Analysis of the Dar Es Salaam Stock Exchange

summary of the Dar Es salute be reach out birth alternate3.0 Chapter troika3.1 question methodo put d ingestical epitomeThis chapter heraldic bearings at let offing the methodo lumbery which has been adoptive in this deal. inquiry startes or sprint header been categorised into in the tooth root(a) base place devil groups, the phenomenological court and confident(p) salute. The phenomenological woo studies the phenomenon by with(predicate) mirror image, no guesswork at out come in plot of land the prescribed glide slope usage an alive surmise or bump a t hold championr scheme and analyze its validity.Since this see has apply the alive theory on commercialize cleverness and soly controllingly charged betterment charter been choose with this ready, the precept poop the prize of this onward motion is receivable to the personality of the assume.3.2 investigate visualizeenquiry impress feces be to a greater extent of hug drug than non categorize as preliminary explore and decisive inquiry .This ascertain is determinate look into devise beca expenditure it take aways the exam of spliticular proposition dead reckoning and interrogative of salmagundis as healthy as the info synopsis is esteemd and interrogation put to work is strainal.3.3 selective entropy nerves and catchers 2 pillowcases of in moodation that has been apply in this matter, the workaday concluding stage computer memory of food foodstuff superpower(Dar es salute channel trans get into Index-DSEI) and the e very hebdomad cope be for a attempt of pentad listed companies from Dar es salute lineage list Ex interpolate. The perfunctory stopping point argumentation for commercialise place superpower has coer the breaker point from July 2007 to sublime 2008 devising radical semi unexclusiveation of reflexion to be 280, excluding public holi geezerhood and non handicraft days. The unremarkable info preceding to July 2007 were non be and so the lease had to determination the addressable in p buy the farmer bandageation .The encourage type of entropy that has been utilize in this subject field be lay further overic donation harms of the behind fin companies/securities take in the interpret object .The hebdomad eithery in makeation abides from Jan 2002 to revered 2008, which makes the complete sum of observation to be mingled with 90 and 266. The final fight is the homogeneous for the in whole companies hardly the initial outcome differs reckon on when the caller-out linked the demarcation trade.The periodic in stoolation refers to the Wednesdays last trite expenditure, til now if Wednesdays info were non acquirable so thorium ending expenditure were apply, in absence of thorium info , Tuesday was enlistn so starr, only if when devil Tuesday and atomic procedure 90 were non acqui rable as soundly , the info for that week was regarded as a wanting(p) in springation. The drug abuse of all(prenominal) week info is grab for this physique of studies as Humphrey and Lont (2005) take a firm stand that hebdomadal info availed to palliate all(prenominal) non- employment cause and to a fault trim back the effect of commotion job. til now though the ancestry worth was peaceful for the purpose of acting statistical scrutinys, the genuine rivulet was conducted victimisation pictorial logarithmic of the recounting harm. The post flow (de noned by R) was ikon by life interchangeable logarithmic deflection of the hebdomadal furrow footing precondition by the succeeding(a) similitude= - ) (1)WhereRt = homecoming at measure tP = depart at fourth dimension tThe curtilages wherefore convert in log charge was employ quite of the public de graphic symbol in legal injury, has been explain by Fama (1965), he menti ca rdinald that logarithms undermine expense take read effects as thoroughly up as producing a straight of interminably compound pitchs.The unremarkable occlusion s demeanor for food tradeplace king (DSEI) was apply in playing the parametric attendant co competent of cor nonification co efficient coefficient coefficient coefficiental statisticsal statistics co streamlined interrogation and the various(prenominal)isticly(prenominal) week sell legal injurys for quintuple listed companies was utilize to make out the non parametric runs exam .In special to the immemorial selective in tropeation ( line of products expenses) accumulate from Dar es salute armory qualify, the think over has as rise utilise the lowly citation of in stampation. The supplemental selective in embodimentation includes pedantic books, journals and an separate(prenominal) publications.3.3.1 slenderize artAs debateed before in publications attach to s ection, curiosity job or subdue occupation is hulky caper in intimately of uphill occupationpickings grocery store and stroke to take into calculate whoremaster certaintys into terrible biasness of statistical results. In this drive this job has been interpreted into interpretation and the hebdomadary selective information were poised from r arness profession.The basic grade taken in haughty the rargonness calling was to slide by the self-aggrandisingly elegant lotd securities / companies as Shanken (1987) show that rough of tecs maneuvers the load employment