High share prices, procedures slow sale of cross-listed firms on DSE

Dar es Salaam Stock Exchange (DSE)

By The guardian reporter

Dar es Salaam Stock Exchange (DSE)

High share prices and cumbersome procedures are slowing down purchase of cross listed companies at the Dar es Salaam Stock Exchange (DSE) warn financial analysts.

 

Speaking to this paper over the weekend financial analyst Seti Sanga said price of foreign company shares in the DSE are considerably high and would be buyers are deterred.

 

“The stock is expensive… it has reached up to 13,000/-per share for some companies and now nobody is buying,” he said.

Sanga went on to list other factors that are discouraging buyers to include prolonged procedures and lack of adequate information on the foreign companies. 

 

"When an investor wants to purchase a share from a cross listed company they first have to contact a local broker who then has to get an order from a foreign broker (where the company has been listed)” Sanga explained.

 

“This is a long back and forth procedure which in my view, many investors are not ready to go through with," he said.

 

The financial analyst said a key solution would be for cross listed companies on the bourse to improve their communication strategies to ensure potential investors are well informed of the companies and their market performance.

 

“Lack of information about the companies on the side of investors is a major problem…investors are more likely to buy share of companies that they are familiar with, so it is vital for companies to make sure that they are known,” Sanga urged.

 

There are at least 18 companies listed companies on the still infantile DSE, 12 of the listed companies’ se are Tanzanian based and owned while the remaining 6 are foreign cross listed companies and with exception to African Barrick Gold, the other five are all Kenyan companies. 

 

SOURCE: THE GUARDIAN