Tanzania’s Capital Markets: A Data Driven Analysis of Recent Trends and Macroeconomic Indicators.

As we step into 2025, Tanzania’s Capital markets have displayed remarkable growth, reflecting the country’s stable macroeconomic environment. A closer look at the data reveals key trends in equity and bonds markets, investor behavior, and broader economic indicators, offering a comprehensive picture of the current landscape.

?Equity Market Dynamics:

Between January and September 2024, the Tanzania stock market saw a significant rise in the total market capitalization, increasing from TZS 14.61 Trillion to TZS 17.77 Trillion, marking a 22% growth.

This surge speaks volumes about the growing investor confidence in the Tanzania economy, fueled by strong performances in key sectors. Domestic capitalization also rose 7% reaching TZS 12.18 Trillion by September.

Key stock indices mirrored this growth. The Dar es Salaam Stock Exchange Index (DSEI) increased by 22% reaching 2,129.03 points, while the Tanzania Share Index (TSI) rose by 7%.

This uptick highlights the expansion of domestic market activity. However, the Industrial and Allied Index (IA) dipped slightly by 2% signaling some mixed results within the industrial sector. On the other hand, the Banking and Investment Index (BI) surged by 25%, reflecting solid performance in the financial sector.

?Sector-Specific Stock Performance

Several companies have experience significant movements in stock prices. CRDB? Bank, for example, saw its stock price jump by 39% rising from 460 TZS in January to 640TZS in September 2024.

This growth reflects the banks strong financial performance and the growing demand for its shares. Similarly, East African Breweries Limited (EABL) recorded an 82.9% price increase, with its stock price increase, with its stock price soaring from 1,820 TZS to 3,300 TZS which signals robust investor interest.

Other notable performers include Jubilee Holding Limited (JHL) , which saw a 22.64% increase in its stock price, rising from 2,960 TZS to 3,630 TZS and KCB Bank, whose stock price surged by 108.57% , from 350 TZS in January to 730 TZS by September. This remarkable growth reflects the bank’s strong regional presence and solid financial results.

However, some companies have faced challenges. Swissport Tanzania (SWISS) saw its stock price fall by 16.67% from 1,320 TZS to 1,100 TZS likely due to heightened competition in the aviation sector. Similarly, Tanzania Portland Cement Company (TPCC) experienced a decline of 11.93%, primarily due to competitive pressures and higher operational costs. Other companies, such as Maendeleo Bank (MKC) and Tanga Cement (TTP) also recorded moderate declines, suggesting some challenges in the industrial and manufacturing sectors.

?Bond Market Development

The Bond Market has also seen significant activity. By September 2024, outstanding government bonds increased by 18%, rising from TZS 20.24 Trillion to TZS 23.97 Trillion. This growth indicates that the government has been actively borrowing to finance key infrastructure and development projects, while also providing investors with stable, fixed-income investment opportunities. Interestingly, the outstanding sustainable bonds remained stable at TZS 459.04 Billion, suggesting room for growth in this segment

?Trading Activity Trends

Trading activity on the Dar es Salaam Stock Exchange (DSE) displayed a noticeable trend in 2024. In the fist quarter, stock turnover reached TZS 54.36 Billion, but it fell to TZS 38.85 Billion in Q2 and further declined to TZS 30.07 Billion in Q3. Similarly, stock volumes traded dropped significantly from 77.3 Million shares in Q1 to 37.5 Million in Q3. This sharp decrease in trading volume could reflect reduced liquidity or lower investor engagement in the latter part of this year, possibly in response to broader economic uncertainties.

Macroeconomic Indicators

Tanzania macroeconomic landscape has remained relatively stable, contributing to the positive performance of the capital markets. The Bank of Tanzania kept its key interest rates at 6% throughout Tanzania, citing strong economic growth, low inflation and easing exchanging rate pressures.

Consumer’s inflation stayed below the bank’s target of 5%, coming in at 3.1% YoY in August.

Our economy has experienced steady growth with GDP estimates of 5.0% and 5.4% for the fist and second quarters of 2024, respectively. Meanwhile the current account deficit narrowed to $959 Million, thanks to increased export earnings form Gold, agricultural products and tourism. Foreign exchange reserves remained robust exceeding $5 Billion, which is sufficient to cover over four months of import.

?Investor Insights.

The banking and financial sectors have been key drivers of market performance. The Banking and Investment Index (BI) experienced significant growth, driven by solid performance from major players such as NMB and CRDB. The resilience of financial sector highlights its ability to weather economic uncertainties, offering attractive opportunities for investors, particularly as the sector continues to expand its digital services.

In contrast, the industrial sector faced mixed results, with companies like Tanga Cement and Tanzania Portland Cement seeding declines. This suggests that while the sector remains crucial to Tanzania’s economy, it may face pressures from rising production costs and competitive forces.

This suggests that diversification and adaptation will be key for sustained market performance. As we move further into 2025, the continued development of Tanzania’s Capital Markets will depend on maintaining this balance between growth and resilience.

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