THE Dar es Salaam Stock Exchange (DSE), is walking closer to become third exchange in the continent to de-mutualise. The demutualisation or self-listing is a process through which any member-owned organisation becomes a shareholder-owned company.
Frequently, this is a step towards the initial public offering (IPO) of a company. DSE operates as a ‘mutual’ exchange. The DSE Chief Executive Officer, Mr Moremi Marwa said the bourse was walking closer to follow Nairobi Securities Exchange and Johannesburg Stock Exchange which have demutualised.
“We, at the DSE are in the middle of a demutualisation process, being the third Exchange in Africa to achieve what we have achieved this far,” Mr Marwa said in statement. However, the CEO said, other Exchanges in Africa are also seriously considering this option.
“Out of the current 25 exchanges in Africa, more than dozen are positively considering to initiate the process of demutualisation,” Mr Marwa said. The CEO said the demutualisation has many advantages including enhancement of corporate governance within the exchange for sustainable protection of all its stakeholders.
And an access to the efficiently priced source of funds to finance the exchange’s growth and capital markets development in the country, including capital investments in trading technologies as well as introduction of new products and services.
Also demutualisation is responding to the increased competitiveness within regional financial markets centres in relation to finance and investment choices and allocations. “Consequently across the globe stock exchanges are now re-thinking their business strategy and models in order to find ways of how best to survive”.
In the process, exchanges have evolved towards new corporate, legal and business models to strengthen governance and face competition. After completion of self-listing process, the DSE will be known as Dar es Salaam Stock Exchange Public Limited Company (PLC).
Stock self-listing is a new drive, which started in 1993 when the Stockholm Stock Exchange was the first exchange to demutualise, followed by Helsinki (1995), Copenhagen (1996), Amsterdam (1997), the Australian Exchange (1998) and Toronto, Hong Kong and London stock exchanges in 2000.
In Africa, the first to make a self-listing move was the Johannesburg Stock Exchange in 2005, followed by the Nairobi Stock Exchange 2014. Others, such as Mauritius Stock Exchange, have started the process.
