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| Mr Kitua |
Foreign ownership threshold in listed companies at the Dar es Salaam
Stock Exchange (DSE) should be uplifted to make more the bourse more vibrant,
the DSE Chief Executive Officer, Mr Gabriel Kitua, said.
"Market players would want the threshold to be relaxed because
there is big interest of foreign investors in our market," he said in an
interview with 'Daily News' on Tuesday.
He said the 60 per cent ceiling limits
DSE from functioning at its full potential, saying domestic equities trade
below the actual value.
He said the Central Bank has the prerogative to control Capital account
on behalf of the government and that
the Capital Market Authority has advised the government to lift foreign
ownership.
He said that if foreign portfolio investors come and buy shares,
they would be buying shares from Tanzanians and thus increasing money to invest
in various projects.
"The direct investment can increase if they see stock markets
growing so that even if they want to come out or release some of their funds,
they can do that on a transparent market, which is the DSE," he said.
He
said that if more foreign investors bring their money to DSE, it will increase
trading and subsequently increase sellers and buyers as well as better prices.
"Currently, the restriction makes most of the local stocks be
below the actual values in comparison to other stocks in the region or other
international stocks," he said.
An Investment and Research Officer at Orbit Securities, Mr Godfrey Gabriel, said it was unfortunate
foreign ownership in companies like Tanzania Breweries Limited (TBL) is already
exhausted and therefore, foreign participation is restricted despite higher
demand.
"The situation is triggering market players to start thinking of
uplifting foreign ownership threshold in listed companies from 60 per cent to
70 per cent or 75 per cent of which will make our market growth vibrant,"
he said.
CMSA Principal Public Relations
Officer Charles Shirima told 'Daily News' that the move would call
for amendment of the Capital Market and Securities Act, specifically the
foreign investors regulations.
"For such changes, there has to be amendment in regulations and
that means we have to submit a proposal to that effect to the ministry of
finance," he said. The Bank of Tanzania (BOT) regulations allow foreign
investors to hold up to 60 per cent of the ownership of a listed company.
Source: The Daily News,http://dailynews.co.tz, reported by Orton Kiishweko
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