In Summary
Vodacom, which trades as Voda, transacted only 1,700 shares at a weighted average price of Sh900 per share in six deals to contribute a measly Sh1.53 million to the Sh6.463 billion turnover at the Dar es Salaam Stock Exchange (DSE).
Dar es Salaam. Vodacom Tanzania started its first day of trading on a lacklustre note yesterday as its share price increased by only 5.88 per cent against expectations that the firm’s listing would stimulate the stock market.
Vodacom, which trades as Voda, transacted only 1,700 shares at a weighted average price of Sh900 per share in six deals to contribute a measly Sh1.53 million to the Sh6.463 billion turnover at the Dar es Salaam Stock Exchange (DSE).
During Vodacom’s initial public offering (IPO), its shares were sold for Sh850 each.
With institutional investors – both local and foreign – controlling 93.9 per cent of Vodacom’s 25 per cent stake, which had to be offloaded in line with the law, it became apparent that they (investors) would employ a wait-and-see approach before issuing their shares for sale.
“Currently, investors are still analysing market trends. This may take up to two weeks after which the price may either rise or fall,” said Orbit Securities general manager Juventus Simon.
A total of 30,297,465 shares changed hands at the DSE yesterday, with CRDB Bank stealing the show.
The bank – the largest in Tanzania in terms of assets – transacted a total of 30.3 million shares at a weighted average price of Sh205 to contribute Sh6.2 billion, or 95 per cent of the day’s turnover.
Gracing Vodacom Tanzania’s listing on the DSE yesterday, Finance and Planning minister Philip Mpango said the government would not hesitate to act against telecommunication firms that would fail to abide by the Electronic and Postal Communications Act, 2010 and its various amendments.
“The government will not hesitate to take to task companies which will not abide by the law which requires all telecommunication firms to offload 25 per cent of their shares to the public before their subsequent listing,” he said.
Tanzania Communications Regulatory Authority (TCRA) director general James Kilaba was recently quoted saying that suspension or cancellation of licences were among measures that would be taken against telecommunication companies that would not comply with requirements of the law.
Dr Mpango called on the remaining seven telecommunication companies that have not completed the process of listing their shares to cooperate with capital market experts to prepare their prospectuses ahead of the opening of their IPOs.
“It is our responsibility as the government through CMSA to oversee, coordinate and develop the capital markets sector in the country,” noted Dr Mpango.
The listing of Vodacom Tanzania yesterday made it the first telecom company in the country to have attained that status.
Two other firms – Tigo and Airtel – have submitted prospectuses ahead of their envisaged listing, according to the Capital Markets and Securities Authority (CMSA).
DSE chief executive Moremi Marwa was optimistic that the listing of Vodacom would significantly increase the bourse’s market depth and liquidity. “Because of this, our market capitalisation will increase by almost Sh1.9 trillion to reach about Sh20 trillion,” he said.
Mr Marwa added that equity-based listed companies would increase to 26, while the customer base would expand by about 40,000 investors.
Vodacom Tanzania managing director Ian Ferrao said the company was committed to growing further so that new and existing shareholders could benefit from their investment.
“I want you and the Prime Minister who bought shares to make money…it sounds easy on paper, and luckily Vodacom has a superb leadership team that will strive to make this happen,” he said.
Mr Ferrao added that the company would continue to build on success, strive for new innovation and look for opportunities to consolidate its market leadership position.
Plans, he added, were also underway to invest in broadband technologies in line with the company’s vision to lead the country into the digital age and change lives through technology.
There were fears that Vodacom shares might be affected when they start trading in the secondary market on the grounds that institutional investors, who acquired 70 per cent of all shares bought in the primary market, are usually reluctant sellers.
Responding to the concerns, Mr Ferrao said there was no need to worry, as the 30 per cent of shares bought by retail investors could be sold quickly.
“Higher demand than supply in the market is good for investors as the per share price would go higher and enable them to earn more profit.”
The Citizen
No comments:
Post a Comment