Dar es Salaam — Investors at the Dar es Salaam Stock Exchange (DSE) have held off from offering millions of shares, as the current shares prices are not in favour of sellers.
The DSE report has shown that the market had only 14,820 shares available on offer on Tuesday from more than three million shares, which were available during the opening day of this week. All offered shares belonged to the DSE, whose price gained on Tuesday. Analysts say most of the investors withdrew their shares because of the low deal as buyers are also targeting discounts in a time when the market is flooded with outstanding offers.
Zan Securities chief executive officer Raphael Masumbuko said many investors have cancelled their decision to sell their shares due to low prices and they might come back when the share price will stablise.
However, he did not state whether unavailability of shares on the market will help to stimulate the prices of shares, if there will be an increase in demand.
“Companies can only issue outstanding offers if they see that their offer price will be profitable, otherwise investors withdraw their offer to avoid selling at a loss,” said Masumbuko. Mr Masumbuko explained further that investors could withdraw their offers if there was no demand.
“When sellers see that there are no buyers, they always hold back shares until the market stablises,” he explained
Mr Juventus Simon, the CEO for Orbit Securities Ltd said that low outstanding offers means that there is low number of buyers of shares in the market which cause investors to withdraw their offers.
However, the DSE market capitalisation went down by Sh300 billion to Sh20.1 trillion on Tuesday from Sh20.4 recorded on Monday this week. The decrease in the market price was a result of decreased share prices, including Acacia Mining stocks.
Total turnover also went down to Sh52 million on Tuesday from Sh320 million recorded during the previous day.
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Publish date : 2018-11-02 06:45:30