DSE turnover rises as banking stocks dominate

DAR ES SALAAM: THE Dar es Salaam Stock Exchange (DSE) closed the week ended October 2 this year with a marginal improvement in trading activity, as total turnover increased by 1.47 per cent to 27.87bn/, from 27.47bn/- recorded in the preceding week.

Despite the increase in turnover, the market recorded a decline in the volume of shares traded, which fell by 8.68 per cent to 11.67 million shares from 12.78 million shares.

This suggests that the improvement in turnover was largely driven by trading in relatively higherpriced counters rather than an expansion in overall share volumes.

Net foreign outflow stood at 1.36bn/-, compared with an outflow of 4.63bn/- in the previous week, representing a 70.65 per cent reduction in net outflows.

CRDB was the dominant contributor to market turnover, accounting for 56.69 per cent of total activity with turnover of approximately 15.80bn/-. NMB followed with a 27.55 per cent contribution and turnover of 7.68bn/-, while TCC accounted for 6.75 per cent with 1.88bn/-.

VODA and TCCL contributed 1.70 per cent and 1.41 per cent, respectively. The combined contribution of CRDB and NMB reached 84.24 per cent of total market turnover. The market’s performance across individual counters was mixed.

NMG emerged as the strongest gainer, rising 8.62 per cent to 315/-, followed by NICO, which gained 4.43 per cent to 3,770/-. TCCL advanced 3.67 per cent to 3,950/-, while the DSE share increased by 2.42 per cent to 6,350/-. TTP rounded off the top five gainers, appreciating by 1.18 per cent to 430/-.

The gains were relatively broad across selected counters, although they were not sufficient to offset declines in several heavily weighted stocks.

On the downside, MBP recorded the largest decline among the leading losers, falling 7.44 per cent to 1,990/-.

DCB declined 4.76 per cent to 400/-, while AFRIPRISE shed 4.49 per cent to 745/-. TOL and NMB declined by 4.42 per cent and 4.23 per cent, respectively.

The decline in NMB is particularly noteworthy given the counter’s substantial contribution to weekly turnover, indicating that significant trading activity was accompanied by downward price movement. At the broader market level, total market capitalisation declined by 1.08 per cent to 40.38tri/-, from 40.82tri/- in the previous week.

Domestic market capitalisation also fell by 1.57 per cent to 27.88tri/-, compared with 28.33tri/- previously. I&M Bank (T) Limited Hatua Bond receives 806.92 per cent subscription rate The public offer for the bond which ran from August 3 to September 4, this year, targeted an initial raise of 20bn/- but drew bids totalling 161.38bn/-.

Following regulatory clearance, the lender exercised its green-shoe option to absorb 100bn/-, the full cap allowed under the entire medium-term programme, while returning the remaining 61.38bn/- to oversubscribed applicants via direct bank transfers beginning September 28, this year.

Under the allotment policy, bids up to 200m/- received full allocation, while subscriptions above that threshold were allocated at 40 per cent.

Hatua Bond carries an annual coupon rate of 13 per cent payable quarterly, maturing on September 21, 2031. The bond is scheduled to list on the Dar es Salaam Stock Exchange (DSE) on Thursday, October 15, this year.

NICOL to issue dividend of 90/- per share following 12th AGM approval

National Investments PLC (NICOL) has resolved to pay a dividend of 90/- per share for the financial year ended December 31, 2025, subject to formal shareholder ratification at its 12th Annual General Meeting (AGM).

The announcement was presented to investors during the hybrid meeting held on Saturday, September 5, this year, at Rock City Mall in Mwanza City alongside virtual channels.

The recommended payout reflects the company’s performance over FY 2025, during which shareholders also reviewed and adopted the audited financial statements and Directors’ Report.

In addition to the dividend declaration, the AGM concluded routine corporate actions including the approval of directors’ remuneration, appointment and resignation of board members, and the endorsement of external auditors for the 2026 financial year.

On Wednesday 30th September this year, the Central Bank was in the market offering 186.540bn/- to investors for the auction of the re-opening of the 15-Year Treasury bond offering a 12.25 per cent coupon rate annually.

