Investors seek to exit Dar es Salaam Stock Exchange over volatility

Dar es Salaam. Investors are massively selling their shares at the Dar es Salaam Stock Exchange (DSE) as fear about price volatility pervades.

A DSE report has shown that there have been massive shares on offer at counters of CRDB Bank, Vodacom, NMB Bank and TCCIA Investment Company Ltd (TICL).

CRDB was leading with 1.7 million shares worth Sh272 million on offer on Tuesday this week. Vodacom had 1.3 million shares valued at Sh1.04 billion.

The TICL counter had 640,557 shares worth Sh288 million and NMB Plc with 633,521 shares on offer valued at Sh1.7 billion.

However, the report shows that only the CRDB counter had 58,000 outstanding bids during the day, while the remaining three had had no bids.

Experts say investors floating their shares as prices are unpredictable. They fear selling their shares at a loss as prices may plummet.

TIB Rasilimali Limited trading head George Sawe told The Citizen: “Every investor wants profit from the shares invested, and when prices fluctuate they sell them before the situation worsens.

“As per Vodacom case, the company initial price was Sh850, but it dropped to Sh800. I am positive that investors are risking to sell at a loss of Sh50, fearing that the price might fall further.”

He said: “If you look at DSE reports you will realise that share prices of CRDB and TICL are not stable. Only NMB shares have remained unchanged for almost three years.”

Volatility is a statistical measure of the dispersion of returns for a given security or market index.

According to Investopedia, in the securities markets, volatility is often associated with big swings in either direction.

For example, when the stock market rises and falls more than one per cent over a sustained period of time, it is called a ‘volatile’ market.