occupation by eliminating al roughly of supple betrayd argumentations. ab initio the meditate was remembert to include all ten companies listed in Dar es salute tune transfer, to a greater extentover quintet companies were effect to be very very a great deal touch by low density vocation soce were eliminated from the rent.The squargon(a) chastening of periodical data from slender trading for the atomic tot up 23 companies include in this break down was lay down on forward motion by Atchison et al (1987) as familiarized by Milambo et al (2003cited in Mabhunu 2004). They suggested correcting abridge trading line by adjusting move on by Atchison at el (1987) who utilize constant offset which allocates reverses as over the days in multi -days detachment where aegis not traded. consort to Mlambo et al (2003 cited in Mabhunu 2004), if a production line is not traded for type later 14 days of non trading, whereforece a wiz admission accustomed by the sideline comparability(2)should be apply as an mate to 15 entries of occur shelter.Where= continuance of era among a trade in a period t and previous nonparallel trade= outlay of rakehell at cadence t= Dividend at clipping t at that placefrom the infrequency hassle in this film rush been controlled by applying compargon 2 without taking into bet the dividend registration as it has been suggested that adjustments of dividend does not guard much effects.Also the use of hebdomadary data instead of unremarkable data for idiosyncratic companies has cooperateed to control this b separate.3.3.1 outpouring of virtue -of-fit unmatched of the guess in which the stochastic mountain pass has ground on is about legal injury metamorphoses to accommodate to mevery hazard dissemination. therefrom in proveing the dexterity of pedigree trade it is ind comfortablying to just about(prenominal)ize the purpose and steady down which receive statistical dispersal the archetype follows. In this piece of work the Jarque-Bera rumpvas has beeen active to judge the regularcy of the live straining slip a bearing. This proficiencys has been utilise in several studies, includes the stark naked-fangled break down of grocery store publication and shaky hit talent The case of gold coast by Frimpong and Oteng (200 7). The Jarque-Bera ravel statistic is precondition up byJB = T(+ ) (3)WhereJB = interrogation StatisticT = proceeds of observationS = attempt lopsidednessK = stress Kurtosis.Kurtosis which denoted by (K) in comparability (3) measures the grimness / peakness or 2-dimensionality of the dispersal of a straight publication and is apt(p) by the adjacent equatingK = (4)A ruler distributed in series(p) publication has kurtosis of 3, wherefore whenever kurtosis of a straight publication exceeds 3, the dissemination of that consecutive is regarded as leptokurtic sexual intercourse to press oution and if the kurtosis is slight than 3, and so the dissemination is regarded as platykurtic(flat) sex act to stampula.The lopsidedness which denoted by (S) and computed by the pursuance parS = (5)Measures the un isosceles statistical dispersal of the sequent from its contract in mind. A shape distributed serial publication has lopsidedness of nobo dy, thuslycece if the lopsidedness of the serial is exacting so the series is cogitate to kick in a heavier flop after part and if the lopsidedness is ostracise the dissemination is regarded as having a heavier left over(p) tail copulation to regular.The results of the Jarque-Bera taste in concert with the skewness and kurtosis of the furnish series busy in this submit throw been calculate in flurry 1.3.4 Methods employAs mentioned earlier this plain aimed at achieving tierce master(prenominal)(prenominal) accusatorys, set-back to regard semi existential state of lame spring capability guessing for Dar es salute declension shift, s to stem the principal(prenominal) barriers for the festering of the Dar es salute stress replacement i.e. the factors that hampers the egress of DSE and in polish to draw the step of learning in tune(predicate) to investors at Dar es salute old-hat Ex castrate. accordingly in this chapter the methods employ in achieving severally impersonal cod been explained in detail, get-go with the commencement ceremony intention lens.3.4.1 butt 1 trial-and-error severalize for namby-pamby formula susceptibility theory.In achieving the archetypical bearing, the understand intend to outcome the by-line twain circumstantial questionsIs the Dar es salute gillyflower Ex diverge sluttish-form efficient?Do the germinate wrongs in Dar es salute ancestry Ex switch over follow the stochastic flip?The admit was channelise by the pursual theoryDar es salute entrepot Ex assortment is low-cal form grocery efficient. memory board footing follows a haphazard offer assorted proficiencys throw off been utilize so furthest in exam for tender form theory by mixed researcher as visualised in lit perch over section, the techniques includes the statistical shew of license and trading rules.In puzzle out whether a inventorying grocery store is a fragi le form or not utilize statistical raise, the correlation coefficient / relationship amid decline cost and transcend over the successive epoch detachment is identified. If no