Business

Precision Air shares appreciate at the bourse after lax IPO

PRECISION Air Services Plc (PAS) had a good start at the equity market recording a price increase of 42.11 per cent to 495/- from 475/- offered at the Initial Public Offer (IPO).

According to a weekly market commentary by Tanzania Securities Limited (TSL), the PAS counter last week traded 6,000 shares recording a turnover of 2.9m/-.

“It is a good start for the PAS to trade at the equity market but we hope the situation to pick up in January after the year end festive season,” said Juventus Simon, market analyst with Orbit Securities Company Limited during an interview on Wednesday in Dar es Salaam.

Mr Simon said most investors are currently on short leave for the year end festivals but have promised to show up early January that would make the trading of PAS shares vibrant.
It is just a week since when DSE listed the PAS which added a market capitalization value of 92.08bn/-.

This makes the total equity market capitalization at DSE to move up to 11,573.18bn/- comprising of 17 listed companies. A total of 7,056 investors took part in the IPO and the airline managed to raise 12bn/- or an equivalent of 43.18 percent most of which was taken by both local and corporate entities as intended by the firm.

The PAS offered 58,841,750 shares during the four-weeks of IPO, which represented just 30 per cent of 193,856,750 shares at the rapidly growing local airliner. And according to the company’s prospectus, 93.5 per cent of the net earnings were to be spent for capital expenditure, while 6.5 per cent would be utilised as working capital enhancement.

At the official listing event, PAS reaffirmed its commitment to enhance the performance and growth of the company to ensure realization of investors’ hefty returns to the capital injected.

“We are back to work and the task ahead is to enhance the performance of the airline in order to impress the present investors and attract new investments into the firm,” said Mr Michael Shirima, Board Chairman and Founder of PAS.

He said the number of Tanzanians who took part in the IPO is a true testimony of the trust and confidence the public has in the company. And most important of all are the investors who, with effect from today (Wednesday) event have become shareholder of the airline.