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Tanzania: Sluggish Dar Bourse Records Revenue of $684,000
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The East African (Nairobi)
29 April 2008
Posted to the web 29 April 2008
Wilfred Edwin
Nairobi
The Dar es Salaam Stock Exchange (DSE) has recorded revenue of $684,000 for the year 2007 up from $462,000 recorded in 2006.
The revenue - comprising government subvention, listing fees and transaction fees - it is hardly a reflection of the bourse's own strength since $419,000 of it is government subvention - the highest in the past five years.
However, despite the existing financial constraints, the exchange managed to post a $16,000 profit compared to the loss of $76,000 made in 2006.
According to a business review by the chief executive officer Jonathan Njau, even though the DSE has grown steadily since its establishment, it has failed to reach its potential as evident from the limited instruments traded and lack of liquidity.
"The DSE developed a strategic plan in 2005 with the objective of increasing the products and investors but it was largely unimplemented due to lack of financial and other resources," said Mr Njau.
The DSE was incorporated in September 1996 under the Companies Ordinance (Cap. 212) as a limited liability company by guarantee without share capital. However, it began operations only in 1998. Even with a stepped-up campaign to raise awareness about its operations, response from the public as well as from businesses has been muted.
The were only two new listings on the DSE over the past year with Tanzania Portland Cement Ltd (Twiga) listed its ordinary shares in September, while Jubilee Holdings of Kenya cross-listed its shares.
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But Peter Machunde, chairman of the governing council, is optimistic that the DSE is about to grow. Last December, market capitalisation increased to $3.1 million from $2.5 million the previous year. The increase, especially during the last quarter of 2007 is attributed to appreciation of the prices of Twiga and Tatepa shares.
In September 2007, Twiga shares had appreciated to $0.14 from $0.08, recording an appreciation of 37.35 per cent. Tatepa shares appreciated to $0.05 from $0.04 of September 2007, an increase of 21.43 per cent.
There were limited bond trading activities on the DSE for the year 2006/07, as five trades involving treasury bonds valued at $27.29 million and two trades involving corporate bonds valued at $800,000 were recorded during the period.
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