DAR ES SALAAM: THE Dar es Salaam Stock Exchange (DSE) experienced a softer trading week ending October 16 this year, with activity retreating across the major market indicators. Total turnover declined by 28.16 per cent to 12.94bn/-, from 18.02bn/- recorded in the preceding week.
The decline in turnover was accompanied by a 25.36 per cent reduction in share volume, which fell from 7.10 million shares to 5.30 million shares, indicating a broad moderation in trading activity rather than a decline driven solely by a few large transactions.
Trading activity remained highly concentrated among the leading banking counters.
CRDB Bank dominated the market, accounting for 65.18 per cent of total turnover, equivalent to approximately 8.44bn/-, while NMB Bank contributed a further 26.03 per cent, with turnover of 3.37bn/-.
KCB, NICO and VODA followed with smaller contributions of 1.70 per cent, 1.61 per cent and 1.43 per cent, respectively.
Despite the decline in overall market activity, selected counters posted notable price gains during the week. MUCOBA led the gainers, rising 7.79 per cent to 415/-, followed by TCCL, which advanced 5.26 per cent to 4,000/- .
KA and PAL each gained 4.35 per cent, closing at 120/- and 300/-, respectively, while TPCC increased by 2.65 per cent to 5,820/-.
The performance of these counters indicates that there was still selective buying interest in specific stocks even as aggregate market turnover weakened.
On the downside, selling pressure was more pronounced among several counters. JATU recorded the largest decline, falling 14.81 per cent to 230/-, followed by TOL, which lost 8.70 per cent to 1,680/-. NMG declined 6.15 per cent to 305/-, while DSE and TPCC recorded declines of 5.04 per cent and 3.74 per cent, respectively.
The contrasting movement between gainers and losers points to a market characterised by stock-specific positioning rather than a uniform directional trend.
Market capitalisation also softened during the week. Total market capitalisation declined by 0.54 per cent to 39.86tri/-, from 40.08tri/-, while domestic market capitalisation fell by 0.62 per cent to 27.40tri/-.
The relatively modest decline in market capitalisation compared with the sharper contraction in turnover suggests that the weaker trading activity did not translate into a broad-based erosion of equity valuations.
The ETF market, however, moved in the opposite direction, with market capitalisation increasing by 3.81 per cent to 247.71bn/-, indicating continued resilience in this segment.
HESLB mulls capital markets option to finance student loans
The Higher Education Students’ Loans Board (HESLB) is exploring the possibility of raising funds through Tanzania’s capital markets, including issuing a bond, as part of efforts to diversify its funding sources and meet the growing demand for student loans.
According to the article, the proposed approach would reduce reliance on government funding and loan repayments while providing an additional channel for financing higher education.
HESLB Executive Director, Dr Bill Kiwia, noted that the board has begun the process of exploring a bond issuance, although the process could take two to three years due to legal, regulatory and approval requirements.
The initiative comes as demand for student financing continues to grow. For the 2026/2027 academic year, HESLB has allocated 1.06tri/- to finance at least 300,000 students, compared with 916.7bn/- allocated in the previous academic year.
This represents an increase of approximately 15.6 per cent, reflecting the rising need for higher education financing.
Meanwhile, the Board continues to strengthen loan recovery to maintain a sustainable revolving fund, with annual recoveries increasing from approximately 28bn/- to 235bn/-, equivalent to about 70 per cent of its annual repayment target.
Impact:
HESLB’s potential bond issuance could introduce a new investment opportunity for investors seeking fixed-income securities while broadening Tanzania’s corporate debt market.
It could also demonstrate how public institutions can use capital markets to mobilise long-term financing for social and economic development.
However, the actual investment opportunity will depend on the bond’s eventual terms, including its coupon rate, maturity, credit risk and regulatory approvals.
12.75 per cent -25-year Treasury bond no: 722
On Thursday 15th October this year, Central Bank was in the market offering 289.930bn/- to investors for the re-opening of the 25-Year Treasury bond offering 12.75 per cent coupon rate annually.
