By Azania Post Reporter
TOTAL size of domestic listed companies, as measured by market capitalization, and the liquidity (trading turnover) for the market during the quarter that ended 30 September 2017 both increased when compared to the quarter ended 30 June 2017.
Domestic market capitalization in total increased by 26 percent to close the quarter at shillings 9,743.35 billion from shillings 7,759 billion as of 30th June 2017 — this was largely a result of listing of VODACOM Tanzania PLC (VODA) coupled with the increase in prices on some counters, mainly the DSE and Swissport counters.
According to DSE the two factors compensated for the decrease in prices on: Tanzania Portland Cement (TWIGA), by 16 per cent, Tanga Cement (SIMBA) which lost by 15 per cent, TOL by 2 per cent, as well as TBL, DCB and MKOMBOZI whose prices declined by 1 percent each, to result into the net increase in market capitalization and indices.
Market liquidity also recorded a moderate increase during the quarter. Trading turnover increased by 11 percent, from transaction value of shillings 117 billion in the previous Q2, 2017 to transactions value worth shillings. 129 billion during this quarter (Q3, 2017).
The VODA listing had a positive impact in the overall DSE market size. As a result of this listing, the DSE total market capitalization recorded an overall increase of 6 per cent during the quarter, from shillings 19,286 billion as of 30th June 2017 to shillings. 20,355 billion as of 30th September 2017 – this is an increase of shillings 1,069 billion.
The 1,725 billion shillings valuation that was added in total DSE market capitalization following VODA’s listing could not be wholly reflected, because it was negatively impacted by the decrease in value in other counters -- both domestic (as mentioned and listed above) as well as for cross listed companies, mainly by ACACIA whose price decrease resulted in a valuation decrease amounting to shillings 1,488 billion (42 per cent) during the Q3, 2017.
On the valuation: Weighted Average Market Price Earnings (PE) Ratio for domestic listed companies was trailing at 13.67 times compared with the PE trailing of 15.91 times as of 30th June 2017.