Investors trading on the Dar es Salaam Stock Exchange recorded a capital gain of 3.7 trillion Tanzanian shillings (about $1.4 billion) over the 12 months ending in September, reflecting a nearly 18.9% increase in market value.
Investors trading on the Dar es Salaam Stock Exchange recorded a capital gain of 3.7 trillion Tanzanian shillings (about $1.4 billion) over the 12 months ending in September, reflecting a nearly 18.9% increase in market value.
This robust growth positions the equity segment as one of Tanzania’s most profitable investment avenues.
The latest market report shows that total market capitalisation climbed to 21.34 trillion Tanzanian shillings by the end of September from 17.64 trillion shillings a year earlier. This increase was primarily driven by sustained increases in the share prices of both local and foreign-listed companies.
Compared with fixed-income securities, such as government and corporate bonds — which typically yield less than 15% per annum — the equity market’s returns are significantly higher.
“Equities have experienced a very bullish run in 2025, driven largely by the new trading rules implemented in June. Several companies have posted year-to-date returns exceeding 100%,” said Raphael Masumbuko, a market analyst and chief executive of Zan Securities Limited.
“It is unprecedented to see more than five domestic counters achieve such gains within a single year, highlighting the strength of this rally. This bullish sentiment is also attracting investors who previously preferred traditional vehicles such as mutual funds and fixed deposits. Improved market liquidity is fueling demand for investment securities, creating a virtuous cycle of growth and participation.”
Masumbuko remains optimistic about the outlook, expecting 2025 to continue shaping up as a highly bullish year for equities.
Other analysts said the market’s gains were concentrated in a handful of liquid counters, particularly banking stocks, with smaller listings showing little movement or modest declines due to thin trading and lower investor attention.
Strong corporate earnings and better-than-expected quarterly results for banks and some blue-chip counters were cited as key drivers behind the upward momentum. Beyond capital gains, investors also benefit from annual dividends distributed by profitable listed companies, often on a bi-annual or annual basis.
Locally listed companies saw their market capitalisation grow to 13.5 trillion Tanzanian shillings by the end of September from 12.1 trillion shillings a year earlier.
The banking, finance and investment sectors — both locally listed and cross-listed — recorded the highest capital gains, with the sector index rising to 9 245.90 points from 5 674.20 points.
Geofrey Kamugisha, another market analyst, said a 19.8% year-to-date increase in total market capitalisation is a very significant outcome for Tanzania’s equity market.
“It shows that equities have substantially outperformed most other domestic investment options this year,” he said.
Kamugisha explained that bank deposits are yielding only modest returns, citing the Bank of Tanzania’s monthly economic review for August, which shows the overall deposit rate edged up slightly to 8.83% from 8.74%, while negotiated deposit rates decreased to 10.72% from 11.21%.
Government securities, including treasury bills and bonds, have seen falling yields throughout 2025. One-year bills now yield around 8%, while long-term bonds of up to 25 years have yields compressed into the 12% to 14% range.
“The equities market gain over a single year clearly positions the stock market as the highest-returning formal asset class. For some investors, returns were even higher on specific counters, particularly banking stocks,” Kamugisha said.
He explained that abundant liquidity, falling fixed-income yields and investors reallocating capital toward equities have boosted prices.
“As interest rates fall, discount rates used in equity valuation also decline, pushing equity prices higher,” he added.
Kamugisha also noted that recent structural reforms on the Dar es Salaam Stock Exchange — especially adjustments to price determination mechanisms such as tick sizes and trading rules — have improved pricing efficiency, increased volatility and gradually enhanced market liquidity.
While equities are increasingly attractive compared to deposits and fixed-income securities, they carry higher risk and volatility. The Tanzanian market remains relatively concentrated, with a few banks, including CRDB, NMB and Mkombozi Commercial Bank as well as Tanzania Breweries Limited, driving most of the turnover and price action.
“For investors willing to accept price swings, the equity market currently offers superior potential,” Kamugisha said.