STOCK EXCHANGE DOWN 20PC AS BANK PROFITS FALL "Credit News 24"
Dar es Salaam. The week-on-week turnover on the Dar es Salaam Stock Exchange (DSE) dropped by 20 per cent last week as investors employed the wait-and-see approach amid a drop in profits for commercial banks.
Sh3.2 billion was realised from 1.4 million shares transacted last week, from Sh4 billion that was registered after some 600,000 shares exchanged hands during the week ending August 4, market data show.
The price for CRDB Bank – which was one of the active counters last week – fell by Sh15 just to reach Sh195 in just days after commercial banks released their financial results for the second quarter of the current calendar year.
CRDB Bank and NMB Bank - which together account for over 50 per cent of the banking industry profits – saw their profits dropping during the quarter ending June 2017 in what analysts believe is a result of liquidity tightening which might have affected lending and loan repayments.
NMB’s net profit dropped to Sh35.293 billion during the second quarter of the current calendar year from Sh45 billion during a similar period last year.
Similarly, CRDB’s net profit dropped by more than a half to Sh13.3 billion during the second half of 2017 from Sh27.473 billion during a similar period last year.
“The stock market does not operate in isolation…..last week’s performance was a reflection of a drop in profits of commercial banks as reported in their recent financial statements,” said Zan Securities Limited chief officer, Mr Raphael Masumbuko.
The fall in CRDB’s share price also sent the DSE’s local capitalization slightly down to Sh7.6 trillion from Sh7.71 trillion.
The DSEI – which tracks the market value of both locally-listed and cross-listed firms – also fell to Sh17.7 trillion from Sh18.3 trillion, largely due to a drop in share prices for KA, USL, EABL and CRDB by 22 per cent, 14 per cent, eight per cent and 7.1 per cent respectively.
The Citizen
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