A share for Vodacom Tanzania (Voda) has dropped by 9.4 per cent during the past three weeks to send losses to investors who bought the equities during the Initial Public Offering (IPO).
The firm’s share, which went for Sh850 during the IPO period, is now trading at a weighted average price of Sh770 at the Dar es Salaam Stock Exchange (DSE).
This suggests that one - who bought a total of 1,000 shares at a total cost of Sh850,000 during the IPO period and decided to sell them yesterday - may have lost at least Sh80,000 during the period.
Signs that the price for Voda share would go down started to show during the first of the firm’s trading at the DSE on August 15 when the price rose by a mere 5.88 per cent to trade at Sh900.
But analysts are of the view that the situation would change as soon as investors complete analyzing the market trends.
“Currently, investors are still analyzing the market trends. This may take up to two weeks after which, the price may either rise or fall,” the general manager for Orbit Securities, Mr Juventus Simon, said a few weeks ago.
Vodacom became the first company to comply with the Electronic and Postal Communications Act (Epoca) of 2010 - and its various amendments - which required telecommunication firms to offload 25 per cent of their chares to the community via IPOs.
Vodacom this issues what came to be the largest IPO in the history of Tanzania by raising Sh476 billion. Over 41,000 Tanzanian investors – both retail and institutions - subscribed 60 per cent of the company’s 560 million shares offered and the remaining 40 per cent were all taken by South Africa’s PIC which became the underwriter after the offer was extended the second time.
On Monday, the Voda counter transacted a total of 6470 shares at a weighted average price of Sh770, market data show.