The auction was oversubscribed, receiving 264.91 per cent subscription, the auction received bids totalling 494.160bn/- and accepted bids worth 186.540bn/.

This auction marked the second re-opening of the 15-year Treasury Bond No 696, which continued to attract strong investor demand, recording a subscription rate of 264.91 per cent.

Although the subscription level remained strong, it was lower than that recorded during the bond’s original issuance and first re-opening auction.

The amount offered increased from 165.820bn/- to 186.540bn/-, reflecting a higher issuance target in the current auction.

Despite the strong oversubscription, the Bank of Tanzania allotted exactly the amount offered, maintaining its targeted allocation approach.

The bond’s minimum successful price increased notably, rising from 109.2189 in the previous auction to 111.1079 in the current auction.

This represented an improvement in pricing compared with both the previous re-opening and the bond’s original issuance.

Meanwhile, the weighted average yield (WAY) increased by 23.92 basis points, rising from 10.5515 per cent in August to 10.7907 per cent in the current auction.

The increase in yield, despite the higher minimum successful price, indicates some upward pressure on required returns at the long end of the government securities market.

ALSO READ: DSE stock trading cools as investors rush to govt bonds

Secondary market activities

Secondary market bond turnover on the Dar es Salaam Stock Exchange retreated during the trading week ended October 2 this year, recording a total traded value of 82.68bn/- executed across 78 deals.

When compared against the preceding trading week’s turnover of 118.61bn/- across 129 deals, aggregate turnover contracted by 30.29 per cent, while transaction deal count dropped by 39.53 per cent.

Trading activity remained overwhelmingly concentrated in sovereign Treasury bonds, which represented 99.93 per cent (82.63bn/-) of aggregate turnover, with institutional demand firmly anchored in the 20- year, 15-year and 10-year tenors.

Market outlook: Equities

We expect the equity market to stay cautious in the coming weeks. Trading will likely remain dominated by the two large banks.

CRDB and NMB together made up more than four-fifths of last week’s turnover, so they will keep setting the direction of the benchmark indices.

NMB’s drop came on heavy volume, which points to profittaking or repositioning rather than thin-market noise. Further softness in the Banks, Finance & Investment index is possible in the near term.

We still see room for selective buying at lower levels as investors position ahead of third-quarter bank results, which typically come out towards the end of October.

Strong earnings could bring buyers back to the banking counters and support a recovery in the DSEI and TSI.

Foreign investors were still net sellers last week, but they sold much less than in the previous week. If that continues, local selling will meet less pressure and prices should become more stable.

A move back to net foreign buying would be an early sign that sentiment is improving. Daily activity was strongest in mid-week and faded towards Friday.

This suggests investors are trading tactically rather than with strong conviction. Volumes also fell while turnover held steady, so activity is concentrated in a small number of higherpriced shares.

We therefore expect most counters to trade within a narrow range, with sharper moves limited to less liquid names. In smaller counters such as NMG, MBP and DCB, a few trades can move prices a lot.

Investors should treat big swings there carefully rather than as the start of a trend. Among non-bank stocks, NICO should continue to attract interest from income-focused investors because of the approved 90/- per share dividend.

The Industrial & Allied index was the only sector index that rose last week. Its stability gives some defensive support while the financials go through a correction.

Market outlook: Fixed income

Demand for government securities remains strong, but long-term investors are asking for higher returns. In the latest 15-year auction, bids still far exceeded the amount offered, though by less than in earlier rounds. Yields at the long end also rose.

Together, these suggest the long-end yield may hold around current levels or edge slightly higher in upcoming auctions. That would favour investors who are deploying new cash now.

The Bank of Tanzania is likely to keep accepting only what it offers, which limits how far yields can fall even when demand is strong.

Secondary bond trading slowed last week but is still driven by a few large trades in the 10-, 15- and 20-year government bonds.

We expect institutional investors to keep focusing on these maturities and to rebalance their holdings after the latest auction.

Turnover may rise again as investors use the money refunded from the oversubscribed Hatua issue.