Govt seeks more firms for DSE

The government is looking into ways of listing some of the privatised state firm on Dar es Salaam Stock Exchange (DSE) second window, Enterprise Growth Market (EGM).

The EGM, for start-up and capital boost bourse, launched on Tuesday has less stringent rules compared to Main Market Investment Segment (MMIS) of DSE.

This has made things easier for policy- makers to realize one of the objective of establishment of DSE that the public should continue to own shares in former state enterprises.

The Prime Minister Mizengo Pinda said the government, after establishing the alternative market, would single-out eligible firms to be listed.

"Now the EGM has been flagged, this issue is discussable," the Prime Minister told the 'Daily News' at the launching ceremony of EGM.

He added: "we (ministers responsible) will sit down and single-out the appropriate privatized state-firm for listing."

The EGM also, according to experts, could work well for recapitalisation of the ill state firms like Air Tanzania, National Insurance Corporation (NIC) and Tanzania Telecommunications Company Limited (TTCL) instead of privatising them or injecting fresh capital via taxes.

A recent report by the Consolidated Holding Corporation (CHC) dubbed 'Challenges for Execution of Duties,' shows that 274 state firms were privatised between 1997 and 2012.

The report further paints gloomy picture that out of the 170 privatised organisations, where monitoring and evaluation was conducted only 42 organisations are operating on profit while 70 are operating on losses and 58 are non-operational.

On top of that, the report shows, there are 29 firms on waiting listing for privatisation, include the downtown New Africa Hotel and National Bank of Commerce (NBC).

A sources within capital market have it that DSE is lobbying to Treasury to list profitable firms at the bourse to increase the much needed products and vibrancy.

"I know DSE has singled-out 30 potential firms for listing at main market, but the government is yet to make decision," the source said.

According to the Capital Market and Securities Authority listed companies are less prone to evading and avoiding taxes thus higher tax revenues. 

Additionally, the regulators said, involvement of shareholders in companies' decision making contribute to enhanced good corporate governance. 
Source: Daily News, reported by Abduel Elinaza from Dar es Salaam, Tanzania
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