Tanzania’s Stock Market Breaks TSh40 Trillion as Local Investors Absorb Foreign Exit

Tanzania’s capital market crossed a significant threshold in September 2026 as total market capitalisation on the Dar es Salaam Stock Exchange moved above TSh40 trillion for the first time, even as foreign investors continued to sell more shares than they bought. According to Alpha Capital’s September 2026 Capital Market Report, total market capitalisation rose by 4.82 percent during the month to TSh40.57 trillion, while domestic market capitalisation increased by 4.47 percent to TSh28.11 trillion. The DSE All Share Index gained 4.8 percent and the Tanzania Share Index rose 4.5 percent, extending a rally that has increasingly been supported by domestic rather than foreign capital. The more important story sits beneath the headline market value. Alpha Capital reports that Tanzanian investors accounted for 95 percent of total equity purchases in September and 79 percent of sales, while foreign investors represented only 5 percent of purchases but 21 percent of sales. Foreign purchases totalled TSh11.76 billion against TSh48.09 billion in foreign sales, producing a net foreign outflow of TSh36.33 billion during the month, larger than the TSh33.28 billion recorded in August. That combination is important because in many frontier markets, sustained foreign selling often translates quickly into weaker prices when domestic liquidity is insufficient to absorb the stock being offered. Tanzania’s September performance suggests that local capital is beginning to play a more important role in determining market direction, reducing the extent to which the DSE depends on external portfolio flows. Domestic Capital Is Becoming the Market’s Main Shock Absorber Alpha Capital’s September report shows that local investors bought TSh221.63 billion worth of equities during the month while selling TSh185.31 billion. Foreign investors, by contrast, bought only TSh11.76 billion and sold TSh48.09 billion. The result was a market in which foreign investors were net sellers but domestic investors effectively absorbed that pressure without allowing valuations to collapse. That matters because one of the persistent weaknesses of smaller African capital markets has been dependence on foreign portfolio capital. Foreign investors can provide liquidity and improve market depth, but they can also transmit global shocks very quickly. When global interest rates rise, risk appetite falls or geopolitical uncertainty increases, foreign portfolio managers often reduce exposure to frontier markets regardless of domestic fundamentals. Alpha Capital links some of the current foreign selling pressure to tighter global financial conditions, while also noting that the DSE continued appreciating despite those outflows. The September data therefore suggests an important structural shift. Tanzania’s capital market is not yet insulated from global capital movements, but domestic savings are becoming large enough to cushion some of their effects. That is a much stronger position than a market that rises only when foreign funds are buying. NMB and CRDB Still Dominate the Market The rally, however, remains highly concentrated. Alpha Capital reports that NMB Bank led September trading with approximately TSh97.85 billion in turnover, accounting for about 42 percent of total monthly equity turnover. CRDB followed with TSh91.28 billion, equivalent to about 39 percent. Together, the two banks accounted for roughly TSh189.13 billion, or 81 percent of all equity turnover during the month. Tanzania Breweries contributed 4.2 percent, KCB 3.8 percent, Vodacom Tanzania 3.7 percent and Tanzania Cigarette Company 2.2 percent. This concentration creates a more complicated picture than the headline market capitalisation suggests. The DSE is becoming larger, but liquidity remains concentrated in a very small group of counters. If more than four fifths of monthly turnover depends on NMB and CRDB, then the market is still some distance from having broad based liquidity across listed companies. That distinction is critical for investors. Market capitalisation measures the value of listed equity. Liquidity measures how easily investors can actually buy and sell that equity without materially moving prices. A market can become very large on paper while remaining relatively narrow in practice. The September rally therefore reflects both progress and concentration. Vodacom Was the Month’s Best Performer The strongest individual share price performance came from Vodacom Tanzania, which gained 22.86 percent during September to close at TSh1,290 per share. That pushed its year to date gain to 96.95 percent. Alpha Capital attributes part of the buying to investor positioning ahead of the company’s final dividend of TSh23.91 per share, payable in October. Afriprise Investment followed with a 21.6 percent monthly gain, while Nation Media Group rose 12.5 percent. Banking counters also remained among the strongest performers. CRDB gained 11.74 percent during the month, extending its year to date rise to 92.81 percent, while KCB gained 9.5 percent. NMB declined 1.9 percent during September after its strong post split performance in August, but remained among the strongest year to date counters, with Alpha Capital calculating a split adjusted gain of 146.14 percent. The spread between winners and losers was also substantial. Eleven counters gained during September, twelve declined and five were unchanged. DCB recorded the largest fall at 14.74 percent, while Tanzania Portland Cement and Precision Air were among the other notable decliners. This reinforces one of the more important conclusions in Alpha Capital’s report: the DSE rally is becoming increasingly selective. The market as a whole may be rising, but investors are rewarding particular companies, especially those with stronger earnings expectations, liquidity, dividends or sector positioning. Equity Turnover Jumped 59%, But Large Negotiated Deals Did Much of the Work Trading activity increased sharply during September. Total equity turnover rose 59.35 percent from August to TSh233.25 billion, compared with TSh146.38 billion the previous month. Domestic counters contributed about TSh224 billion, while