DAR ES SALAAM Stock Exchange (DSE) is expecting to list two more financial institutions at main investment market in the second half of this year.
The banks, once accepted on the bourse, would raise the number of listed financial institutions from currently seven—four listed on enterprise growth market—to nine. Orbit Securities General Manager, Juventus Simon, said it was too early to name the banks as the processes were yet to reach the revealing stage.
“The two banks are coming, their IPO would begin anytime after the second half starts,” Mr Simon, who manages the biggest brokerage firm in term of market share, said.
Mr Simon said at least the second half is expected to be busy with the two IPO and listing which will uplift market activities and the number of products at the bourse. Dar es Salaam Stock Exchange has a total of 23 listed companies - 16 local and 7 cross-listed.
“Three or four IPOs a year is not bad for a market such as ours,” Mr Simon said, adding “it’s a good going.” The banking sector is leading on using the bourse to raise capital through equities or debt instruments unlike manufacturing sector that relies to the financial institutions. This shows that the country’s manufacturing sector has yet to understand the benefits of accessing relatively cheap capital via the bourse.
In most cases banks are selling bonds on the exchange and proceeds are used to lend the manufacture at higher rate. At the moment, the banks listed at the bourse claimed almost 43.75 per cent of 16 listed local equities, while industrial sector 37.5 per cent and service industry 12.5 per cent and service sector 6.25 per cent. In the first quarter of this year, Exim Bank floated a 10bn/-retail bond which was oversubscribed by some 200 per cent.
The bond had a green shoe of 5.0bn/- but ended up receiving 19.97bn/-. In January, Maendeleo Bank completed its right issue that geared to raise 3.0bn/- for expansion after putting 6.0 million shares on sale.
At the moment a 20bn/- first trench bond of National Microfinance Bank (NMB) is on offer and stock analysts expect an oversubscription. The bond total size is 200bn/-.
