Exploit potential in stock exchange

CRDB Bank's Initial Public Offering on the Dar es Salaam Stock Exchange has closed, with a firm indication that it has been a tremendous success.

Just like previous IPOs on the Dar mart, the public response to the bank is impressive.

Official returns show the CRDB shares sale exceeding expectations by almost three times. The bank floated 125,429, 692 shares, which the public snapped up, with an oversubscription of a whopping 212, 699, 708.

It's good news for the bank, which has generated a total of Sh50.7 billion, exceeding by more than twice, its target of Sh18.8 billion. Nearly Sh32 billion will have to be refunded to those who had hoped to own a piece of CRDB Bank.

As happened when NMB Bank listed on the stock mart, Tanzanians are showing a real appetite for investment in shares. In other words, funds are available, which the people are willing to invest in ventures they consider profitable.

The NMB shares were oversubscribed by Sh177 billion. The sale of shares in other companies such as Unit Trust of Tanzania (UTT), Tanga Cement (Simba), Tanzania Portland Cement (Twiga), and Tanzania Breweries Limited also overshot expectations.

This begs the question, why do we keep on complaining about lack capital to invest and trade? By the share sale results alone, it is apparent that our planners are wrong. There is great potential out there to tap capital and involve ordinary Tanzanians in investment in various industries.

These opportunities will just go to waste unless those holding the money are assured of returns should they invest in such ventures.

But looked at differently, the NMB and CRDB success stories are a wake-up call on the local stock exchange. There is absolutely no reason why the Dar es Salaam mart should remain dormant with the kind of thirst that has been demonstrated by the public seeking to buy in shares in banks and other companies.

There is very little trade that goes on at the stock mart despite a reasonable number of companies being listed. The Dar mart is an avenue that if well cultivated and nurtured could provide immense trading opportunities for those who miss out on the shares during IPOs.

This is a challenge we must explore and entice more people to the trading floor. So far, it appears that those wishing to buy shares may just want to hold on to them instead of circulating them to build up capital and reinvigorate trading on the mart.