1. BY HELLEN NACHILONGO
Special Corespondent
THE VALUE of Tanzanian compa-
nies trading on the Dar es Salaam
Stock Exchange has risen by Tsh8
trillion ($4.5 billion) in the past 21
months, new data shows.
Between December 2011 and De-
cember 2012, domestic companies’
value grew by Tsh3 trillion ($1.7 bil-
lion), up from Tsh2.4 trillion ($1.3
billion).
DSE programmes and projects
manager Magabe Maasa said from
January 2013 to date, domestic
market capitalisation and indices
have more than doubled.
“The domestic market capitalisa-
tion increased from Tsh5.98 trillion
($3.4 billion) in January last year to
Tsh8 trillion ($ 4.5 billion) October
this year,” he said.
He said the 13 listed companies
on the DSE, among them Tanza-
nia Breweries Ltd (TBL), Tanzania
Cigarette Company (TCC) National
Microfinance Bank Twiga (NMB),
Swissport and CRDB, have been do-
ing well.
The banking sector has contrib-
uted 30 per cent of the total turno-
ver and 89 per cent of the market
activity recorded for the past few
weeks.
Most active counter
DSE data shows that in the past
21 months, the CRDB counter was
the most active on the segment
after transacting 2,073,167 shares
trading at Tsh160 ($0.09) and clos-
ing at Tsh330 ($0.18) per share over
21 months.
NMB traded 152,068 shares from
Tsh1,240 ($0.71) to Tsh4,390 ($2.52)
per share over the same period.
Twiga traded Tsh10,047 shares,
from Tsh2,600 ($1,49) to Tsh3,790
($2,17) per share.
TCC was the most active coun-
ter trading 114,117 shares, closing at
17,510 per share. Swissport followed
with 57,186 shares traded from
Tsh3,900 to Tsh4,300 per share.
TBL’s price appreciated by 9.9
per cent, from Tsh2,900 ($1,660) to
Tsh16,960 ($9.58) per share.
TCC chairman and chief execu-
tive officer Majd Abdou said in
the statement that TCC recorded
Tsh35.3 billion as profit after tax
for the six months ending June 30,
2014 up from Tsh44.3 billion it re-
corded in the same period last year.
Tanzanian
companies
win big at
Da≥ bou≥se
By ALLAN OLINGO
The EastAfrican
Kenya has invited bids for a
12-year infrastructure bond
worth $224 million in a tap sale
to, among othe things, fund ex-
pansion of the Jomo Kenyatta
International Airport at a cost
of $72.3 million.
“The bids will be received up
to November 20, or until the
amount is allocated to bids once
they are submitted, or whichev-
er comes first,” Kenya’s Central
Bank said in a statement.
The Kenya Airports Author-
ity has been under pressure to
complete the project, which
will see the airport’s overall
passenger capacity rise to more
than 30 million per year, up
from 7 million.
In October, the first tranche
of $169 million of the bond,
with an average yield of 11.263
per cent, was oversubscribed.
The Central Bank said it was
in the money market to mop up
$112.17 million in excess liquid-
ity, using repurchase agree-
ments and short term auction
deposits.
Ally Khan Satchu, a finan-
cial analyst with Rich Man-
agement, said that by mopping
up liquidity, the bank makes
it relatively costlier to hold on
to long dollar positions, which
helps strengthen the shilling.
The Kenya shilling strength-
ened in October, helped by im-
porters’ low demand for the
dollar and expectations of hard
currency inflows from offshore
investors in government se-
curities: It closed at 89.25/35
to the dollar last week, firmer
than the month’s average of
Ksh89.45/20.
The shilling has performed
dismally against the dollar for
much of the year, largely be-
cause of the high demand for
dollars by importers against
the low-performing tea and
tourism sectors.
Last week, the government
rejected more than half the
bids for an infrastructure bond.
The demand for Kenyan Treas-
ury bills is likely to rise as in-
vestors seek new berths for
their funds.