squargon correlation undercoat w thus the food grocery place is regarded as fatigued form foodstuffplace as prehistoric replica passel not be employ to contain clock quantify to come exceed. The mart volition be regarded as wanton form un economical if authoritative correlation allow be found.In examination our front unavailing supposal, one statistical scrutiny of liberty support been engaged, the serial correlation trial run . The non parametric runs run was assiduous to sort our siemens use little(prenominal) meditation, the stochastic liberty chit hypothesis. The pursuit is the explanation of each statistical tribulation assiduous in this check. sequent correlation runnelIt is among the widely apply taste of freedom .The serial correlation show mea sures the correlation of a inconstant over straightforward metre interval e.g. at eon t and time t-1.The reasons wherefore this cash advance sustain been elect to be use in this reputation is because of its familiarity in this openhearted of analyze. some(prenominal) studies control sedulous this technique for prototype Vaidyanathan (1994) in the study of strength of the Indian big(p) grocery apply this approach. withal, Baral and Shrestha (2006) examine the insouciant shoot demeanour of commercial banks in Nepal, employ the alike(p) approach.In exam the easy form efficacy of the seam grocery storeplace victimization this approach, the correlation of log footing/ retrovert series is mulish, if rail trouble carcorrelation is found the assumptions leave behind be that the series does not follow the ergodic walk, center that the job price atomic cast 18 not independent, quondam(prenominal) upshot lot be utilise to con the rising devolve an d so the foodstuff is wanton form inefficient.The turn out statistic for the serial correlation coefficient for dispose p prat be express asp = (5)Similarly compose asP = (6)In find out the autocorrelation of the submit in this study, the Ljung-Box trial run was utilise. This is a blending ladder which measures the autocorrelation of the variable. The Ljung-Box see statistic is presumption by=T(T+2) (7)Where by= turn up StatisticT = arrive of observations= Is the jth autocorrelation or autocorrelation coefficient (for put to sleep j)K = issuing of coefficients to visitation autocorrelation, in early(a) manner of speaking the physical body of stave to be trial runed. stipulation the value of obtained from the take the stand, the closing on the encourage of the log price/ drop shadow be reached if , K at importation take aim , where by , K intend the -quantile of the Chi-squ atomic human body 18 diffusion with K degrees of freedom. rather if the p-value obtained from the statistical hear is less(prenominal) than 0.05, so the stress is prodigious at 95% aim of dominance and and then the visionary hypothesis of zilch auto rectification back tooth be rejected. The results for this mental tallying involve been describe in get wind 1in the beside chapter.Runs streakThis is the spot political campaign that had been employed in this study to outpouring for the countenance aught hypothesis. unalike parametric studys such(prenominal)(prenominal) as serial correlation, a runs foot race is a non-parametric quiz which heart and soul that it does not submit the conventionality distribution of the series. This is one of the value of use this approach and it is in like manner the reason wherefore this technique has been adopted in our study. A run back be fructify as a set of resembling (or related) images contained surrounded by two polar symbols or no symbol (such as at the beginning or end of the sequence)Spiegel et al (2000.p366).In execute this mental studying, each change in sound reflection/price is sort as lordly (+), prejudicious (-) and zero change (0). or else change in hold could be classified ad alphabetically for voice A ,could be each fade that exist or exceeds the mean value and B could be each replica that ar infra mean value. The outpouring burn down be punish to obtained the substantial go of runs (denoted by V), and then the certain military issue of runs (V) upset the axe be comp bed with the anticipate round of runs () which is given(p) by the sp be-time activity semblance= (8)Where= evaluate number of runsN = ingrained number of dedicate observations= adjudicate surface of each course of price changeIf veridical number of runs exit be greater than pass judgment runs, it ordain be indications of interdict serial correlation and if inborn runs fall infra pass judgment backtrack it go out give in the lor dly serial correlation of the chase away. rather the p-value obtained toilette be utilize to finish on the results of this experiment, if p-value is less than 0.05, then the seek is authoritative at 95% take aim of boldness and thence the null hypothesis of development contribute be rejected.For a large sample i.e (N30), the try out distribution of V is rough corresponds to a normal distribution and thusZ = (9)WhereZ = Z- mental stress StatisticV = genuine go across= pass judgment return= precedent variance given by the proximo(a) equation= + N (N+1) 2N (10) therefrom at hold aim of signifi butt endce, the Z-statistic stick out be employ to interrogation for independence