SWALA SHARE PRICE UP 20% ON LISTING DAY AT DAR ES SALAAM STOCK EXCHANGE

Former president Ali Hassan Mwinyi shakes hands with former minister for Finance Basil Mramba during the introduction of Swala Oil Company at the Dar es Salaam Stock Exchange (DSE) in the City yesterday.

Dar es Salaam. Investors of Swala Oil and Gas Limited that was listed on the Dar es Salaam Stock Exchange (DSE) yesterday had a chance to get a return of up to 20 per cent after each share appreciated by Sh100 on the first trading day.

After ringing the bell —  a sign of official listing — by former President Ali Hassan Mwinyi the share price increased from Sh500 during the initial public offering (IPO) to Sh600 at 10.30am when the market opened.

Some brokers said they had received bids of up to Sh700 per share.

The company, which conducts exploration in Kilosa and Pangani basins, is the first of its kind to go public in East Africa. Swala expected to raise Sh4.6 billion but the IPO was oversubscribed to Sh6.64 billion including the green-shoe option.

“The oversubscription is an indication that there is excess liquidity among the Tanzanian public looking for investment. Therefore, there is a need for more supply of equities,” said Ms Grace Rubambey, chairperson of the Capital Markets and Securities Authority (CMSA).

Swala is the second company after Maendeleo Bank to list under the newly established Enterprise Growth Market, an alternative trading segment for startup companies which do not meet requirements of the main trading platform.

Mzee Mwinyi was impressed by Swala’s decision to go public. “This model gives locals an opportunity to participate in the upcoming industry,” he said.

DSE chief executive officer Moremi Marwa said the bourse was working with CMSA to introduce municipal bonds.

The Citizen