cross listed stocks generated another TSh9.3 billion. Compared with September 2025, turnover was more than four times higher. But much of that increase came from pre arranged transactions rather than ordinary market trading. Alpha Capital calculates that negotiated trades amounted to TSh152.5 billion, equivalent to 65.4 percent of monthly turnover, while normal trades generated about TSh80.76 billion. NMB and CRDB together accounted for more than 80 percent of those pre arranged transactions. This is another reason the market’s progress needs to be interpreted carefully. Higher turnover is positive because it signals increasing activity and investor participation, but liquidity is strongest when it is broad, continuous and spread across many investors and securities. A market where much of the turnover comes from a relatively small number of negotiated institutional trades can still present liquidity constraints for ordinary investors entering or exiting positions. September therefore showed deeper trading than August, but not necessarily uniformly deeper liquidity. The Bond Market Is Attracting Even More Money While equities generated much of the attention, Tanzania’s fixed income market continued to absorb enormous volumes of capital. The government offered TSh535.8 billion across five year, ten year and fifteen year Treasury bonds in September. Investors submitted bids worth TSh1.267 trillion, producing an overall subscription ratio of 2.36 times. The government accepted TSh489.23 billion, equivalent to 91 percent of the targeted issuance. Demand was strongest relative to supply for the five year bond. Investors tendered TSh398.06 billion against an offer of TSh145.63 billion, resulting in a 273 percent subscription rate and a weighted average yield to maturity of 9.53 percent. The ten year bond attracted TSh364.96 billion in bids against TSh182.9 billion offered, while the fifteen year bond received TSh504.13 billion against TSh207.27 billion offered. The numbers show the scale of domestic liquidity searching for yield. Investors were willing to submit more than twice the amount of capital the government was seeking, even as equities were recording some of their strongest gains of the year. This implies that Tanzania is currently experiencing strong demand across both major asset classes rather than investors simply shifting money from bonds into shares. The secondary bond market also strengthened. Turnover rose from TSh294.22 billion in August to TSh493.31 billion in September, although the number of transactions declined from 574 to 535. Alpha Capital notes that this means the recovery was driven by larger individual trades rather than a greater number of transactions. Government securities represented 99.7 percent of all secondary bond turnover. The twenty year bond alone contributed TSh199.15 billion, or 40.5 percent of government bond turnover, while the ten year bond accounted for another TSh175.28 billion. Together with the twenty five year bond, those three maturities represented almost 92 percent of government bond trading. Tanzania’s Macro Backdrop Is Supporting the Rally The strength of the capital market is occurring against a relatively supportive domestic macroeconomic environment. Alpha Capital’s September report places Mainland Tanzania’s first quarter 2026 real GDP growth at 6 percent and estimates that growth remained above 6 percent in both the second and third quarters. Headline inflation stood at 4.3 percent, within the Bank of Tanzania’s 3 percent to 5 percent target range, while the Central Bank Rate remained at 6.25 percent. Private sector credit expanded particularly quickly. Alpha Capital reports average year on year credit growth of 32.5 percent in September, while extended broad money increased 26.2 percent. Non performing loans stood at 2.5 percent in August, well below the central bank’s 5 percent tolerable threshold. Average commercial lending rates remained around 15 percent, while negotiated lending rates for prime borrowers fell to 11.93 percent. Those conditions matter for listed companies because strong credit expansion generally supports consumption, business investment and corporate earnings, particularly in banking, financial services and commercially sensitive sectors. The external position is also providing support. Exports of goods and services increased 16.4 percent to US$20.22 billion in the year ending August 2026. Gold exports reached US$5.63 billion, up from US$4.32 billion a year earlier, while manufactured exports rose to US$2.21 billion from US$1.53 billion. Travel receipts reached US$4.39 billion and transport earnings US$3.3 billion. But the external account is not without pressure. Imports grew faster than exports, increasing 21.4 percent to US$21.27 billion, partly because petroleum imports jumped 51.7 percent to US$3.43 billion. The current account deficit consequently widened to US$2.48 billion from US$1.7 billion a year earlier. Foreign exchange reserves remained at US$5.89 billion, equivalent to 4.2 months of projected imports excluding FDI related imports. That combination explains why Alpha Capital remains positive on Tanzania’s financial markets while still warning about energy prices, freight costs, foreign exchange exposure and the widening current account deficit. Gold Is Helping Tanzania Absorb the Oil Shock One of the most interesting macroeconomic tensions in the report is the simultaneous increase in oil and gold prices. Alpha Capital reports average crude oil prices rising to US$84.40 per barrel in September from US$79.80 in July, while gold increased 8.3 percent to US$4,411 per ounce. Higher oil prices increase Tanzania’s petroleum import bill and eventually feed into transport and inflation, while higher gold prices work in the opposite direction by increasing export earnings and foreign currency inflows. For Tanzania, this creates a natural but incomplete hedge. The country imports petroleum but exports gold. When geopolitical instability pushes both commodities higher, part of the foreign exchange pressure created by more expensive fuel can be offset by stronger mining receipts. The balance is not perfect. Petroleum imports have already risen substantially faster than overall