Investor activity surges across 20 counters

THE Tanzanian capital markets experienced a significant intensification of activity this week, signalling a robust return of investor engagement. Total equity turnover surged to 12.95bn/- from a volume of 10,524,915 shares traded, marking a material expansion from the preceding week.

Critically, the market’s depth was evidenced by heightened activity across a broad spectrum of 20 counters, a departure from recent concentration and an encouraging indicator of improving market health and widespread capital allocation. The flow of capital was heavily concentrated in the banking stocks.

CRDB Bank Plc firmly anchored the market, commanding a turnover of 6.77bn/-. This figure, representing a dominant 52.27 per cent of the week’s total equity turnover, underscores sustained institutional and retail confidence in the counter’s fundamental growth trajectory.

Following this lead, TBL Plc and NMB Bank Plc solidified the top-tier movers, posting turnovers of 3.4bn/- (26.26 per cent) and 1.3bn/- (10.14 per cent) respectively. The collective dominance of these three counters highlights a prevailing investment thesis centred on established, high-liquidity names, even as participation broadens.

The week’s trading narrative was characterised by starkly divergent performances, illustrating a market increasingly focused on specific catalysts and fundamental value.

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On the gainers’ side, Mkombozi Commercial Bank (MKCB) led the ascent, with its share price appreciating by a notable 7.45 per cent to close at 1,010/-.

This rally is a direct investor response to the bank’s attractive dividend yield proposition, a powerful magnet for capital in the current macroeconomic environment. Concurrently, the crosslisted Kenya Airways counter registered a 5.56 per cent gain to 95/-, a rally fuelled by its reinitiation for trading on its home bourse, which unlocked pent-up demand.

A cohort of other counters, including NICO (+5.49 per cent), TOL (+2.74 per cent), TCCL (+2.20 per cent), MBP (+2.08 per cent) and SWISS (+1.97 per cent), also saw positive price action, suggesting a broader, albeit selective, risk-on sentiment.

Conversely, the losers’ bracket was headlined by a significant market repricing in Vodacom Tanzania (VODA), which saw its stock decline by 20 per cent to close at 520/-, despite healthy trading activity. This sharp adjustment suggests a surprising positive impact on the exchange’s liquidity, post its recent amendment or DSE Trading rules and regulation.

The share price drop also signals the market participants’ valuation for the tele-communications giant. Similarly, the Dar es Salaam Stock Exchange (DSE) counter continued its descent, closing at 2,800/-. The market appears to be discounting the company’s forward-looking dividend of 125/50, potentially pricing in concerns over future earnings volatility or cyclical market headwinds.

Of particular analytical interest is the price trajectory of Tanzania Portland Cement Company (TPCC). Despite an upward revision of its dividend to 600/- per share, the counter’s price has continued to decline post-ex-dividend date, closing at 4,700/-. This presents a compelling case of potential value dislocation.

TPCC’s extensive track record, management’s proven execution capability through various economic cycles and its history of maintaining stable dividend plateaus suggest the new 600/- per share figure could establish a new floor for future payouts.

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Our analysis of historical price action on dividend-paying blue-chips reveals a recurring pattern: stocks often rally predividend until the forward dividend yield converges within a 6 per cent to 10 per cent range a level the market seemingly deems an equilibrium point for risk-adjusted returns.

The recent price action in CRDB, NMB and MKCB corroborates this model. Given this framework and the fundamental soundness of its business, TPCC’s current valuation may represent a strategic entry point for long-term investors positioned to capitalise on this apparent market inefficiency. In the fixed income segment, activity on the secondary market remained robust, with the total face value of bonds traded reaching 245.78bn/-.

This heightened velocity is a direct consequence of the heavily oversubscribed 25-year government bond auction held on June 4th, 2025, which left significant undeployed capital seeking returns. While government securities predictably dominated, the corporate bond market showed encouraging participation from NMB, Azania Bank and CRDB Bank bonds, a vital sign of a maturing and diversifying credit market.

The most traded instrument by number of deals was the newly issued 25-year bond (No. 666), which saw 51.12bn/- in face value traded. Its average traded price of 111.69 per cent held proximate to the primary auction’s weighted average price, indicating the market is in a temporary equilibrium, likely awaiting further policy and supply signals.

The most traded paper by face value was the 10-year bond (11.44 per cent coupon), with 77.33bn/- traded, demonstrating persistent demand for mediumduration assets. The market is now positioned for the upcoming 20-year Treasury bond auction scheduled for this Wednesday.

The previous 25-year auction saw tendered funds of 568.5bn/- against a taken amount of only 80bn/-, creating a substantial pool of undeployed capital (488.5bn/-). It is my baseline expectation that a significant portion of these unsuccessful bids will be rechanneled into the 20-year auction.

This influx of demand is poised to exert further downward pressure on yields, a trend that aligns with what appears to be the Bank of Tanzania’s strategic push to foster a lower-cost borrowing environment and stimulate broader economic investment.

The outcome of this auction will serve as a critical data point, revealing the market’s true appetite for duration risk and the central bank’s conviction in its policy path.