The Central Bank intends to
sell Treasury bills of all maturi-
ties worth $134 million in two
separate auctions. Last month,
Kenya sold 182-day and 364-
day Treasury bills worth a total
of $101 million.
Kenya debuted in the Eu-
robond market this year, bring-
ing in $2 billion.
Last week, Tanzania an-
nounced plans to allow foreign
investors to participate in the
purchase of government secu-
rities through Treasury and
infrastructure bonds without
restriction starting next year.
Bank of Tanzania associate
director of Domestic Markets
Department Paul Maganga said
the move will open up the mar-
ket to competition leading to
increased borrowing.
Tanzania also issued 364-day
Treasury bills last week worth
$45 million, with a weighted
average yield per annum of
13.96 per cent; the country ac-
cepted bids worth $32 million.
The Bank of Tanzania also is-
sued a 15-year Treasury bond at
17.9 per cent, up from 17.5 per
cent in August.
“The Bank of Tanzania plans
to issue 2-year, 5-year, 7-year,
10-year and 15-year Treasury
bonds during the second quar-
ter covering October to Decem-
Regional economies bank on bonds
Investo≥s seeking new
oppo≥tunities a≥e looking
to East Af≥ica’s ma≥kets
th≥ough bills and bonds
Newly-built Terminal 1A at Jomo Kenyatta International Airport. Kenya has invited
bids for a bond to fund expansion of the airport. Picture: File
ber 2014,” a statement from the
Bank said.
The 2-year bond tenures cou-
pon rate will be 7.82 per cent, 5-
years at 9.18 per cent, the 7-year
bond will be 10.08 per cent and
the 15-year bond will be at 13.50
per cent.
“We are studying the out-
come of the current set up to
assess the demand for our gov-
ernment securities from within
the EAC. Once we see the out-
come, we will open up partici-
pation to the rest of the world,”
Mr Maganga said.
Currently, Tanzania only al-
lows investors from within the
EAC to purchase up to 40 per
cent of offered government se-
curities; individual countries
are not allowed to purchase
more than two thirds of the 40
per cent quota.
Meanwhile, the Ugandan
shilling lost ground, pressured
by a demand for hard currency
from manufacturing and en-
ergy firms.
Despite this drop, Finance
Minister Maria Kiwanuka last
week said the country’s econo-
my will grow at 7 per cent per
year in three to five years.
“This growth is buoyed by in-
vestments by oil explorers and
by expansion in the services sec-
tor. Uganda has scaled up pub-
lic infrastructure investments
with various multibillion-dol-
lar investments in roads, rail-
ways, electricity and the oil sec-
tor. We have also managed to
keep inflation under control at
5 per cent, through a tight fis-
cal and monetary policy,” Ms
Kiwanuka said.
Rwanda’s Finance Minister
Claver Gatete said the country
plans to launch another Eu-
robond to fund infrastructure
projects; the size and timing is
still being worked out.
Speaking at the UK-Rwanda
investment conference in Lon-
don a fortnight ago, President
Paul Kagame said Rwanda’s
successful Eurobond offering
last year showed that the trust
in Rwandans is shared by fi-
nancial markets as well.
“The confidence of both lo-
cal and foreign investors in
Rwanda is a key component of
our economic growth and in-
vestment strategy,” President
Kagame said.
Last year, Rwanda issued a
$400 million Eurobond issued
on the Irish Stock Exchange in
the UK. The Rwandan govern-
ment used the proceeds to fund
mega projects.
EUROBONDS
Tanzania plans to float a
Tsh1.1 trillion ($700 million)
Eurobond in December to
fund infrastructure projects.
Kenya debuted in the
Eurobond market this year,
bringing in $2 billion.
After a successful issue last
year, Rwanda plans to launch
another Eurobond to fund
infrastructure projects; the
size and timing is still being
worked out.
However, Uganda has
said it will stay out of the
sovereign bond market and
use concessional loans for its
development instead.
GROWING INFRASTRUCTURE
NOVEMBER 1-7,2014 61
MARKETS
MONEY AND EQUITY