Q: If you are to compare 2014 and 2015, how do your rate the dual in terms of performance and market’s turnover, number of IPOs and market capitalisation.
A: Things were not bad in 2015 as the market turnover reached 1,073bn/- against 382bn/- in 2014.
The number of listings were two in 2015 (One equity and one corporate bond); but in 2014, there were three listings. And the market capitalisation for 2015 was 20,495bn/- compared to a total market capitalisation of 22,090bn/- in 2014.
Q: If you were to describe the 2016 DSE agenda how would you put it?
A: DSE prospects in 2016 include: One, more public awareness campaign and engagements with the business community and other stakeholders to encourage more listings. Two, completing DSE demutualisation by conducting IPOs and self-listing.
Three, carrying out studies that will inform the introduction of new second generation financial products into the market and four continuing with initiatives to increase our efficiency levels so as to provide more liquidity in the market.
Q: I do understand that part of the process to demutualise the DSE which includes changing of name to Dar es Salaam Stock Exchange Plc has been done. The only thing remaining is the process of raising capital from shareholders. How far have you reached with this process?
A: The application for raising capital through initial public offer and self-listing is with the industry regulator. The regulator is going through our documents for the approval process and we are waiting for a go-ahead.
Q: According to media reports, last year’s weakening of the Tanzania shilling, affected many business transactions, what happened with the Dar bourse?
A: It is true that the (foreign) investors’ activities and the market performance in general as measured through market capitalisation and indices in US dollars terms was affected negatively following the weakening of the shilling.
Our market lost its value by 25 percent last year as measured in US$, while in Tanzanian shilling terms the market capitalisation and indices went down just by 7 percent.
This means almost 18 percent loss was a result of the shilling depreciation.
Q: Records available indicate that in the year 2014, at least 200,000 Tanzanians bought shares with your bourse, what about in 2015, how many traded through the bourse?
A: Yes the total number of investors that has investment and trading accounts at the exchange was about 250,000 by 2014.
At the close of 2015 the number had increased to about 450,000. Mostly, the increment was a result of the listing of Mwalimu Commercial Bank.
However, this number is still relatively in the low end given our population, as it is about 1 percent of the total population.
Q: We are aware that the Bank of Tanzania (BoT) is set for full liberalisation of the capital account which in fact will enable more foreign investors to participate in the stock market, what impact will this have at the bourse?
A: The Foreign Investors Limit Regulation was repealed in 2014 that uplifted foreign investors limit in any of the companies listed on the exchange from the previous 60 percent.
We expect to see an increase in foreign investors’ activities in our stock market whose result will be better prices for stocks which will benefit both local and foreign investors.
Q: If we are to measure the bourse performance in terms of microeconomic and macroeconomic benefits following partial liberalisation, what would you rate it?
A: During 2014 the government also partly liberalised the capital account to allow investors in the East African region to invest in government securities.
We have yet to see the impact of this to our bonds market. However, this was a positive move whose impact will be seen in the near future once the level of awareness has improved and some other embedded investment and operational challenges are re-looked into.
Q: How have you intensified trading activities at the bourse so as to ensure financial inclusion?
A: Trading activities at the exchange are a result of availability of stocks that have been listed versus the number of investors and amount of funds that are available for investment as well as the existence of the necessary fundamentals and economic factors that support such investments.
The availability of stocks and shares depends on the number of institutions that opt to use the capital market route to finance their enterprises and development projects (both from the private sector and the public sector), currently this number is small and what we have been doing is to sensitise, educate and create the necessary awareness about the benefits of using capital markets as financing options.
We will continue to engagement with potential and existing stakeholders in creating this awareness, underscoring the fact that the response hasn’t been as positive as we expected.
Availability of products normally (or in some cases) creates the demand — in this context we will see more investors interested in the capital markets if products such as shares and bonds are issued and listed at the bourse and also as the level of awareness increases.
Through this process the financial inclusion and an inclusive economic empowerment is enhanced.
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