New CEO for Dar Es Salaam stock exchange

A new CEO started work at the Dar es Salaam Stock Exchange (www.dse.co.tz) and share prices surged in the following days, although market participants denied any connection with the appointment.
The governing council of the DSE appointed 46-year-old Mr Gabriel Kitua, replacing Jonathan Njau, whose tenure has expired after serving 2 terms of 3 years each. Previously Mr Kitau was director of research, policy, planning and information technology for seven years at the Capital Markets and Securities Authority (www.cmsa-tz.org), which regulates the DSE. Peter Machunde, chair of the DSE governing council, was reported in local media as saying that the new CEO had the requisite skills and experience “to take the stockmarket forward in the next phase of its development.”
Share prices climbed in the following three days, but Orbit Security senior broker, Florian Kahabi was quoted in the press as saying: “There is no relation between the CEO’s appointment and trading at the market as it is driven by supply. January is back-to-school month and parents are disposing their shares to offset fees obligations.”
It is a paradox of that selling shares into illiquid markets that increased supply can lead to more trading and prop up prices.

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