Trading cools as yields compress in Dar market

FOR the week ending October 17, 2025, the Dar es Salaam Stock Exchange (DSE) reflected a softening of trading intensity after weeks of elevated momentum. Total equity turnover fell 21.7 per cent to 12.27bn/- , with 8.52 million shares traded versus 14.18 million the week before.

The moderation was driven almost entirely by reduced activity in CRDB Bank, whose turnover declined to 7.77bn/- from 13.34bn/- the previous week.

However, beneath that overview observation, equity turnover outside CRDB expanded. Outside CRDB, aggregate equity turnover nearly doubled to 4.5bn/- from 2.3bn/-, signalling broader investor participation even as leadership remained narrow. Banking counters continue to dominate.

CRDB (63.3 per cent of turnover), TCC (16.6 per cent) and NMB (6.4 per cent) formed the core of trading activity, joined by TBL and Afriprise, bringing the top-five concentration to 95.4 per cent of weekly turnover. Afriprise drew additional attention following its announcement of an upcoming Annual General Meeting (AGM) scheduled for November 15, 2025, to be held virtually.

Key agenda items include the approval of 2024 dividends, board remuneration for 2025 and a proposal to issue non-voting redeemable cumulative preference shares, a move that could expand its capital base and provide a more flexible funding structure.

The week’s price action was uneven reflected a mixture of profit taking and speculative rotation. Precision Air (PAL) led the gainers, surging 20 per cent on thin volumes, likely driven more by sentiment than fundamentals, given its modest weekly turnover of 4.84m/-.

Tanzania Tea Packers (TTP) followed closely, gaining 19.70 per cent, also on light volume. Other gainers included MKCB (+13.74 per cent), DCB (+5.56 per cent) and DSE (+3.28 per cent). By contrast, CRDB retraced 9.4 per cent after its double-digit rise the week before, as investors locked in gains ahead of its third-quarter earnings release.

NICO (-6.08 per cent), Vodacom (-2.52 per cent), Afriprise (-2.08 per cent) and TCC (-1.98 per cent) also registered mild declines. A notable transaction emerged in TCC, where a block trade of 304,401 shares at 6,600/- changed hands. Analysts still view TCC’s fundamentals as intact, though near-term price consolidation toward 6,900/- remains probable.

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On the fixed-income front, the Bank of Tanzania (BoT) conducted a 2-year Treasury bond auction on October 15, 2025, offering 107.27bn/- via the competitive window and 11.92bn/- through the noncompetitive window. Investors tendered a total of 126.81bn/- competitively and 82m/-non-competitively, implying oversubscription in the former and undersubscription in the latter.

Ultimately, the BoT accepted 107.11bn/- in competitive bids and 82m/- non-competitive, falling short of the target, possibly hinting at a subtle pushback on yield levels. The weighted average yield to maturity (YTM) settled at 10.0481 per cent, a pronounced drop from the 12.1695 per cent recorded in the previous 2-year auction, which carried a 12 per cent coupon.

This outcome underscores the continuing compression of yields in Tanzania’s fixed income market, even amid occasional investor resistance. Despite this resistance, liquidity in markets is ample, inflation subdued and funding costs across the curve continue to decline.

The BoT’s monetary policy framework has successfully aligned short-term liquidity conditions with its mediumterm inflation and exchange rate objectives.

Recent macro data reinforce the credibility of this monetary stance. Inflation averaged 3.3 per cent through the first ten months of 2025, well within target, while GDP growth is on track for 6 per cent supported by robust construction activity, financial intermediation and a strong tourism recovery.

On the external front, the current account deficit has narrowed sharply to 2.4 per cent of GDP as of September 2025, while the shilling has appreciated by 8.8 per cent year-to-date, buoyed by foreign exchange inflows from cash crops, gold exports and seasonal tourism receipts.

Foreign reserves climbed to 6.7 billion US dollars, equivalent to 5.4 months of import cover, comfortably above the EAC benchmark of 4.5 months. Liquidity management operations have been instrumental in maintaining this equilibrium.

The BoT has relied on reverse repos for injection and repos for sterilisation, adopting an approach that ensures banks obtain desired liquidity at the policy rate.

Taken together, the country’s financial landscape remains in a phase with abundant liquidity and yields trending lower.

For fixed-income investors, the challenge is no longer credit risk but reinvestment risk as the difficulty of securing satisfactory returns as yields compress further starting to be a real concern for ordinary long term fixed income investors.

For equity investors, the environment is constructive as lower discount rates and a rising money supply amid stable macro conditions support higher valuations.

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As the nation enters a defining period, the election season, we will be watching developments closely. Historically, politics and capital markets could move in tandem during such times, with heightened uncertainty likely to influence investor sentiment, liquidity flows and foreign investor participation, occasionally spilling over into short-term market volatility.

While this may cause temporary disruptions, it is unlikely to alter the longterm trajectory of well-positioned businesses or the structural progress underpinning Tanzania’s economic growth.