FORMER President Jakaya Kikwete has advised Dar es Salaam Stock Exchange (DSE) considering bringing back trading floor and increasing awareness. The ex-president said it does not sound well of having a bourse whose brokers are trading online from their respective offices.
“Ringing the bell to signifying the start of trading that has no floor does not sound well. Please find a new method that will accommodate trading floor as well,” Dr Kikwete said. He offered the piece of advice when officiating the relisting of NICOL share on DSE yesterday after seven years of delisting.
The share stared trading at 300/- yesterday up from 270/- that was recorded prior of delisted. But IPO price was 400/-. Dr Kikwete also said equity market stakeholders should also increase education and awareness campaign on the importance of investing on stocks as the society “is literary blind on the subject.”
“It adds a lot of weight by having a trading floor. The floor may assist on increasing stock activities awareness as well,” Dr Kikwete, who his administration pioneered the establishment of commodity exchange, said. Data showed that local market participants are less than 400,000 which were still low compared to the population.
However, DSE Head of Operations Emmanuel Nyalali told the former president that the bourse has bought two floors of Morocco Square developed by National Housing Corporation (NHC). “The new office will have a trading floor as well,” Mr Nyalali said.
The former president also said the capital markets and securities stakeholders should also spearhead a means of increasing number of items on the bourse. The bourse in the last two decades has attracted 28 firms of which 21 are local companies.
The 21 local equities firm has a total market capitalisation of 11tri/-. The market cap and daily trading, according to Dr Kikwete, was still low. “Listed companies are only 28 compared to thousands registered at BRELLA … I am not saying every registered company should be listed on bourse but increase the listing drive to make the exchange vibrant,” Dr Kikwete said.
However, the former president praised the strong leadership of capital markets and securities and DSE for driving and regulating the sector at highest level of professionalism. CMSA acting CEO Nicodemus Mkama said the delisting and relisting of NICOL share at DSE has become a study case for East African bourses under a watchdog of East African Securities Regulatory Authorities (EASRA).
Also, the NICOL experience selected as a case study for exchanges under Toronto Centre in Canada in collaboration with Monetary Authority of Singapore. Core Securities CEO George Fumbuka said the delisting and relisting of NICOL was unique as the team has to borrow some laws from Nairobi Securities and tailor made to suit the DSE.
“We extend the performance of the firm six years backward instead of normal three, since one cannot ignore the entire six years of NICOL delisting period,” Mr Fumbuka, who was part of the team to work on NICOL case, said.
The NICOL case at the end of the day is copied as the success story since regulators managed to safeguard interest of 30,000 investors of the firm most of low income bracket.