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Mkombozi share price up 50pc on first day of trading at bourse

Swissport Tanzania managing director Gaudence Temu rings a bell to symbolise the listing of Mkombozi Commercial Bank Plc on the Dar es Salaam Stock Exchange (DSE) yesterday. With him is the bank’s board chairman Masha Mshomba (second left), DSE chief executive officer Moremi Marwa (third left) and Capital Markets and Security Authority CEO Nassama Masinda.  PHOTO|SALIM SHAO

What you need to know:

  • A share of the bank was sold at Sh1,000 during the IPO but there were bids of up to Sh1,500 just after listing at 10.30am yesterday.

Dar es Salaam. Shareholders of  Mkombozi Commercial Bank (MCB) - who bought stakes during the initial public offering (IPO) last month - may have put on broad smiles as the commercial entity’s share price rose by 50 per cent during the first day of trading yesterday. 

A share of the bank was sold at Sh1,000 during the IPO but there were bids of up to Sh1,500 just after listing at 10.30am yesterday.

“Despite the fact that our IPO was subscribed by 75 per cent, we believe that the bank’s shares will do better in the market,” said board chairman Masha Mshomba.

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Mkombozi was looking for Sh5 billion, but received Sh3.7 billion to finance its expansion programme and improve its capital.

Mr Mshomba said performing under the target did not reflect performance of the bank or any other negative perception about it but was mainly due to the short time of the IPO.

He also dismissed allegations that the IPO may have been affected by the Escrow scandal for which the bank found itself entangled in.

The Catholic Church-owned bank was accused of being a money-laundering conduit where businessman James Rugemalira shared part of the money he earned from the escrow account with various individuals including current and past government officials as well as religious leaders. However, chief executive officer of Capital Markets and Securities Authority Nasama Masinda, said the regulator normally recommends three weeks of IPO to avoid investors’ money being idle for a long time.

“For us, 75 per cent subscription is a success. The bank still has a chance to sell more shares through rights issue if it needs to do so,” she said. The bank is now listed on the newly Enterprise Growth Market (EGM) Segment of the Dar es Salaam Stock Exchange (DSE), an alternative listing window with relaxed rules for small and medium-sized companies. It becomes the third firm to join the EGM after Maendeleo Bank which listed in November 2013 and Swala Oil and Gas which listed in August 2014.

However, there are efforts to attract more listing on the window.

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