Dar bourse IPO plans whet investors’ appetite

DAILY NEWS Reporter

THE Dar es Salaam Stock Exchange initial public offers is expected to hit a jackpot as both short and long term investors have already shown insatiable appetite.

Some stockbrokers said as the IPO enters its final week, demand for the bourse shares started to soar and they expect to sale thrice the amount sold in the first two weeks of the exercise.
Orbit Securities General Manager, Juventus Simon said the demand since day one of IPO was good after the would-be-investors understood the bourse revenue generation philosophy.
“They (investors) have understood well DSE’s income philosophy. The selling trend is going at pleasing pace,” Mr Simon said “we expect good subscription.” Orbit Securities is the sponsoring broker of the IPO that paves the way for the demutualisation process.
DSE will be the third exchange in Africa to self-list after Johannesburg and Nairobi. Mr Simon said previously many investors failed to understand income source of DSE thinking it may raise conflict of interest with other listed firms.
“But we have educated them that the bourse income is much separate from the listed firms…that the exchange generates its revenue by collecting various fees,” Mr Simon said. The DSE has mainly three business segments namely listing fees, transaction fees and other stock exchange related services such as data selling.
The bourse currently wants to raise 7.5bn/- through initial public offer, with a green-shoe of 5.0 per cent. The exchange offered 15 million shares to public at 500/- each.
Zan Securities Chief Executive Officer Mr Raphael Masumbuko said going by those came to ask and buy for the DSE shares ‘oversubscription is imminent’. “The name itself (DSE) assists on selling of the share.
Since DSE champions for transparency self-listing implies that the exchange will be crystal clear on their activities,” Mr Masumbuko said. He added: “investors anticipate more companies to list on the bourse in near future.
This move will increase gross revenue generation, then big return.” Mr Masumbuko said some investors thrust to buy share based on the success of Nairobi Securities Exchange and Johannesburg Stock Exchange self-listing.
“People (investors) know how successful these exchanges have been after listing thus pegging the same on DSE,” he said. Already, DSE is expecting a hefty profit next year as the performance and activities of the bourse continues to increase.
Earlier, the bourse CEO Mr Moremi Marwa told the ‘Daily News’ that the projections of the remaining nine months of this year suggest a profit of 1.4bn/-.
“We anticipate a profit rise next year…since prospects are good,” Mr Marwa said, without mentioning the actual estimated profit figure. DSE, in 2014/15, posted a profit of 1.94bn/-, while from July 2015 to March 2016 the bourse registered a net income of 1.74bn/- and revenue was 3.41bn/.
In the near future the bourse envisages introducing five new business products in collaboration with Capital Markets and Securities Authority (CMSA).
The products, both for capital raising and for risk management purposes, are Real Estate Investment Trust, futures and derivative, Exchange Traded Funds (ETFs), closed ended collective investment schemes and municipal bonds