent.

TPCC was the top gainer for the week appreciating by 18.42 per cent reaching 3,600/- per share. CRDB gained 1.52 per cent to close off the week at 670/- per share.

DSE was the sole loser for the week depreciating by 1.67 per cent to reach 2,360/- per share. Alpha Capital Head of Business Development and Customer Service Geofrey Kamugisha said December, “despite fewer trading days and the festive season, recorded a surge in value of shares traded—turnover.”

He said the last December increase was largely driven by activities on the TCC, the cigarette maker, which alone accounted for 39 per cent equals 18.031bn/- of the total market turnover.

CRDB followed with a turnover of 13.644bn/-, while other notable contributors included NMB, TBL, DSE and TPCC.

Local investors dominated market activity, accounting for 95.18 per cent of equity purchases and 64.18 per cent of equity sales.

Foreigners contributed 35.82 per cent of sales but only 4.82 per cent of purchases, resulting in a net foreign inflow of 14.303bn/- (5.97 million US dollars).

Overall market capitalisation declined by 1.2 per cent, closing at 17.868tri/- due to price drops in cross-listed counters EABL and JHL Group. Conversely, domestic market capitalisation rose by 0.3 per cent to 12.243bn/-, driven by the price appreciation of CRDB and Tanzania Tea Packers (TaTePa)