The auction was subscribed to 744.93 per cent, the auction received bids totaling 2.16tri/- and accepted bids worth 289.930bn/-.
Investor demand was exceptionally strong, with total bids exceeding 2.159tri/-, equivalent to a subscription rate of 744.93 per cent.
Notably, this represents the highest tendered amount in the history of government bond issuances in Tanzania, underscoring the substantial liquidity in the market and the strong investor appetite for long-term government securities.
The bond’s minimum successful price increased to 115.5000 from 113.7770 in the August auction, indicating stronger pricing in the current issuance.
Meanwhile, the weighted average yield declined by 63.77 basis points, falling from 11.4799 per cent in the previous auction to 10.8422 per cent in the current auction. The Bank of Tanzania accepted only a portion of the bids received.
The reported acceptance rate was 19.73 per cent, although the total amount allotted exceeded the initial offer of 289.930bn/- by accepting 426.081bn/-.
This suggests that the Bank accepted bids beyond its initial target while remaining selective in its allocation decisions.
A significant number of bids were unsuccessful, reportedly because their submitted prices fell below the Bank’s cutoff price.
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Secondary market activity
Secondary fixed-income market activity on the Dar es Salaam Stock Exchange expanded during the week ended 16th October this year, recording a total turnover of 132.56bn/- across 66 deals.
When compared to the preceding week’s turnover of 113.30bn/- across 123 deals, total traded value grew by 17.00 per cent, even as aggregate deal count fell by 46.34 per cent.
This divergence indicates an institutional rotation toward fewer, significantly larger block transactions, with average transaction size climbing from 0.92bn/- to 2.01bn/-.
Equities
We expect the equity market to stay cautious and selective in the coming weeks. Last week’s 28.16 per cent drop in turnover and 25.36 per cent drop in volume points to investors waiting on the sidelines rather than pulling out of the market.
Market capitalisation fell only 0.54 per cent, which supports that view. Trading will probably stay concentrated in the large banking counters.
CRDB and NMB together made up 91.21 per cent of last week’s turnover, so where the market goes in the short term depends heavily on how these two counters trade.
The Banks, Finance & Investment Index fell 1.62 per cent for the week, and further profit-taking in this sector could keep the headline DSEI and TSI under mild pressure.
That said, interim results due over the coming weeks could revive interest in the banking counters, especially from investors looking at dividends.
Foreign investor flows are a key risk to watch. Net foreign outflow widened to 3.72bn/- from 3.13bn/- the previous week.
If foreign selling continues and local demand doesn’t absorb it, prices of the most liquid counters could come under pressure.
On a positive note, ETF market capitalisation rose 3.81 per cent to 247.71bn/-. This suggests continued appetite for diversified, lower-cost products and we expect this segment to keep drawing interest, particularly from retail investors.
Fixed income
We expect fixed-income demand to stay strong. Liquidity in the market is ample, as shown by the record 2.16tri/- tendered for the 25-year bond 722, a subscription rate of 744.93 per cent.
Weighted average yields on the 25-year tenor have now fallen in each of the last four auctions, from 11.99 per cent in February to 10.84 per cent in October.
If the Bank of Tanzania keeps accepting bids selectively at higher cut-off prices, yields in upcoming primary auctions could ease further.
Investors who still hold higher-coupon paper may therefore find it worth keeping. In the secondary market, trading has shifted towards fewer, larger institutional deals.
The average deal size rose to 2.01bn/-, and bond 696 alone accounted for 104.97bn/-, about 79 per cent of total traded value.
Bids that missed out in the primary auction may move into the secondary market, which could support prices of long-dated bonds in the near term.
Corporate bonds outstanding rose 19.49 per cent to 613.15bn/-. Together with HESLB’s plans to issue a bond, this points to steady growth in non-government debt.
However, investors should look carefully at credit quality, liquidity and pricing on each issue, the TCB bond, for example, traded at 92.50 to yield 18.21 per cent.
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