Historic dividend declarations fuel market rally at the DSE

A SURGE of dividend declarations has booster investor appetite and participation in the Dar es Salaam Stock Exchange (DSE), driving weekly turnover to a record 37.98bn/- for the week ending May 23rd, a remarkable 765 per cent increase from the previous week’s 4.39bn/-.

This marks the highest weekly turnover recorded so far in 2025 and cements a renewed bullish sentiment in the local equity market.

Dividends Steal the Spotlight

The primary catalyst? A wave of generous and in some cases, historic, dividend announcements by several listed companies. Leading the charge is Tanzania Cigarette Company (TCC) at 850/-, the highest in its payout history followed closely by Tanzania Breweries Limited (TBL) with a hefty 818/- per share final dividend.

The anticipation of these payouts has triggered significant pre-arranged block deals, with TCC and TBL contributing a combined 35.2bn/- in turnover last week—18bn/- and 17.2bn/-, respectively. The banking sector is also making waves.

NMB Bank declared a dividend of 428/85 per share payable on June 19th, while CRDB Bank followed with 65/- per share payable on June 2nd.

These announcements continue a five-year upward dividend trend for both banks, which have consistently grown their payout ratios since 2017.

Elsewhere, Twiga Cement (TPCC) delighted shareholders with a jumbo 600/- per share dividend—a historical high for the cement giant, reinforcing its strong earnings performance. But the biggest surprise came from Mkombozi Commercial Bank (MKCB), which declared a dividend of 92/40 per share for the first time since 2017.

The market responded enthusiastically, sending MKCB’s share price surging by 18.64 per cent to 700/-. This shows that investors are not just rewarding consistency, but also celebrating comebacks. The dividend wave has pushed domestic market capitalisation up 8.5 per cent to 13.23tri/-, adding over 1.036tri/- from the start of the year. Notable price gainers within the week:

• DSE Plc: up 14.29 per cent to 3,200/-
• Maendeleo Bank (MBP): up 9.09 per cent to 480/-
• Swissport (SWISS): up 3.95 per cent to 1,580/-.

Bond Market: Long-Term Appetite at Record Highs

Beyond equities, the fixed income market is also seeing an inflection point. Investor appetite for long-dated securities is reaching historic highs, particularly in the 20-year and 25-year bonds.

These figures signal a dramatic surge in demand, with bids for both auctions surpassing 750bn/-, a historical high for both tenures, indicating growing confidence in the long-term macroeconomic stability of Tanzania and the attractiveness of fixed returns amid moderate inflation of 3.2 per cent in April.

The central bank has become increasingly selective, accepting smaller portions of the tendered amounts. This strategy lowering the acceptance ratio leaves considerable liquidity in the market, which could eventually circle back into equities or short-term debt instruments.

Reopening of 5-Year Bond Draws Strong Interest

In line with this trend, the central also reopened the 5-year Treasury bond on May 21st, offering a 13 per cent coupon, up from 9.18 per cent previously. The auction was oversubscribed by 154.83 per cent, receiving 114.37bn/- in bids, with 44.16bn/- accepted. The minimum successful price rose sharply to 102/1626 and the weighted average yield dipped slightly to 12.9424 per cent, down from 13.1445 per cent in March.

What Lies Ahead?

Dividend season has temporarily shifted market sentiment into bullish territory, offering investors an opportunity to lock in returns. Meanwhile, the surge in long-dated bond subscriptions signals confidence in the broader fiscal environment.

The near-term outlook is dependent on corporate earnings sustainability, fiscal policy direction and monetary tightening dynamics. If liquidity remains ample and dividend momentum continues, equities could see extended strength.

Fixed income markets, meanwhile, may attract deeper institutional flows if coupon rates remain elevated relative to inflation.