Bullish sentiment drives equity market higher

EQUITY market activity gathered further momentum in the week ending 15th August 2025, with strength reflected in turnover and in the broader indices.

Both the AllShare Index and the Tanzania Share Index closed higher, gaining +102.03 points and +289.86 points respectively, underscoring a continuation of bullish sentiment across the board.

Starting with equity turnover, the market registered a significant 48.6 per cent week-on-week increase, lifting total equity turnover to 36.894bn/- from the prior week’s 24.823bn/-.

Equally important, trading volumes surged by 46.8 per cent, with 21.6 million shares traded during the week.

This dual rise in turnover and volume suggests the rally not only being due to price appreciation but also due to rising trading activity and liquidity deepening. Yet, as has become increasingly characteristic of our market, the concentration of trading on a select few counters remains pronounced.

CRDB once again dominated market activity, accounting for 64.29 per cent of total weekly equity turnover (23.72bn/-) and topping the charts. CRDB’s dominance reflects the convergence of retail and institutional investors. Retail investors continue to display appetite for the counter, as evidenced by its 8,580 deals out of the 13,505 total deals in the exchange during the week (over half of all market trades during the week).

On the institutional side, block trades played a critical role as CRDB registered trades on the Pre-arranged Market Board, with blocks of 2.12 million shares on Tuesday, 1.97 million on Wednesday and 2.7 million on Thursday.

Following CRDB, TBL emerged as the second top mover, generating 8.674bn/- in turnover (23.51 per cent of total). Other notable participants included NMB (1.337bn/-), KCB (1.056bn/-) and TCCL (623.1m/-). Altogether, 21 counters registered activity during the week.

ALSO READ: DSE week ends with market cap growth

The top two counters alone accounted for 87.8 per cent of all turnover, while the top five captured more than 96 per cent, a persistent concentration risk to be mindful of. On the gainers side, bullishness was widespread, with 14 counters recording gains.

The strongest performers were MKCB (+37.04 per cent), DCB (+32.26 per cent), DSE (+29.63 per cent), MBP (+28.15 per cent) and AFRIPRISE (+25.00 per cent), with additional notable advances from TCCL (+14.14 per cent) and VODA (+4.31 per cent). The downside was more muted, with only four counters retreating: TBL (-9.29 per cent), NICO (-6.22 per cent), TPCC (-3.09 per cent) and TCC (-1.95 per cent).

MKCB stock has seen tremendous growth recently, following the release of its Q2 financials from which investor perception of the counter has been positively shaped. The results highlighted strides in profitability but also revealed areas of concern that investors are seemingly choosing to discount in favor of the broader growth story.

Salaries and benefits surged 77.83 per cent QoQ, reaching 2.87bn/- in Q2, likely reflecting a recalibration in compensation after years of restructuring the bank towards profitability.

The average salary per employee climbed 22.67 per cent YoY to 5.07m/- per month as of June 2025, pointing to rising labor costs. Other operating expenses also swelled 40.78 per cent YoY to 3.2bn/-, but this is to be expected due to the bank’s expanding operations.

Still, Net Interest Income recorded a healthy growth of 10.29 per cent QoQ, supported by 11.48 per cent rise in interest income (9.15bn/-) versus the 15.94 per cent increase in interest expenses (2.01bn/-).

The squeeze from higher deposit costs and lower lending rates mirrors broader industry dynamics, where competitive pressures are forcing banks to adjust lending margins even as deposit rates increase and lending rates drop. MKCB is currently trading at 2,220/- per share, valued above its book value per share of 2,016/51 and maintains a P/E ratio of around 4, not very far from CRDB’s P/E.

This suggests that while the bank’s share price may have run ahead in the short term, its medium-term trajectory remains supported by macroeconomic environment and the bank’s digital expansion strategies. Shifting to the fixed income market, Bank of Tanzania (BoT) held a Treasury Bills (T-Bills) auction on 13 August 2025.

The 364-day paper’s auction had an offered amount of 75bn/-, but investor demand soared, with 226.54bn/- tendered, an oversubscription of 151.54bn/- and BoT accepting only the exact offered amount, mirroring its approach in the recent T-Bond auction.

The weighted average yield continued its downward path, falling 93.26bps to 6.9156 per cent from 7.8482 per cent in the previous 365 days TBills auction.

The persistent decline across the yield curve reinforces the structural trend toward lower rates. From the 25-year T-Bond, where 1.2tri/- was tendered against an offer of 241bn/-, to the present T-Bills auctions, there seems to be an abundance of capital seeking deployment.

In the short term, this is likely to continue inflating asset prices across both equities and fixed income, sustaining momentum in the capital markets. In summary, the week’s data points continued to affirm the overall trajectory of falling yields, anchored by BoT’s guidance.

Furthermore, liquidity is fuelling flows into capital markets, though concentration risk remains, with CRDB and TBL dominating activity, even as other counters could offer viable opportunities for investors.