The Dar es Salaam Stock Exchange (DSE) is faced with a bleak trading period as a result of an accounting scandal involving Sino-Forest that is associated with the US and Euro zone debt situations. On other hand, the bourse is also affected by macroeconomic instability pushed by a weak shilling, something that is pushing up the cost of raw material plus power outages.
The Tanzania Securities Chief Executive Officer, Mr. Moremi Marwa, said that like most markets in the East African Community region, the DSE is also anticipating a reduced appetite and subdued activity in the coming weeks.
This is pushed by a dent in "emerging markets equities due to multi-billion dollar Sino-Forest accounting scandal, risk associated with the (US) debt situation," Mr Marwa said in a weekly market commentary.
Sino-Forest, a Canadian-listed Chinese company, is facing an accounting scandal following allegations of manipulating earnings figures as their share price has plummeted.
The company lost about US$4 billion dollars (about TSh6 trillion) in market value following a short seller's report on June 2 alleging massive accounting fraud.
The company is also facing at least two lawsuits, which seek class-action certification on behalf of its investors.
"Foreign investors did not participate in today's (Monday) market," market analyst, Ms Florasia Mrema said.
Orbit Securities Head of Operations and Dealings, Mr. Juventus Simon said low participation of foreign investors was restricted by little supply despite high huge appetite on banking stocks.
"I don't think the (Sino Forest) scandal is the reason for little participation. After all it's too early to consider the issue,"
Mr Simon said. On the US debt situation he said it would not negatively affect the bourse.
"It might have impact on NSE (Nairobi Stock Exchange) but not DSE. We are affected by unsupportive economic parameters."
No comments:
Post a Comment