INVESTMENT COMPANIES REAP BILLIONS AT DAR ES SALAAM STOCK EXCHANGE

TWO investment management companies have earned over 100bn/- through NMB Bank Plc's share trading at Dar es Salaam Stock Exchange (DSE) last year.

Bank of Tanzania (BoT) said in its 2013/14 Financial Stability report that troubled NICOL shareholders made a whopping 86.46bn/- while those of TCCIA Investment Company Limited made 16.92bn/-.

"NICOL investment in NMB shares reached 86.46bn/- which give comfort to its investors that at least one investment is safe. TCCIA Investment Company Ltd net assets doubled as at end December 2013 when it increased from 8.36bn/- to 16.92bn/-, mainly due to appreciation of share prices of listed companies, the company has invested into," the over 40 pages report said.

The report further noted that turnover at DSE and participation rate during the year ending March 2014 increased with a sharp increase last December 2013.

The upsurge was attributed to the International Finance Corporation disinvestment in Tanzania Breweries Limited when it sold its shares amounting to 94.5bn/-. The Financial Stability report also said open ended collective investment schemes with the exception of Jikimu Fund, also experienced an increase in Net Asset Value (NAV) per unit during the period ending March 2014.

"The increase was mainly due to the appreciation of listed equities which form a large part of the schemes' investment," it stated.

Treasury bonds with different maturities worth 960.76bn/- were listed during the period under review being an equivalent to 6.4 per cent increase from 903bn/- which were listed during the corresponding period in 2013.

"On the secondary market, Treasury bonds worth 356.30bn/- were traded during the year ending March 2014 compared to Treasury bonds worth 339.98bn/- traded during the year ended March 2013," the report noted.

A medium term note worth 31.25bn/- was issued by way of private placement during the period with five outstanding listed corporate bonds worth 42.57bn/- compared to corporate bonds worth 79.67bn/- recorded in 2013.

"The decrease in the value of outstanding corporate bonds was a result of maturity of Tanzania Breweries Ltd corporate bond worth 37.1bn/- in August 2013," the report noted.

BoT Governor, Prof Benno Ndulu, said in a foreword message to the report that capital markets continued to grow on account of new listing and share price appreciation with the financial sector being the main driver of the growth.

"The Enterprise Growth Market (EGM), an equity market to cater for Small and Medium Enterprises (SMEs) and start-ups, was established in September 2013," Prof Ndulu wrote.

He pointed out that the EGM establishment enhances development potential for capital markets deepening and widening access to capital and fostering job creation and economic growth.

"During the year ending March 2014, regulatory framework was put in place to mitigate the potential risks arising from the new market segment," Prof Ndulu who is also Chairman of Tanzania Financial Stability Forum, noted.