February 4th, 2010 by Tom Minney
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.
January 25th, 2010 by Tom Minney
A new fund is making good progress in raising up to US$55 million to be invested in business start-ups and small and medium enterprises in Kenya, Rwanda, Uganda, and Tanzania. The Fanisi Venture Capital Fund was set up with help from Norwegian Investment Fund for Developing Countries (Norfund) and incorporated in Luxembourg. Norfund is also an investor and a shareholder in the management company, Fanisi Capital Ltd.,,which is majority owned by Nairobi-based Amani Capital Ltd.
Fanisi has raised $40 mln in commitments and expects to reach its goal in the next 12 months. On 22 January, the Internatonal Finance Corporation (www.ifc.org), part of the World Bank group, announced it will invest $7.5 mln.
According to an IFC press release: “The fund plans to make investments between $500,000 and $3 million in a variety of sectors, ranging from manufacturing to technology, helping smaller enterprises and start-ups get the capital they need to create and expand businesses. It also will set up a business services support facility to help pipeline companies overcome technical and governance limitations, pre- and post-investment.”
It quotes Ayisi Makatiani, head of the fund’s investment team and CEO of the fund nabager: “IFC’s early and continued support to the Fanisi team has been extremely helpful, especially for a local and first-time fund management platform.”
IFC’s Gender Programme has agreed to support the business services facility, and IFC’s Rwanda Enterprise Development Programme will provide training support to the fund’s portfolio companies.
Haydee Celaya, IFC Director for Private Equity and Investment Funds, said, “IFC is investing in this local private equity fund that focuses in growing SMEs and startups at a critical time, when the region needs long-term financial and advisory support. The investment also will help build local fund management capacity.”
IFC is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by investing in private equity funds that target small enterprises in developing markets. Smaller enterprises are responsible for much of the job creation in the East African region.
December 17th, 2009 by Tom Minney
The curriculum of the Securities Industry Training Institute (SITI) has been launched in Kampala, Uganda. Its establishment in September and development have been funded by International Finance Corporation, the private sector investment arm of the World Bank, as part of its Efficient Securities Markets Institutional Development programme (www.ifc.org).
SITI aims to standardize training on a wide range of programmes on capital markets and investments, corporate finance, asset management, entrepreneurship, corporate governance and other related fields of study. Eventually, all brokers, fund managers and investment advisors will require certificates to operate.
Simon Rutega, CEO of the Uganda Securities Exchange (www.use.or.ug), launched the institute and says it will serve the East Africa trading market that is gradually being integrated. He is Chairman of the Board of SITI East Africa and other members are reportedly Rose Mambo (CDSC Kenya), Jonathan Njau (chief executive of the Dar-es-Salaam Stock Exchange), Robert Mathu (executive director of the Rwanda Capital Market Advisory Council) and Peter Mwangi (chief executive of the Nairobi Stock Exchange).
Future training programmes include training for board members of USE in February, and training for the media. Rutega reportedly said: “The intention is to have as many people trained as possible. The point there is also the integrity and standardization of the market.”
The institutions – Uganda, Nairobi and Dar es Salaam securities exchanges and Rwanda’s Capital Markets Authority agreed a standardized curriculum which will be administered by SITI.
According to Rwanda’s New Times newspaper, CMAC Operations Manager Celeste Rwabukumba says all practitioners will be required to have training by SITI to learn the rules and regulations of the industry: “This is a good development which will give market actors the understanding of the regional market, experience, how the business operates as well as the harmonization of the regional stock markets.” Rwanda has seven registered stock brokers companies which focus mainly on corporate finance, stock brokerage and advisory services among others.
According to the report, only Tanzania in the region has a certification programme.
August 22nd, 2009 by Tom Minney
Tanzania seems to be warming to the idea of linking the East African stock exchanges, in what could eventually be the development of a major regional market.
According to local media reports, Acting CEO of the Dar es Salaam Stock Exchange Mary Mniwasa said it is ready to join a software called Smart Order Router which links the securities exchanges of the East African Community member states. She is reported to have said the system will allow a stockbroker from the DSE, the Nairobi Stock Exchange and the Uganda Securities Exchange to see the markets and trade across borders without physically contacting a local market stockbroker.
The report quotes Simon Rutega, CEO of the USE, as saying Uganda fully supports the proposed integration of stock markets in east Africa. They have started using Central Depository Securities for holding securities and assisting in settlement.
The DSE and USE have long been dogged by lack of liquidity and outside investor interest. The newspaper cites a study by Codogan Financial & Associates, funded by the Efficient Securities Markets Institutional Development Initiative of the International Finance Corporation, part of the World Bank group. According to this, there are simply too few institutions and individuals who wish to invest in East Africa. The objective of the EAC stockmarkets integration is to enable consolidated EAC capital to flow and participants to operate freely across borders
The integration is being guided by an East African Securities Exchange Association, comprising the chief executives of the four exchanges – Dar, Nairobi, Uganda and Rwanda’s recently formed Over-The-Counter market. The original timetable was set in 2008 when the association resolved that a single clearing and settlement infrastructure was to be implemented within 3-6 months after January 2009. Senior members of the NSE are doubtful on progress.
One of the initiatives of the association is to integrate trading, clearing and settlement infrastructures within the EAC to facilitate a faster trading system within the bloc.
Tanzania has previously barred non-citizens from participating in initial public offers, such as when a 21% stake in the National Microfinance Bank was floated last year. In March 2008, it blocked its citizens from participating in the Safaricom IPO in Kenya.