DSE delivers resilient performance amidst COVID-19 pandemic

The Dar Es Salaam Stock Exchange (DSE) has demonstrated resilience in the face of the ongoing COVID-19 pandemic. Despite the challenges posed by the global health crisis, the CEO of DSE, Moremi Marwa, provided an overview of the exchange's performance in 2021 and highlighted how the market is positioning itself to be more attractive and vibrant as we head into 2022. Marwa highlighted that the market experienced a mix of performance, with strength in fixed income, particularly in Treasury bonds, while facing challenges on the equity side. Despite this, there was overall growth in market indices, with domestic market cap up by 2% and total market cap up by 1%. This positive growth, especially in such challenging times, was viewed as a relatively good performance by Marwa. The liquidity in fixed income saw a market turnover of nearly a billion dollars, while equities had levels around 50 million dollars. One of the key factors contributing to the market's resilience was the government's efforts to access finance through the capital markets by issuing bonds to fund economic and social infrastructure projects. This move was well received by investors, leading to significant oversubscription in auctions, especially for long-term instruments like 15, 20, or 25-year bonds. Marwa emphasized that domestic investors, including banks, pension funds, fund managers, and retail investors, showed a keen interest in participating in these longer-term treasury bonds. The increasing financial literacy among retail investors was also noted, with the number of retail investors more than tripling over the past three years. The CEO pointed out that the market trend was leaning towards fixed income as investors sought safer options amidst the uncertainties brought about by the Omicron variant and the ongoing pandemic. Looking ahead to 2022, Marwa predicted that fixed income would continue to be preferred over equities in the market. While there were challenges in some equity counters, particularly in liquidity enhancement and pricing performance, sectors such as banking, manufacturing (especially cement), and financial services continued to attract investor interest. In terms of product offerings, DSE currently lists equities (both domestic and cross-listed), treasury bonds, and corporate bonds. The uptake has been stronger for treasury bonds and corporate bonds compared to equities, although some stable and dividend-paying companies in certain sectors still attracted investor attention. As the exchange looks towards 2022, Marwa expressed optimism, noting a return of foreign investors and a positive outlook for the fixed income segment. DSE is positioning itself to capitalize on opportunities in the fixed income market, with potential issuance of municipal bonds or special purpose vehicles (SPVs) from municipalities and cities to further leverage investor appetite. In conclusion, Marwa reiterated that the exchange is poised for continued growth and attractiveness in 2022, with plans to further enhance liquidity and explore new opportunities. The DSE's resilience and adaptability in navigating the challenges of the pandemic underscore its potential for sustained success in the coming year.