No EAC investor bought securities: bank

The report compiled by the EAC Committee on Legal, Rules and Privileges on the Assessment of Adherence to Good Governance said the union sui generis model was the best for the suit EAC.PHOTO|FILE 

By Veneranda Sumila, The Citizen Reporter

In Summary

• BoT announced in May that it amended  foreign restrictions on the locally listed equities and allow investors from the EAC states to buy up to 40 per cent of the issued risk-free securities

Bagamoyo. No investor from the East African countries has started buying government securities since the regulator lifted curbs on them in May, the Bank of Tanzania (BoT) announced yesterday.

Mr Paul Maganga, associate director for domestic markets at the central bank, said the regional investors might be studying the country’s requirement and procedures before entering the market.

“We believe that members of the EAC will come to participate in our government securities because we offer competitive interest rates compared with those of other EA members. We hope that they are delaying because they are currently working on the BoT procedures to meet the participation requirements,” he  told a media workshop here.

The level of interest rates in the Treasury bills in Kenya is estimated to be at 8 per cent while those of Tanzania are about 13 per cent, he said.

BoT announced in May that it amended  foreign restrictions on the locally listed equities and allow investors from the EAC member states to buy up to 40 per cent of the issued risk-free government securities. However, this could not take effect as the Capital Markets and Securities Authority (CMSA) had also a similar law that restricted foreigners.

CMSA published its relaxed rules on September 19, marking the end of the former restrictions.

“We want them to be rated by their financial institutions before we allow them to participate. I encourage individual Tanzanians to also participate in government securities and not to sit and wait for their EA fellow members to dominate the market once they start,” said Mr Maganga.

The removal of foreign restrictions also allows foreign investors to buy equities listed on the Dar es Salaam Stock Exchange as much as they want.

Formerly it was capped at 60 per cent