Dar bourse hits by election fever

Financial analysts have blamed dwindling business on the Dar es Salaam Stock Exchange (DSE) on the election fever, among other factors.

“The election campaigns have created a lot of uncertainties in the market...although we at least know what CCM (Chama Cha Mapinduzi) aspires to do, nobody knows the contents of Ukawa’s election manifesto,” Core Securities Managing Director, Mr George Fumbuka, told the ‘Daily News’ in Dar es Salaam yesterday.

Trading on DSE has been on the decrease in the recent weeks due to reduced participation of foreign investors in response to the economic turmoil in China.
According to DSE report for the week ending August 21, trading in ten equities generated 1.74bn/- compared with about 29bn/- posted a week earlier.

Foreign investors’ participation, the report showed, accounted for 0.31m/- compared with 28bn/- in the previous week, with total trading volume running about 72 per cent below the previous week’s.

“Foreign investors play a significant role in DSE trading,” said Mr Fumbuka, noting that the dismal participation of foreigners have adverse impact on the general performance of the bourse.

Mr Fumbuka further said that pension funds, another category of major players in the market, have diverted attention from the stock market to what he described as “their other priorities.”

An official with the stock market was, however, optimistic that the bourse is likely to recover by next week, subject to the normalisation of financial markets in China.

Meanwhile, Mwalimu Commercial Bank (MCB) is scheduled for official listing on DSE next week, Mr Fumbuka, the listing sponsoring broker said yesterday.

“We are almost done with all the preliminary works and hopefully we will officially list the bank next week,” he said. 

The bank, according to its prospectus, was to enter the stock market on June 8, 2015 but the listing has so far been postponed for at least three times due to what was described as changing listing requirements by DSE.

Mr Fumbuka was earlier quoted as saying that compiling the banking information of over 230,000 prospective investors who bought MCB shares had been difficult, delaying the listing as a result.

“The listing has been delayed due to a record high number of share buyers...the 235,000 people who bought shares in MCB is ten times bigger than all past IPOs (Initial Public Offers) put together,” Mr Fumbuka was once quoted by this paper as saying.
Source: Daily News, reported by Masato Masato, from Dar es Salaam, Tanzania
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