Dar es Salaam. The past few weeks have been nothing short of a roller-coaster for equity market investors.
However, financial analysts advise that this is an opportune moment for value investors to expand their portfolios as stock prices fall.
Zan Securities chief executive Raphael Masumbuko told The Citizen that it is not advisable for investors to sell off their stocks during a crisis, and they should instead take advantage of decreasing share prices and invest more. “It’s best to consult your financial advisor and find stocks that would fit your investment objectives,” he said.
Mr Masumbuko added that in the next few months, companies will start to announce dividends, and this calls for rational investment decisions even as share prices fall.
The Dar es Salaam Stock Exchange (DSE) market capitalisation stood at Sh14.44 trillion at last Friday’s close, the lowest level in six years. The loss in paper value that investors experience at the market is caused by uncertainty as a result of the spread of Covid-19.
The director of operations at Orbit Securities Company Limited, Mr Juventus Simon, said if investors don’t have an immediate need for cash then they should hold onto their stocks instead of selling them.
“If you can hold on to it, then that is what you should do. There is no need to rush and sell now. You better buy more and increase your investment portfolio by buying cheaper stocks that would pay you in the long run,” he said.
Mr Simon further advised investors to look at sectors that would recover quickly when the coronavirus crisis is finally over.
“Buy stocks from firms that you know would eventually have a strong financial ground when all this market panic is over,” he added.