Tuesday 19 August 2014

Tanzania Readies Rules to Open Stock Market to Foreigners

Tanzania is studying a proposal by the country’s stock market regulator to scrap limits on foreign share ownership, providing a further spur to Africa’s best-performing stock market.
“We hope it will come anytime soon,” Charles Shirima, a spokesman for the Dar es Salaam-based Capital Markets and Securities Authority, said in e-mailed response to questions yesterday. “The likely impact is increased foreign participation in our market, which is expected to increase liquidity and make the market more attractive to issuers as well as investors.”
Foreign ownership of listed companies on the Dar es Salaam Stock Exchange was capped at 60 percent to protect and
encourage local participation, Shirima said. The benchmark Tanzania Share Index gained 50 percent this year, the most among 17 gauges on the continent tracked by Bloomberg. Foreign investors account for about 23 percent of turnover on the bourse and are “playing an important role” in trading, he said.
Proposals put forward by the authority will also allow investors from outside East Africa to buy as much as 40 percent of securities issued by government, Shirima said. The regulator expects the amendments to be implemented before the end of the year, he said.
The Dar es Salaam Stock Exchange is targeting a market value equal to 50 percent of Tanzania’s gross domestic product by 2017, Chief Executive Officer Moremi Marwa said in e-mailed response to questions. It expects three initial public offerings by the end of its fiscal year through June 2015, two of which will be on the Enterprise Growth Market and the other on the main exchange, he said.
Servacius Likwelile, permanent secretary at the Finance Ministry, said he wasn’t immediately able to comment when reached by phone.

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