Dar es Salaam Stock Exchange (DSE) share price rallied by 100 per cent to 1,000/- each yesterday immediately after self listing as was predicted. This was double the price offered during the initial public offer.
The share prices increased after 20 minutes of listing after going up by 60 per cent while demand and buying sides mismatched. By the time the market closed the session the bourse share had rallied to 1,000/- from 500/- of initial public offer (IPO) price.
The price was projected to surge based on enormous oversubscription of 377 per cent during IPO. The Minister for Finance and Planning, Dr Phillip Mpango, said the exchange plays a pivotal role on the economy and cautioned it should not lose sight of people who have invested on them.
"This self-listing is a critical milestone of DSE journey... for outstanding achievements," Dr Mpango said. The minister advised the bourse to introduce more products like exchange trading fund, close ended scheme, municipal bonds and technology enhancing to simplify accessibility.
"Also engage with the government on state owned enterprise to list... we are ready to list them," Dr Mpango said. He also suggested that DSE and Capital Markets and Securities Authority (CMSA) should intensify bourse education and awareness as majority of citizens do not know its operations.
"Let's join hands on educating people on the role of the exchange.... Together we will achieve a lot than individually. DSE Chief Executive Officer Moremi Marwa said the degree of IPO success came with a faith that investors have on the 18 years young bourse.
"This trust is not built in vain--it has its fundamental and sentimental basis--probably being cumulated in the past 18 years... (as a result) achieves some major milestones," Mr Marwa said. The DSE IPO subscription was almost five times than the amount targeted of 8.25bn/- plus green shoe option but ended receiving 35.77bn/-.
The bourse, later, got an approval from CMSA to raise the green shoe option to 35 per cent, thus taking 10.125bn/- after selling some 20 million shares. DSE refunded more than 26bn/-. Some brokers predicted DSE price appreciation on day one based on the oversubscription. Orbit Securities General Manager, Juventus Simon, said share price rallying of DSE at day one of listing was imminent due to the huge amount of oversubscription.
"Definitely price will appreciate," Mr Simon, whose firm was sponsoring broker of the IPO, said in an interview on Monday. Zan Securities CEO Raphael Masumbuko also predicted the share price to appreciate on the listing day as investors showed they were eager to buy the shares of the bourse.
"I predict share price appreciation... to what degree I can't tell on day one, but price will continue to pick thereafter since investors' appetite is high," Mr Masumbuko said.
The DSE self-listing completes a four-year journey of demutualisation process where the exchange became a company limited by share instead of board of trustees. It has become a third such exchange in Africa to demutualise after Johannesburg Stock Exchange and Nairobi Securities Exchange.
