THE Dar es Salaam Stock Exchange (DSE) index has been pushed by 5.26 per cent to hit 30-month price cap on Monday, thanks to an announcement by the Dar es Salaam Community Bank (DCB) that has announced a dividend of 48/- per share.
The positive response follows the historical dividend announcement to elevate the stock to hit 400/- mark, which was the listing cap price in August, 2008 when the bank's share started to trade at the bourse after a successful initial public offer (IPO).
The share price increment enabled the Tanzania Stock Index and DSE all-share index to settle at 1057.54 points and 1215.91 respectively.
DCB offered a 1.58bn/- as dividend, presenting half the bank's profit in last year to enable each shareholder to receive 48/- per share as dividend.
This is almost double of the amount offered in 2009 of 28/- per share when the bank posted a net profit of 1.84bn/-.
Orbit Securities, Head of Operations and Dealings Juventus Simon told the 'Daily News' that the dividend offered by DCB is so far the highest this year with a yield rate of 12 per cent. "The demand for the bank share is already on the higher side while supply is not low.
This signifies a continuation of price increase," he said yesterday. Mr Simon said most investors prefer to hold their stocks due to the bank's fundamental performance especially in the last few years.
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"The attractive low price of DCB as measured by the PE (price/earning) ratio would continue to attract increased buy position-taking on the counter," the commentary issued by Tanzania Securities says.
DCB Chairman, Mr Paul Rupia, said last week that that despite challenges in the market, they hope to do even better this year, pegging hopes on the growth of deposits to 109bn/- from the current 79.2bn/-.
The bank targets to lend small and medium enterprises 81.6bn/- next year from the current 58bn/-. It also plans to open two more branches this year.
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