The share price of the start-up hit a jackpot of 3,920/- mid-last week, but made a sudden U-turn and plunged and closed the week at 2,940/-.
Stock analysts failed to peg demand that was behind Jatu’s rally, saying it was defying business fundamentals since the firm’s books failed to justify the bull-run.
Tanzania Securities said in its Weekly Market Blast report yesterday that even though it had remained a mystery to justify Jatu demand as the bourse was likely that it might remain active for some coming trading sessions.
“…But we remain wary that price will [further] decline during the week,” Tanzania Securities said in the report.
Orbit Securities said last Monday in its Weekly Market Synopsis report that the counter had risen by nine fold over a month since it was listed late last November.
“The rally originates from the surprise that persists on the Jatu counter where company fundamentals are being totally defied…Or rather different fundamentals from the company’s books are being used to determine the value of the company,” Orbit said.
The Dar es Salaam Stock Exchange (DSE) daily market report of last Friday showed the firm market cap that climbed up from 1.08bn/- on the listing day to cross 7.0bn/- dropped to 6.34bn/- after its share decreased by 9.82 per cent in a week to Friday.
The firm, despite the market cap drop, was still on top of Uchumi Supermarkets with market capitalisation of 1.82bn/- and TaTePa market cap of 2.24bn/- and MuCoBa with 3.26bn/-.
The Jatu market cap is slightly behind Yetu Microfinance Bank with 6.66bn/-, while TBL is the largest in terms of market cap at 3.216tri/-.
Jatu now seems to walk on the Swala Energy pace which also rallied to 2,000/- from 500/- after listing, but dropped to the IPO price and stagnated there ever since.
Both are listed on DSE’s alternative market. Nevertheless, stock brokers are upbeat that the market will continue with its activities registered in the last four weeks.
“In the coming week,” Tanzania Securities said, “like the previous week there could be an increase in market activities as we have witnessed an increase in market activities during the start of 2021.
“We still prospect that the market will remain vibrant going forward, thanks to prospects from the banking sector performance for the year ending 2020 and activities in the industrial and allied sectors.”
Zan Securities said in its Weekly Market Wrap-ups yesterday that the equities market showed positive signs this week as some counters recorded an increase in price.
“We expect the momentum to continue next week as investors anticipate good results from financials and industrials,” Zan said.