Tanzania seen luring IPOs as state scraps foreign caps

September 26, 2014

Africa, Business, International

Tanzania seen luring IPOs as state scraps foreign cap

By Alawi Masare and Neo Khanyile
Bloomberg

Tanzania, which has Africa’s best-performing stock market, lifted controls on foreign-share ownership, making it more enticing for companies to consider initial public offerings.

The removal of restrictions on foreigners owning more than 60 percent of companies that trade on the Dar es Salaam Stock Exchange was published in a Government Gazette dated Sept. 19, Charles Shirima, spokesman for the Capital Markets and Securities Authority, said by phone today from the commercial capital, Dar es Salaam. Investors from the East African Community will also be allowed to buy as much as 40 percent of Tanzanian government securities, he said.

The 11-member Tanzania Share Index gained 73 percent in 2014, the most among 17 African gauges tracked by Bloomberg. Tanzania’s $33 billion economy, the largest in East Africa after Kenya, will expand 7.2 percent this year, according to World Bank estimates. The country has the most gas reserves in the region after Mozambique, spurring an investment boom, while its mobile-phone penetration rate of 60 percent leaves room for growth for operators, according to Renaissance Capital.

“We’re going to see more IPOs for sure because now companies are going to have access to international capital markets, which they haven’t had before,” Kwame Narh-Saam, head of sub-Sahara trading at Renaissance Capital, said by phone from London. “It’s quite a good story, they’ve got good growth that’s expected to be stable.”

The Dar es Salaam Stock Exchange, which has a market capitalization of 21.9 trillion shillings ($13 billion), is targeting a market value equal to 50 percent of Tanzania’s gross domestic product by 2017, Chief Executive Officer Moremi Marwa said in an interview last month. Finance Ministry Permanent Secretary Servacius Likwelile didn’t answer a call to his mobile phone seeking comment.
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Video: Tanzania to scrap limits on foreign share ownership

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Dar es Salaam Skyline
Dar es Salaam Skyline

Dar es Salaam Skyline

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