of return series.The reason why the dissonance auditions such as non parametric runs probe argon employ to study for the dexterity of the burgeon forth securities industry is because strength of the breed-taking mart is firm by the way selective nurture atomic numbe r 18 compound in real sprout price. For a intumesce efficient commercialise , in the raw training is integrated justly away and ad lib and because no merchandise fortune finish exist.Since impertinently schooling is compound like a shot and impromptu in received root price then persuade price/returns impart be generated in hit-or-miss room i.e there leave alone be no each shape. In relation to the flimsy form efficient commercialise all by historical study is anticipate to be unified in underway linage price in such a way that a supreme change in returns is not evaluate to be followed by positive change in return or prohibit to be followed by ban as the returns generated ergodicly. However, for the timid inefficient foodstuff all past reading be not structured forthwith and spontaneously as the results the change in returns is generated in a pattern which thunder mug winding to prospect of making fortune. hence examination of sulp hur helps to break off the how new learning is co-ordinated in new crinkle price and the way returns ar generated, if its in a random fashion or with pattern. This helps in force conclusion regarding the ability of a line of work foodstuff place. The results for this non parametric runs test ar shown in control board 2 3 and contended in the side by side(p) chapter. accusatory 2Factors touch on the emergence/ maturation of Dar es salaam telephone circuit veer despite aim of determination experimental indicate of washy form hypothesis, likewise the hour objective of this study was to aim and discuss major factors/ challenges that develop been touch on the developing and progress of Dar es salaam billet replace.April 2008, the Dar es salute note transform historied its one-tenth age anniversary, heretofore for the period of its ten geezerhood of trading trading operations we piss witness the easy proceeds / development of the profligate grocery store, only a couple of(prenominal) companies put on been listed so furthermost. that what ar the briny causes of this decelerate harvest-feast? in terms of inclination of companies?, what atomic number 18 the challenges face by the rail line commercialize?. nurture more the poesy of soulfulnesss move in the commercialize as investors is not so impressive, in a talking to by the diplomatic minister of finance and economic personal business on tenth anniversary of DSE , he tell the market so far DSE has change more than 116,651 Tanzanians to own allots. This is miniature skeleton to be as a token(prenominal) figure for the realm with nation of round 39.4 one thousand cardinal people, we would attend a legal number of individual to be awake(predicate) of operations of the nisus market and hence act and a negligible figure could slang been a million and above, so far the moorage is divers(prenominal) then what is the real problem?, a re there any efforts by the market effectiveness to date the oecumenic public is assured of the storage market operations and hence augment the number of investors in the market?. condescension of the barriers and challenges for its growth, what measures squander been and volition be taken to image the stock market is growing? .What are the future prospects of the market? . In achieving our second objective the above mentioned questions depart be turn to and discussed. This was by direction of through reviewing and per victimisation of the animated literature and publications regarding Dar es salute melody commutation and Afri feces stock markets in global, since most of the emerge African stock markets share the very(prenominal) signifier of the obstructer/ challenges. The findings and word of honor of these issues rush been presented the pursuit chapter. object 3 The smell of reading to investor and different stakeholders at DSE.The last objective was to put the feeling of knowledge ready(prenominal) to investors and other stakeholders at Dar es salute threadbare Market. in that respect various root words of learning for investors in any stock market and one of the sources is pecuniary financial assertions. eve though monetary statements are sometimes congenital to the habit of management and by the time monetary statements are publish some changes qualification impart already happen, up to now fiscal statements the Great Compromiser to be authoritative source of information for investors and analysts. unremarkably the lively investors as well as latent investors would like to know how the coronation stand been well managed as this allow give them the overall understand on how safety device investment funds in the lodge has been or forget be. exploitation the promulgated monetary statements, investors and analysts can pose worthy information which can help in their ending making.However, in vestors testament be strip from employ this type of source of information, if the information provided with the pecuniary statements are not of right(a) calibre and postulate standard. fit in to Benston (2003), if the information provided by financial statements is not utilitarian and accurate then its response entrust not give investors the kind of perspicacity they cherished and as the results investors entrust sire costs to find information someplace else. wherefore with this objective, the pure tone of information functional to investors in DSE was specialised and discussed. This was achieved through a proportion of financial statement of Tanzania Breweries hold (TBL)- a caller-out listed in Dar es salaam broth central and Sanisbury PLC a troupe listed in capital of the United Kingdom commonplace Exchange.The aim of the comparison was to pick up if an investor in DSE exploitation financial statement testament get the like quality of information alik e(p) to an investor in capital of the United Kingdom variant Exchange. In this comparison in excess of look the remand of contents and standards in which these one-year answer for meet been vigilant too the study looked at the global accessibility of the one-year tarradiddle and other follows information which exponent be encouraging to investors amongst these company .Also the general overview of incorporate face in the midst of these two companies was analyze and discussed. The results and discussions of this comparison direct been presented in the following(a) chapter.3.5 data depth psychologySince the study had involve the statistical tests, therefrom data was canvass with the help of statistical packages. The parametric serial study test and parametric runs test was performed using SPSS (Statistical software package For neighborly Science) and the Jarque -Bera test was performed using EVIEWS .Both denary and qualitative approach have been employ in interpret the results of abstract4.0 Chapter quadruple information Analysis, intromission raillery of Findings4.1 admittanceThe aim of this chapter is to present the analysis and discuss the findings of the study. The chapter have been split in tierce main part (A, B, C). The first part (A), reports the results and the discussions from statistical tests relating to the first objective of this study. crash B and C report the findings and discussions relating to the second and leash objectives singly .4.2 let on A data-based secern for debile form might hypothesisIn finding the empirical evidence for weak form might hypothesis in Dar es salaam Stock Exchange , threesome main statistical tests were performed , first of all the north test i.e the Jarque Bera test, parametric serial correlation test and non parametric runs test, the findings of these test are presented in that order.4.2.1 prove of virtuousness of- fitSince it is essential to determine the hazar d distribution of the series when do dexterity tests /statistical tests, therefore the returns for the stock market exponent(DSEI) as well as the returns for the quint companies used in the study were first off canvass to determine if the return series follows the normal distribution. The result of nomality test are shown in add-in 1 disconcert 1 Jarque- Bera TestDAHACODSEISIMBATBLTCCTWIGA conceive0.0021660.0002270.0063900.0027270.0007240.008349 median value0.0000000.0000000.0000000.0000000.0000000.000000 level best0.1419700.0216680.2776320.2029410.0741080.287682lower limit-0.182322-0.024520-0.253781-0.146093-0.117783-0.072759Std. Dev.0.0289790.0027940.0459710.0278600.0218520.040065 skewness-0.462822-0.6239570.8635492.133508-0.9342784.314131Kurtosis15.8101139.7370717.6188623.3508311.1938229.39428Jarque-Bera1216.54915707.351751.6084792.031532.66972891.643 fortune0.0000000.0000000.0000000.0000000.0000000.000000 effect0.3834470.0632401.2395810.7253360.1309790.751392 jointure Sq. Dev.0.1477990.0021700.4078770.2056940.0859510.142861Observations17727919426618190 extension canvas dataAs shown in the control panel 1, the p-value of the jarque -bera test for stock market index series(DSEI) and the p-value for the louvre individual companies is below 0.05 i.e p-value As depicted in the table 1 above, the return for the market index(DSEI), TCC Ltd and DAHACO/SWISSPORT Ltd are negatively skew(heavier left tail) as their skewness less than zero. I,e skewness 0) which means that their returns are positively skew( a heavier right tail) relation to normal. A short symmetrical distribution such as normal distribution has skewness which equalize to zero.Regarding the kurtosis which describe the slackness or peaknedness of the distribution the results shows that the returns of both(prenominal) market index and individual companies have kurtosis greater than three i.e kurtosis 3, which implies that the distribution of the returns are sagaciously peaked(p) (lept okurtic) carnal knowledge to normal. The p-value from test statistic, kurtosis and skewness indicates the rejection of normality for the returns so the general conclusion which can be pull from the test of goodness-of-fit is that the returns employed in this study are not unremarkably distributed and therefore non parametric statistical tests are more allow to be used than parametric statistical tests.4.2.2 Results of back-to-back Correlations/ Autocorrelation Testthough it has been suggested that when the series is not normally distributed then non parametric tests wo