EXPERTS: LOCAL INVESTORS HAVE BEEN SELLING THEIR STOCKS TO ACCUMULATE FUNDS FOR INVESTING IN VODACOM IPO

Financial experts say local investors have been selling their stocks to accumulate funds for investing in the ongoing Vodacom's IPO.

“Since Vodacom floated 25 per cent shares to the public, investors have been focusing on buying stocks from the telecom although the growth of our economy has slowed down a bit lately,” said Lina Maswi, Operations Officer with Tanzania Securities Ltd.

Vodacom’s Initial Public Offering opened on March 9 and will close on April 19. The company is issuing 560 million shares to the public at the price of Tsh 850 per share.

Analysts expect business to continue being slow on the DSE until then, but it could be stimulated by announcement of dividends by most companies this month.

“This is not a permanent situation on the Dar es Salaam Stock Exchange (DSE). We expect shares to rise by the end of this month as companies reach their financial year and thus announce their dividends. Investors tend to buy more shares during that time,” said Ms Maswi.

According to analysts, the leadership style of President John Magufuli has unnerved investors, with weekly turnover at DSE dipping by more than 95 per cent in the past two weeks.

Turnover fell to $813,128 last week, from $1.43 million the previous week; itself 90 per cent down from $14 million a week earlier.

The sharp fall came on the back of a ban on export of copper and gold concentrates, which the president wants processed locally in order to create jobs and earn the country more in foreign exchange.

On March 28, President Magufuli ordered the Controller and Auditor General to undertake a special audit of mining companies to determine if they pay their fair share of taxes, an extension of the protracted war with Acacia Mining over its tax compliance.

He later set up a special committee to determine the yield of minerals that would be derived from concentrates, in order to determine whether the mining companies declare their income on minerals appropriately.