Things that keep bourse activities low

Tuesday May 21 2019

DSE Chief Executive Officer Moremi Marwa.

DSE Chief Executive Officer Moremi Marwa. PHOTO|FILE 

By Mnaku Mbani @mnaku28 mmbani@tz.nationmedia.com

Dar es Salaam. The Dar es Salaam Stock Exchange (DSE) chief executive officer, Mr Moremi Marwa, has revealed things that keep the stocks market activities low.

He was speaking during the listing of DCB Commercial Bank rights issue over the weekend.

The share of the stock exchange in Tanzania’s GDP is just 10 per cent, compared with other neighbouring countries such as Kenya where the share is 60 per cent with more than 50 firms.

Mr Marwa said there is poor liquidity in the market as many Tanzanians do not have enough disposable incomes to invest in equities and securities market.

However, the market is currently dominated by foreign investors, who account for more than 80 per cent of the activities in both selling and buying shares.

The DSE reports have shown that during the absence of the foreign investors, the market activities always shrink.

The DSE report for the first quarter of this year shows that out of Sh37.3 billion turnover recorded during the first quarter of this year, Sh32.4 billion was injected by foreign investors through buying and selling Sh29 billion shares.

Even the current quarter, which ends next month, out of a total turnover of Sh6.4 billion recorded on May 17, foreign investors have injected Sh4.2 billion through buying and selling of Sh3.2 billion shares.

Mr Marwa said the other factor, which keeps DSE activities low, include a few listings, which limit the number of Tanzanians aspiring to invest in stock exchange.

Tanzania’s bourse was established two decades ago, but its activities have remained low. There are only 21 local companies listed with seven crosslisted.

According to Mr Marwa, the other factor, which keeps the DSE activities is few shareholders.

Currently, DSE has about 550,000 shareholders, who have invested in listed companies, compared with Kenya where they are edging closer to a two million mark.