Shilling depreciation fails to move shares at DSE

THE shilling depreciation has little impact on the movement of shares at Dar es Salaam Stock Exchange (DSE), an economist said on Thursday.

Tanzania Securities Chief Executive Officer, Moremi Marwa, said yesterday that the depreciation was mainly caused by a scarcity of foreign currencies.

“Most investors are now focusing their attention on long term gain,” he said. He said that the impact could have been felt much if the depreciation had taken a long period.

“The depreciation is temporary, so its effects are minimal and will not erode the anticipated gain, he said. He added that the negative trend will improve once the export season for the traditional crops, namely coffee, cashewnuts, cotton, cloves begins end of next month.

In the last ten days, the shilling has hit a low level ever after dropping by almost 20/- against the US dollar to trade at 1,530/- at money exchange shops. The official central bank rate stands at 1,516/-.

On Tuesday, while the shilling is tumbling, DSE all-share index appreciated by 71.43 points to close the trading at 1261.62 and Tanzania Share Index (TSI) jumped to 1045.31 points.

According to DSE daily market report, the indexes appreciation was driven by increasing share prices of Simba Cement and National Microfinance Bank (NMB). Simba stock price increased by 2.04 per cent to 2,000/- a piece and NMB went up by 2.5 per cent to close the session at all time high at 820/- a share.

Mr Marwa attributed the stock appreciation of NMB to foreign investors who are attracted by the equity relative low price compared to similar shares in the region. On Simba shares, he said investors are attracted by the handsome dividend by the company.

The firm dividends returns stand at 13 per cent per year which is among the highly paid stocks.