The Dar es Salaam Stock Exchange has said African Barrick Gold (ABG), part of Barrick Gold Group, has started the process of crosslisting its shares on the bourse.
DSE chief executive officer, Gabriel Kitua, said in an exclusive interview in Dar es Salaam that the development will see the number of crosslisted players rise to six.
Other crosslisted firms are Kenya Airways, East African Breweries, Jubilee Holdings, Kenya Commercial Bank, and the Nation Media Group.
“We have received application documents from ABG, they have completed some of the required procedures for crisslisting,” he said.
He said the DSE has processed the documents and advised the applicants accordingly.“They have made good progress. We are waiting for them to make final submission of the documents before we forward them to higher authorities for approval,” he said.
Meanwhile, for the purposes of encouraging security issuance, listing and development of capital markets the government through the Capital Markets and Securities Authority (CMSA) has granted fiscal incentives to issuers of securities.
It has reduced corporate tax from 30 percent to 25 percent for a period of three years provided that the issuer has issued at least 35 percent shares held by public.
The reduced rate is applicable for five years starting from the date of listing. The rationale for this incentive is to attract more listings, according to CMSA.
The other incentive is tax deductibility of all IPO costs for the purposes of income tax determination.
According to the authority, all IPO costs are accepted by the Tanzania Revenue Authority (TRA) as acceptable expenses used in the generation of income and profits, and therefore are taken into consideration when determining profit for tax purposes.
This incentive is meant to make IPO costs tax deductible and extends the benefits to investors. In this case withholding tax on investment income made by Collective Investment Schemes (CIS) is final tax.
Investors in CIS will not be charged tax on the income distributed by CIS after the scheme income taxation under the new arrangement.
The incentive is therefore intended to develop an interest in the DSE secondary market activities, according to the capital markets agency.
In addition, there is no stamp duty on secondary market trades involving listed securities. The incentive is also intended to develop an interest in the DSE secondary market activities.
Again under the new incentive arrangement, there is no tax on capital gain realised by selling listed securities. The tax on unlisted securities is 10 percent. Another incentive is reduction of withholding tax on dividend income from 10 percent for unlisted securities to 5 percent for listed securities. This incentive is intended to encourage investor participation in the bourse.
Reports say that initially ABG had indicated that it was going to complete secondary listing of its shares on the bourse at least by last month.
The company’s chief executive officer, Greg Hawkins, was quoted as saying his firm was still resolving some issues on how to synchronise the requirements of listing shares on the exchange with the London Stock Exchange.
"We are getting very close" to resolving the issues, he said, adding that the listing will not result in any capital raising since it’s cross-listing, which means investors will have the ability to buy African Barrick Gold's shares on either exchange.
The secondary listing is expected to provide more liquidity for the Dar es Salaam Stock Exchange and the firm’s employees will have the ability to invest in the company's shares. About 89 per cent of the company's 4,500 employees are Tanzanians.
Hawkins said that following the secondary listing, it might consider a listing in Johannesburg, the possibility of listing on the Johannesburg Stock Exchange is still "an open question," he said.
He said a listing on the JSE could potentially allow the company to attract an investor base that is restricted in terms of where it can invest.
SOURCE: THE GUARDIAN
No comments:
Post a Comment