Anxious Vodacom investors reassured

Dar es Salaam. The Capital Markets and Securities Authority (CMSA) has allayed investors’ anxiety over Vodacom Tanzania’s initial public offering (IPO), saying their money is safe.

CMSA spokesperson Charles Shirima told The Citizen on Monday that local investors who bought shares during the first round of Vodacom’s IPO should rest assured that their money was in safe hands and that they would be issued with share certificates on the first week of next month.

“Investors have no reason to panic. Everything is going on well. Printing over 40,000 share certificates requires adequate time. In fact, printing has already started and investors will be issued with their certificates during the first week of August ahead of the listing of Vodacom Plc’s shares at the Dar es Salaam Stock Exchange on August 15,” Mr Shirima said.

Vodacom’s IPO was launched on March 9 and was earlier planned to close on April 19 ahead of the company’s listing at the DSE on May 16.

However, the share sale was extended for three weeks to May 11 and listing was rescheduled to June 6.

As the new deadline drew closer, Parliament passed the Finance Bill, 2017, which had sought the amendment of Section 26 of the Electronic and Postal Communications Act, 2010 to allow foreign investors to take part in telecommunication companies’ IPOs.

The amendment necessitated another extension of Vodacom’s IPO for ten working days, leading to anxiety and confusion among first-time investors. Some analysts have said the situation could have an adverse effect on the performance of the telecom firm’s shares after its listing on the stock market.

“There has been palpable frustration among local investors who have been waiting for over seven weeks since the IPO first closed. They have been flocking to CMSA offices to seek information and reassurance, but no definitive answer has been forthcoming. This might create public mistrust and affect telecom firms that will list in the future,” said a broker who asked not to be named.

Twenty-six-year-old Zainab Juma, who is a University of Dar es Salaam student, said she bought shares worth Sh170,000 three months ago, but was still in the dark as to what will happen next. Her biggest worry is that she could lose her money. She said she invested in Vodacom shares after she saw Prime Minister Kassim Majaliwa buy them on television.

“I have been to CMSA offices twice, but they keep telling me to wait without providing any information about when exactly I will receive my share certificate,” Ms Juma said.

But Mr Shirima said the extension of the IPO did not mean that local investors would be treated differently from their foreign counterparts.

“The extension was a good thing for the DSE. It will stimulate trading since the participation of foreign investors is important in ensuring that the local stock market remains active...there is no reason to worry. The decision was made in good faith, and we all stand to benefit,” he said.

Vodacom Tanzania Plc managing director Ian Ferao said the company was looking forward to welcoming new investors. “We are pleased that our efforts have resulted in over 40,000 retail subscribers participating in the stock market, many as first-time investor. This is unprecedented to say the least,” he said.