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DSE suspends Jatu Plc for two months

DSE suspends Jatu Plc for two months

Dar es Salaam Stock Exchange (DSE) has temporarily suspended an agri-based firm—Jatu Plc from trading for two months to pave the way for the start-up's initial public offer.

The bourse said the suspension started June 1st and would last up to July 28th.

It plans to list 15,000,000 new shares.But in a statement released on Wednesday, DSE said the suspension was a decision reached after the regulator—Capital Markets and Securities Authority (CMSA) harmonization of Jatu’s corporation actions.

The action related to “share split for existing listed shares, price between primary market and secondary market and ongoing IPO,” DSE said.

The statement said all shares, following the share split for existing shares together with new shares subscribed during the IPO, will be credited electronically and deposited in the Central Depository System on July 29th to enable secondary trading.

Jatu General Manager Mohamed Issa Simbano said they have asked for freezing of the share trading to allow splitting of the shares which were traded when listed last November.

“The IPO price is 500/- a share, but we asked to freeze share trading to allow the split for existing listed shares,” Mr Simbano told ‘Daily News’ on Wednesday.

Normally when the firm splits its shares, the number of shares of that company increase, but the ‘market capitalisation’ remains the same and as the number of shares increases, the price per share goes down.

Orbit Securities Head of Research and Analytics, Imani Muhingo, said the suspension was ‘a well procedural’ since Jatu is an IPO from the beginning of this month.

“It’s self-defeating if the shares would still be trading in the secondary market” while others are in the primary market, Mr Muhingo told Daily News on Wednesday.

Jatu, the agri-based firm share was trading 1,200/- before the suspension on Tuesday against 420/- during listing late last November.

Vertex International Securities Ahmed Nganya seconded Mr Muhingo said the “temporary suspension was to allow for the IPO of new Jatu shares that take place” between 1st June and 15 July.

DSE said in a statement that the suspension following the guidance from Capital Markets and Securities Authority (CMSA) necessitate the harmonization of Jatu’s corporation actions.

The statement said all shares, following the share split for existing shares together with new shares subscribed during the IPO, will be credited electronically and deposited in the Central Depository System on July 29th to enable secondary trading.

Jatu runs and manages various agricultural projects in collaboration with its members. Agriculture is the main foundation and pillar of the company, where Jatu seeks areas or farms and researches them technically and legally.

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Author: DAILY NEWS Reporter

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