STOCKBROKERS have hailed the government plans to amend a telecom act in a bid to allow foreign investors during primary offers. The players said the intention was good to the people and the economy and would help to enhance integration of the EAC economies.
Zan Securities Chief Executive Officer, Mr Raphael Masumbuko said the government has heeded stock players call to incorporate outside buyers especially in EAC and SADC in primary offers.
“This is a good move especially on East African bloc cooperative spirit…since we stand as one,” Mr Masumbuko told the ‘Daily News’ yesterday. Winding up a budget debate for 2017/18 in Dodoma, the Minister for Finance and Planning, Dr Philip Mpango said they will amend the Electronic and Postal Communications Act (Epoca) 2010 probably through the 2017/18 Financial Bill to allow foreign investors to participate in IPOs.
Currently foreign investors are not allowed to participate in the IPOs. Orbit Securities Managing Director Simon Juventus said the move would further open up the Dar es Salaam Stock Exchange to the world by bringing more players during IPO.
“The main issue is to give local investors a priority during allotment, then EAC and others. “This procedure, of giving local investors an upper hand, is better to be directed by treasury or capital market authority,” Mr Juventus said.
The brokers concern and thumping up the intention based on the fact that there some 80 firms lined up to offer IPOs following the telecos Act of 2010. Market players were urging that local investors are not liquid enough to buy all those shares once they go for primary offers.
Stockbrokers feared the good government intention as stipulated in EPOCA 2010 would not materialise. The phenomenal was seen at a recently ended Vodacom IPO that was under subscribed compelling market regulator to extend the offer for three more weeks.
Vodacom wanted to raise 476bn/- at a price of 850/- a share but ended the first six weeks struggling to warrant three more weeks. Almost a month after the IPO closure, the results are yet to be announced.
Under the law telecommunication companies are required to offload 25 per cent of their shares for the public through Dar es Salaam Stock Exchange.
Currently three other firms, Airtel, Tigo and Maxcom Malipo have presented prospectus to the regulator According to Tanzania Communications Regulatory Authority (TCRA) 86 tele-firms are required to list at the DSE.