Africa-Press – Tanzania. CRDB Bank share price has crossed the 500/- mark for the first time in the last seven years thanks to strong fundamentals.
The lender, one of the largest in the land, experienced the last week price level back in 2015 after liberalisation of Foreign Portfolio Investments (FPI), which also tossed the Dar es Salaam Stock Exchange (DSE) to the roof.
Alpha Capital Head of Research and Financial Analytics, Imani Muhingo, said the CRDB gained 5.3 per cent last week and 26.6 per cent since the beginning of the year.
“This following the bank’s impressive performance in 2022,” Mr Muhingo told ‘Daily News’ over the weekend.
“…The rally on the CRDB shares to new long-time bounds, which [was] subsequently positively impact the Tanzania Share Index (TSI)”.
The bank share was the standout stock of last week after reaching 500/- last Friday. The share lowest point was 95/- in 2019.
Orbit Securities said in its weekly market review—synopsis that those who bought the share at 95/- have realised a remarkable capital gain of 426 per cent at current levels.
“CRDB’s impressive performance can be attributed to its strong fundamentals,” Orbit said.
The bank’s profit before tax had increased by 28 per cent, while its cost-to-income ratio had decreased by 11 per cent, now standing at 49.4 per cent, which falls within the Bank of Tanzania’s recommendation of 55 per cent.
Additionally, non-performing loans (NPLs) have decreased to 2.8 per cent, while total loans, assets, and deposits have all increased by 10 per cent, 6 per cent and 7 per cent, respectively.
In 2015 after the introduction of FPI, the market went off the roof, with both, the TSI and equity turnover reaching historical highs.
Nevertheless, Vertex International Securities said in its weekly Market Review that the domestic equities market recorded a mixed performance last week as the increase in prices came at the expense of volume and turnover.
“Turnover and volume declined [last] week despite the increase in counter prices and foreign buyers as the week was shortened by a public holiday,” Vertex said adding: “We expect the market to outperform next week as investors anticipate positive dividend announcements”.
The turnover at the DSE skyrocketed by 131 per cent to reach 1.5bn/-, and the volume of shares traded increased by 39 per cent to 1.4m/- shares.
Total market capitalization increased by 0.18 per cent to 15.769tri/- and the domestic market capitalization increased by 0.38 per cent to 10.856tri/-.
Foreign investors participated more actively, accounting for over 78 per cent of all trading activity in the market.
While this may be a one-off event, it will be interesting to observe the trends in the weeks ahead to make a fair assessment of foreign participation in the bourse.
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