Tanzania Banking Showcased on Dar es Salaam Exchange

The Tanzania banking industry has listed its largest and most successful bank at the Dar es Salaam Stock Exchange (DSE).

Last week, the National Microfinance Bank (NMB) became the second bank to list its shares at the DSE, bringing the total number of listed companies to 13, of which ten are local listings and three are cross-listed entities from Kenya.

The bank’s shares, which are worth Sh 63 billion, were made available for public subscription and drew heavy interest from locals who quickly took control over the 16% stake that had been reserved for them, thus raising over Sh 225 billion and creating an over-subscription rate of more than 300 per cent.

At a ceremony before the start of the trading day, chairman of the DSE governing council, Peter Machunde said that “the oversubscription is a pointer of the investment potential in the country.”

The buying price for shares of NMB was listed at Sh 1,020, which is an increase of Sh 420 from the Initial Public Offers price.

Shares in NMB jumped 70 percent during its first day of trading and, at the close of the day, the bank had recorded a total turnover of Sh 351.6 million from 186 deals.

The listing of the NMB has boosted the DSE index by 147.73 points compared with previous trading and closing with a final index of 1,236.13.

In addition, this listing has also raised the Tanzania market capitalization from Sh 3.39 trillion to Sh 3.69 trillion and has also brought in new investors.

Stockbrokers have predicted further increases in the price for shares in NMB because of the high interest in the bank from new investors.

According to Dr. Abdiel Abayo, the acting chief executive officer of the Capital Markets and Securities Authority (CMSA), the listing of the National Microfinance Bank at the DSE and has opened the doors for other banks to do so as well.

“The list of NMB has now paved the way for other banks to come to DSE for listing [and] we are expecting the NBC Bank, KCB Tanzania as well as CBRD to follow soon,” he said.

Dr. Abayo told Reuters that KCB has already submitted an application to cross-list and he is hoping that they will have gotten through it within two or three weeks.

“Maybe in one month’s time they will be cross-listed,” Dr. Abayo told Reuters.

In addition, Dr. Abayo also told Reuters that CRDB shareholders have already approved plans to list.

“They have appointed people to help them with the process and they hope the listing will be in next April,” he said.

Dr. Abayo said that the success of the initial public offer for shares in the National Microfinance Bank has served as an indication that capital markets is now in the position to play a central role in facilitating the mobilization of financial resources for economic development.