exports, and transport inflation remains elevated. But Tanzania’s growing gold receipts help explain why reserves have remained relatively comfortable despite a larger import bill. Even ETFs Are Beginning to Build Scale The expansion of the market is not confined to individual equities and government bonds. The iTrust EAC Large Cap ETF gained 4.29 percent during September to close at TSh1,460 per unit. Turnover reached TSh11.48 billion on 8.02 million units, while the fund’s market capitalisation rose to TSh238.89 billion. Alpha Capital describes the product as increasingly contributing to the capital market by providing diversified exposure to major East African equities. The Vertex International Securities ETF remained much smaller and less liquid, ending September unchanged at TSh325 with turnover of approximately TSh440 million. Alpha Capital notes that transactions were dominated by relatively small retail sized trades, underscoring the difference in liquidity between the two products. The development matters because ETFs provide a different route into the market for investors who may not want to select individual stocks. As Tanzania’s investment industry deepens, products that combine professional allocation, diversification and easier access could become increasingly important in bringing household savings into capital markets. Alpha Capital Says Managed Portfolios Returned More Than 50% The report also provides Alpha Capital’s own portfolio performance data. According to the firm, investor portfolios under its Portfolio Management Service whose one year contracts matured in September 2026 generated an average net return of 53.4 percent, compared with the programme’s 15 percent annual target. The portfolios were initiated in September 2025, and Alpha Capital states that the reported return is net of applicable management, performance and termination fees. Across the contracts maturing during 2026, Alpha Capital reports average net returns of 48 percent for contracts maturing in the first quarter, 61 percent for the second quarter cohort and 53.4 percent for the third quarter cohort. It emphasises that these are full one year returns for portfolios reaching maturity during each period, rather than quarterly returns. The firm also cautions that individual results vary and that past performance does not guarantee future returns. That distinction is important because unusually strong returns can easily be misinterpreted if the investment period is not stated clearly. Alpha Capital’s numbers describe one year portfolio performance across different maturity cohorts, not returns generated in three months. The Economic Read September may eventually prove more important for the Dar es Salaam Stock Exchange than the TSh40 trillion headline alone suggests. The milestone itself is significant. Tanzania’s listed market is becoming larger, share prices across several major counters have risen sharply and trading activity is materially higher than a year ago. But the more consequential development may be where the money is coming from. Foreign investors sold a net TSh36.33 billion of equities during September. Tanzanian investors absorbed that selling and the market still gained almost 5 percent. That suggests the domestic capital base is becoming more capable of determining market direction. There are still obvious weaknesses. Liquidity remains heavily concentrated in NMB and CRDB. Nearly two thirds of September equity turnover came through pre arranged transactions. The corporate bond market remains tiny compared with government securities. Foreign participation has weakened. A handful of stocks continue to dominate price performance and turnover. But the direction is increasingly clear; Tanzania’s financial system is generating more domestic liquidity, credit is expanding rapidly, institutional investors are active, government securities remain heavily oversubscribed and the equity market has crossed a valuation threshold that would have appeared distant only a few years ago. Alpha Capital’s September report captures a market that is becoming larger without necessarily becoming proportionately broader. That is the next stage of Tanzania’s capital market challenge. Crossing TSh40 trillion proves that the market can grow in value. The harder test is whether Tanzania can now convert that value into deeper liquidity, more listed companies, larger corporate bond markets, wider retail participation and enough domestic capital to make the DSE increasingly independent of the decisions of foreign portfolio managers. For September 2026 at least, domestic investors showed that they were capable of carrying the market when foreign investors headed for the exit. FAQ How large is the Dar es Salaam Stock Exchange? According to Alpha Capital’s September 2026 Capital Market Report, total DSE market capitalisation reached TSh40.57 trillion at the end of September, while domestic market capitalisation stood at TSh28.11 trillion. Are foreign investors leaving Tanzania’s stock market? Foreign investors recorded a net equity outflow of about TSh36.33 billion in September after purchasing TSh11.76 billion and selling TSh48.09 billion. Domestic investors nevertheless accounted for 95 percent of market purchases. Which stocks dominate trading on the DSE? NMB and CRDB dominated September turnover, accounting for approximately 81 percent of total equity trading between them. Which DSE stock performed best in September 2026? Vodacom Tanzania was the strongest monthly performer, gaining 22.86 percent to TSh1,290 per share. Its year to date gain reached 96.95 percent. How strong is demand for Tanzania government bonds? Government Treasury bond auctions attracted TSh1.267 trillion in bids against TSh535.8 billion offered in September, equivalent to an overall subscription ratio of 2.36 times. What is Alpha Capital’s outlook for Tanzania’s financial markets? Alpha Capital expects financial markets to remain broadly constructive through the final quarter of 2026, supported by economic growth, credit expansion, domestic investor participation and adequate foreign exchange reserves, while warning about oil prices, freight costs, exchange rate pressures and the widening current account deficit.