DESPITE a change of the tide on the last trading session of the week,
The Tanzania Share Index (TSI) went down by a 0.2 point due to a pull down by
The total market capitalization on the other hand appreciated by 2.33 per cent to a high of
The total turnover during the week amounted to
TCC traded a total of 280,000 shares at a price of 6,000/-, in one deal, in a prearranged block transaction. The transaction went through at a 65 per cent discount from the official market closing price of 17,000/-.
TCC was closely followed by TBL which accounted for 31.4 per cent of the total turnover after moving 150,853 shares at a weighted average price of 6,145/-. Majority of transactions still go through the prearranged board and making up the majority of the equity turnover.
Most prearranged transactions go through fractions of the official closing prices of the respective counters, creating a Net Asset Value calculation paradox for fund managers invested in companies listed on the
Fund managers use the official closing prices of listed counters in the calculation of their Net Asset Values. In a scenario where a significant majority of transaction is executed at more than 50 per cent discounts in prearranged block transactions, the official closing prices become unrealistic, creating a peculiar difficulty in the holdings' valuation by these fund managers.
The case is with various counters on the Dar Exchange, most notably TBL, TCC and NMB. A bigger challenge is with open-ended fund managers who buy these counters at such discounts while still using official closing prices for valuation because immediately after settlement, the Net Asset Value of such funds appreciated by the unrealistic proportion of the discount.
The final beneficiaries of this are withdrawing unit holders who are allowed to cash-in the unrealistic immediate returns. While net buyers of CRDB, foreign investors were net sellers of TCC and TBL, ending the week on a net seller position. Foreign investors accounted for 80.2 per cent of the total divestments while local investors accounted for 76.7 per cent of the total investments made during the week.
The net foreign outflow was
The Bank accepted a total of 54 bids worth
Currency Market While the value of transactions on the
The weekly value of transactions on the IFEM has been lower than
Further the shilling has shown consistent marginal depreciation since the third week of January, indicating possible tightening foreign exchange liquidity in the banking sector.
The
A net purchase position indicates that the central bank is mopping up extra liquidity from the banking system.
From recent weeks' reports it seems the liquidity position has tightened compared to that of December which needed mopping. orbit@orbit.co.tz; imani@orbit.co.tz
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