The Citizen (Dar es Salaam)
Mnaku Mbani
6 November 2008
The National Microfinance Bank (NMB) listed its shares at the Dar es Salaam Stock Exchange yesterday with a buying price of Sh1,020, an increase of Sh420 to the Initial Public Offer's price.
NMB, which is the second bank to list its shares at the DSE's secondary market, recorded a total turnover of Sh351.6 million from 186 deals at the closing session of its first day of trading at 11.50 am.
However, the bank's share trading experienced a weak supply than it was expected by buyers, as most of the investors are reluctant to release their shares in an early stage.
The listing of the bank has therefore given exit mechanism to existing shareholders amounting 20,264 and give an entrance chance to those who failed to participate during the IPO in August and September.
The bank's share started with the minimum price of Sh900, but existing investors kept on increasing the price. But until the trading was closed, they offered share at a maximum price of Sh1,200.
The listing of NMB to the Dar bourse brings a number of listed companies to 13, with ten being local listings and three cross-listed entities from Kenya.
It has also raised the DSE market capitalisation from Sh3.39 trillion to Sh3.69 trillion. The bank's listing has also brought new investors.
Stockbrokers said they predict further increase in NMB share price, as the new investor's appetite was so high, givn the prospects that NMB was the most profitable and biggest bank in Tanzania's banking industry.
The listing of the NMB shares has also boosted the DSE index as it closed at 1,236.13 yesterday, a record increase of 147.73 points compared with the previous trading.
"The list of NMB has now paved the way for other banks to come to DSE for listing," said Dr. Abdiel Abayo, the acting chief executive officer of the Capital Markets and Securities Authority (CMSA).
"We are expecting the NBC Bank, KCB Tanzania as well as CBRD to follow soon."
He said the success of NMB initial public offer was clear indication that the capital markets can now play a pivotal role of facilitating mobilization of financial resources for economic development.
The bank's shares worth Sh63 billion were made available for public subscription, raising over Sh225 billion, an oversubscription of more than 300 per cent.
Mr. Peter Machunde, chairman of the Governing Council of the DSE said Sh176 billion had to be refunded despite the fact that the Government still has shares in NMB that could have been offered to investors.
"Indeed, refunds have negative impacted on investors morale to invest through our stock market," he said.
"We at the DSE, are appealing to the Government to off-load its remaining stake in NMB (30 per cent) to the public as soon as possible."
The NMB board chairman, Mr. Meshack Ngatunga, said the listing of the bank share on the bourse was a result in a substantial increase in number of shareholders, from five shareholders namely the government, Rabo Bank, Exim Bank, TCCIA and Nicol to over 27,000.
"We take this opportunity to welcome them on board one of the largest and most successful banks in Tanzania," he said. "We also count their royalty and contribution to further prosperity of the bank."
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