Mkombozi Bank hits ‘ground running’ as it goes public

Mkombozi Commercial Bank has hit the bourse running after its share rose by 50 per cent after it listed on the Dar es Salaam Stock Exchange (DSE) second market.

The share surged from 1,000/- to 1,500/- despite the bank experiencing undersubscription of 25 per cent during initial primary offer (IPO), that ran for three weeks to the end of November.

The Capital Markets and Securities Authority (CMSA) Chief Executive Office, Ms Nasama Massinda said the IPO was ‘technically successful’ since it’s over 70 per cent.

“Between 20 and 30 per cent is a failure IPO, but at 75 it’s very successful,” Ms Massinda said during the listing of Mkombozi Bank. She defended the three-week primary market sale as standard period globally and companies have the liberty of asking for extension or go for right issue after listing.

The bank’s Chairman, Mr Masha Mshomba, attributed under subscription to a short period which minus public holidays and weekends remained with a few days.

“The statement we issued of how we handled Tegeta Escrow account increased investors’ confidence. We later received a lot of inquiries,” Mr Mshomba said.

“I am predicting the share will appreciate soon after the listing,” Mr Mshomba, who is also a director of finance and administration at Public service Pensions Fund, said. Mkombozi wanted to raise 5bn/- during the IPO but ended gathering 3.776bn/-.

The bank wants to use the money for raising its core capital to beat the new Bank of Tanzania’s 15bn/- commercial banks capital level by next March.

The bank’s bid to go public was explained as successful since it has pushed up the bank paid up capital to 20.6bn/- thus made the core capital to be 18.7bn/- well above the BoT requirement.

Mr Mshomba said the remaining 25 per cent which they failed to sell during IPO would be sold at the secondary market.

The bank is listed on DSE’s second window - Enterprise Growth Market (EGM). The DSE CEO, Mr Moremi Marwa< said the listing of Mkombozi bank has boosted the bourse’s market capitalisation by 20.6bn/-.

The current market capitalisation is 21.7tri/-. The church-owned bank was accused of transferring money from the Tegeta Escrow account to some individuals including government officials and religious leaders.

The IPO started on November 3 and ended on November 29, while the report was presented in the National Assembly on November 26.
Source: Daily News, reported from Dar es Salaam, Tanzania
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