Tanzania: Mobile phones push up Mwalimu Bank IPO

Mwalimu Commercial Bank initial public offer (IPO) oversubscription is looming largely as upcountry buyers have outpaced Dar es Salaam residents in buying shares, thanks to mobile phone transaction platforms.

The previous IPOs trend was dominated by Dar es Salaam buyers as most could reach stock brokers, banks and other financial institutions to access information easily because all have officers in the country’s business capital.

However, the technology has changed the trend thus allowing rural residents to access brokers through their mobile phones and complete share buying procedures at finger tips.

Core Securities Chief Executive Officer, Mr George Fumbuka (pictured), told ‘Daily News’ on Tuesday for the first time upcountry’s buyers are dominating the IPO unlike the previous ones where Dar es Salaam topped the list.

“Mobile phones have made wondersÉ a lot of people are now buying shares from upcountry for the first time,” Mr Fumbuka said.

This is the first time in history shares are sold via mobile phones in Africa. The CEO added: “The response is very positive, and we are expecting the IPO to be oversubscribed by big margin as institution investors have yet to throw their weight.”

Mr Fumbuka, whose firm is a sponsoring broker, said that institutions, investors -- insurers, pensions, banks and corporate -- are normal, buying at the dying minutes of the IPO that is expected to end in the next two weeks -- on May 4.

“It’s too early to give out (IPO buying) figures as we need to compile the entire buying process from various stakeholders -- brokers, banks. But the progress is very encouraging,” Mr Fumbuka said.

Zan Securities CEO Raphael Masumbuko said they received a number of positive inquiries from rural areas after education and awareness campaign in southern highland regions.

“The response was superb and oversubscription is inescapable as most portrayed a picture of wanting the bank like on Tuesday.

“On top of that (Mwalimu) bank has customers at hand even before opening doors,” Mr Masumbuko said. Orbit Securities General Manager Juventus Simon said other reason for oversubscription is that the Tanzania Teachers’ Union (TTU) publicised the IPO heavily, including holding seminars and road show to woo buyers.

“Unlike others IPOs at EGM (enterprise growth market) we are receiving a lot of inquiries --people want to know the bank thoroughly,” Mr Simon said, “this is going to be a hit.”

He said the TTU has also created a good platform for its members to participate in the IPO. will push for more wouldbe- investors to participate hence oversubscription.

Mwalimu Bank envisages to start in November with a capital of 25bn/- which is above the regulator threshold of 15bn/-.

The bank has already 17bn/- in hand. The bank is expected to raise 25bn/- after selling 50,000,000 shares. Each share is worth 500/- while the minimum share to be purchased is a 100-lot.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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