The Dar es Stock Exchange (DSE) has started selling its shares to the public as part of a wider regional capital markets reform programme seeking to improve corporate governance and boost activities on the East African bourses.
DSE is offering 15 million new shares to the public at a price of Tsh500 ($0.22) per share, with plans to raise a total of Tsh7.5 billion ($3.35 million) upon full subscription.
The proceeds of the share offer will be used to upgrade the bourse’s core operating system, introduce new products and services and finance the company’s day-to-day operations.
The offer opened on Monday (May 16) and closes on June 3, 2016.
The new shares will be self-listed and start trading on the DSE on July 12, 2016.
According to the offer’s prospectus DSE’s demutualisation (transfer of ownership from members to shareholders), capital raising and self-listing is in line with Tanzanian government’s intention to strengthen the private sector to be able to play a key role as the engine of economic growth and social–economic development.
“This process also aims at widening the financial inclusion among Tanzanians and economically empowers local citizens,” said Pius Maneno, chairman DSE.
DSE has 23 listed companies as at March 30, 2016 and its demutualisation will make the Tanzanian bourse the third exchange in Africa after Johannesburg Stock Exchange (JSE) and Nairobi Securities Exchange (NSE) to separate its ownership from the trading rights.
With demutualisation, it will no longer be necessary for a trader to become a member of the exchange in order to operate as a broker.
DSE demutualised by separating its ownership from the trading rights of the members, and changed its name to Dar es Salaam Stock Exchange plc. on June 29, last year.
The NSE self-listed in September 2014, after a successful IPO in which 63 million shares were offered to the public, raising Ksh627 million ($6.14 million), while a study on the demutualisation of the Uganda Securities Exchange (USE) was completed in 2014.
Demutualisation of the regional exchanges is widely expected to be a major boost to the efforts towards implementation of a unified capital market within the East African community (EAC).