Experts see good year for Tanzania’s financial markets

In 2023, according to the Dar es Salaam Stock Exchange (DSE), the value of shares traded amounted to Sh225 billion, representing a 68 percent increase on the Sh134 billion in stock sales recorded in 2022.

The turnover from traded bonds also was on the rise last year at Sh3.65 trillion, marking a 42.35 percent increase compared to Sh2.56 trillion in the preceding year.

The anticipated rise in foreign direct investment (FDI), conducive macroeconomic landscape, rapid growth in investment and upturn of key sectors are all expected to complement the financial market performance in 2024.

Financial analyst and chief executive of Exodus Advisory Ramadhani Kagwandi told The Citizen that the positive economic outlook, coupled with reduced inflation, could lead to new investments and increased contributions from existing investors.

“This is expected to be driven largely by retail investors and internal institutions,” he said.

Mr Kagwandi added that the introduction of the Central Bank Interest Rate (CBR) will ultimately assist in aligning market movements between fixed-income securities and the equities segments.

Vertex International Securities capital markets manager Ahmed Nganya said the impressive numbers in 2023 reflect the evolving landscape of the Tanzanian financial market and underscores the growing allure of the Dar bourse as a vibrant hub for investment.

“As the DSE continues to mature and diversify, it positions itself as a critical player in the broader economic framework, promising further dynamism and prosperity in the years to come,” he said.

The rapid growth of agriculture and other key sectors is set to play a pivotal role in 2024, while banking, finance and investment, coming off a strong performance in 2023, are also expected to continue with their upward trend, driven by technological innovations and regional integration efforts.

“The fixed income market, especially, is likely to continue its growth trajectory from 2023. The introduction of sustainable bonds and a renewed focus on green financing are expected to attract more investors seeking socially responsible and environmentally friendly investment opportunities,” Mr Nganya said.

Orbit Securities investment analyst Ammi Julian said bank stocks will continue to perform well in the stock market.

Additionally, there are entities such as investment funds like Nicol and TCCIA Investment Limited (TICL) that will continue to attract the interest of many investors as was seen in 2023.

“There are also the financial results of Vodacom that are awaited in 2024, which are expected to bring dynamism to the market. Investors are eagerly awaiting dividends and assessing the performance of key players,” Mr Julian said.

He added that there is an anticipated return of foreign investors as global headwinds ease.

There is also an expected boom in retail investors due to improved awareness and integrated digital solutions in the market.

According to data analysed by Vertex International Securities, the All Share Index (DSEI), which determined the performance of all listed firms, experienced a 6.98 percent decline attributed to the poor performance of cross-listed companies in 2023.

The company said last year, CRDB Bank Plc was the top market gainer with a 14.13 percent annual increase in its stock price, rising from Sh395 by the end of December 2022 to Sh460 by the end of 2023.

In contrast, DCB’s stock price declined by 15.38 percent, dropping from Sh150 to Sh130.

For his part, Mr Kagwandi said there were also challenges from the departure of foreign investors, many of whom hold significant stakes in their respective companies.

“The other significant challenge is; that locally, financial literacy and inclusion remain low. Collaborative efforts to improve these aspects will facilitate the growth of the capital market,” he added.

Overall, stakeholders agree that in 2024 the financial market in general and the DSE remain a promising avenue for investors and a critical barometer for the economy’s health.