By Costantine Muganyizi
The Dar es Salaam Stock Exchange (DSE) entered a new phase in September 2026, breaking through the TSh40 trillion market-capitalisation barrier for the first time as Tanzania’s equity market extended one of its strongest rallies in recent years.
Total market capitalisation reached TSh40.57 trillion at the end of September, up from about TSh38.74 trillion at the end of August and roughly 69 percent above its level at the end of 2025.
But the significance of the milestone goes beyond the headline valuation.
For DSE Chief Executive Officer Peter Nalitolela, the breakthrough reflects growing investor interest in listed securities, positive price movements in major counters and increasing recognition of the capital markets as an avenue for long-term wealth creation.
“The achievement reflects the increasing scale and importance of the country’s capital markets as a platform for investment and wealth creation,” he told Business Insider.
Isaac Lubeja, Advisory Manager at Zan Securities, similarly sees the milestone as more than a record number.
“We saw more than a headline number. It is the largest the bourse has ever been,” he says.
A market being re-rated
September did not start the rally; it extended a powerful advance that had gathered pace during the preceding months.
The DSE first crossed TSh40 trillion on September 10, when total market capitalisation closed at about TSh40.3 trillion. By September 11, it had reached about TSh40.61 trillion, extending gains that had lifted market capitalisation by roughly 22 percent from the end of May.
Official DSE data also show the market continuing to trade above the TSh40 trillion threshold during the month. Mr Nalitolela attributes the performance to increasing investor interest, positive movements in major counters and the growing recognition of equities as a long-term wealth-creation avenue.
The performance of major banking counters, particularly NMB Bank and CRDB Bank, was also an important contributor to the increase in market valuation. Mr Lubeja identifies three key drivers: stronger half-year bank earnings, the NMB share split and gains spreading into other counters.
“These are not prices running ahead of fundamentals; they are prices catching up with them,” he says.
That interpretation is important because it places the 2026 rally within a broader improvement in corporate valuations rather than treating it simply as speculative price inflation.
Domestic investors take centre stage
One of the most significant features of the 2026 rally has been the growing importance of domestic investors. Domestic market capitalisation reached TSh28.11 trillion at the end of September, accounting for roughly 69 percent of the total market.
Mr Nalitolela says domestic investors remain fundamental to the sustainability of Tanzania’s capital markets. During the week ending September 11, local investors accounted for 99.85 percent of equity purchases.
The wider third-quarter picture reinforces the importance of local demand. DSE data show local investors accounted for 93.91 percent of equity purchases during July-September, while foreign investors accounted for 6.09 percent.
Mr Lubeja argues that this domestic participation has been particularly important because foreign investors were net sellers during the quarter, with Tanzanian investors absorbing much of the selling while prices continued to rise.
“This rally is ours: it is domestically owned,” he told Business Insider late last week.
For the DSE, the significance goes beyond September’s trading statistics. It points to the potential for domestic savings, pension funds, institutions and individual investors to become a stronger source of long-term capital for local companies.
Mr Nalitolela says the bourse is therefore focusing on technology, financial education and partnerships with financial institutions and mobile financial-services providers to make investment more accessible.
NMB and CRDB: important, but not the whole story
NMB and CRDB have been among the most influential counters during the market’s re-rating. On September 30, NMB recorded a weighted average share price of TSh2,070, with 545,287 shares traded through 1,541 deals, while CRDB traded 2.6 million shares at a weighted average price of TSh2,950 through 932 deals.
Mr Nalitolela said NMB’s 1-for-10 share split was also an important development because it increased the number of shares in circulation and made the counter more accessible to investors.
But he makes an important distinction: rising market capitalisation is not the same as fresh capital raised by companies.
Analysts said that distinction matters for Tanzania’s wider development ambitions. Higher share prices increase the value of existing securities, but the economic impact becomes much greater when companies also use the market to raise new capital for expansion and investment.
Most of them contend that the next stage of DSE development depends not only on maintaining valuations, but also on attracting more companies to list and making greater use of the market as a financing platform.
The rally was not uniformly broad-based
Despite the record market value, September was not a rising tide lifting every counter.
Mr Nalitolela notes that on September 11 the stock mart recorded eight gainers, eight declining counters and 12 unchanged counters.
That pattern is significant. It shows that the increase in market capitalisation has been strongly influenced by major counters rather than representing uniform price appreciation across the entire market.
This concentration reinforces the need for a broader issuer base and greater participation across sectors.
“The challenge for the DSE is therefore to ensure that the TSh40 trillion milestone becomes a platform for market breadth, rather than simply a higher valuation for a relatively small number of large companies,” a seasoned stock broker said.
Market value versus market liquidity
Perhaps the most important qualification to the September record comes from Mr Nalitolela himself: a bigger market is not automatically a more liquid market.
“Market capitalization and liquidity are related, but they measure different aspects of market performance,” he explained. According to him, market capitalisation measures the value of listed securities, while liquidity reflects the ease and frequency with which investors can buy and sell them.
This distinction was visible during September, when periods of strong price appreciation were accompanied by uneven trading activity. The DSE’s September 25 report, for example, recorded total equity turnover of about TSh3.78 billion on the day, while market capitalisation remained above TSh40 trillion.
For the bourse, the implication is clear: future market development must involve not only higher valuations but deeper and more consistent liquidity, wider participation and greater activity beyond the largest counters.
Bonds and ETFs deepen the market
The September milestone also needs to be viewed within the broader development of Tanzania’s capital market.
Equity turnover reached TSh824.08 billion during the third quarter, while government bonds recorded about TSh1.2 trillion in turnover. The value of outstanding government bonds stood at about TSh33.47 trillion at the end of September. DSE data also show continued development of corporate, sustainable, Sukuk and infrastructure bonds.
Exchange-Traded Funds (ETFs) are another increasingly important component. The segment recorded TSh28.70 billion in third-quarter turnover, with 23.36 million units traded. An ETF is a single investment fund that holds a basket of many assets – like stocks, bonds, or commodities – and trades on a public stock exchange just like a regular company share.
Mr Lubeja sees this diversification as one of the more significant signs of market deepening.
“Equities, ETFs, government, corporate, Islamic, green and sub-national instruments: we believe that range, more than any index level, is what tells us our capital market is genuinely deepening.”
The broader point is that a mature capital market must offer investors different instruments while providing businesses with multiple avenues for raising long-term finance.
From TSh40 trillion to economic impact
For Tanzania, the most important question is now what the larger market can do for the real economy.
Mr Nalitolela sees the capital market as a mechanism for mobilising long-term savings and directing them towards productive activities, including business expansion, infrastructure, innovation and employment creation.
This gives the DSE a direct relevance to the ambitions of Dira 2050, particularly its objective of building a larger, more competitive and investment-driven economy.
The CEO says the Exchange’s ambition is to translate market growth into more listings, greater capital raising, stronger liquidity, innovative products and wider participation by Tanzanians.
“Our ambition goes beyond market valuation.” That is perhaps the most important message behind the September milestone.
Mr Nalitolela adds: “We want to build a capital market that increasingly contributes to productive investment, business expansion, employment creation and sustainable economic development.”
The TSh40 trillion barrier was therefore more than a psychological threshold. It established a new reference point for Tanzania’s capital market. The bigger test is whether the higher valuations, stronger domestic participation and expanding range of financial instruments can now be converted into a deeper market that mobilises more long-term capital for businesses and the wider economy.
