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Mining firms urged to help change DSE share structure

4th January 2013
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  Nationals with shares in bourse only 220,000
  Currently there are 17 listed companies
Small scale miners wash earth as they sort gold at a mine in north western Tanzania. (File photo)

Mining firms have been advised to set aside a part of their shares to be sold to nationals through the Dar es Salaam Stock Exchange (DSE) in order to enhance good relationship between the firms and people as well as to stimulate the economy.

Chief Executive Officer of Orbit Securities Laurian Malauri said this calling other mining firms to let Tanzanians own shares in their companies.

According to him, doing so would stimulate growth of economy and increase the number of Tanzanians owning shares which currently does not exceed 220,000.
“We have several mining firms but have not listed their shares on the bourse, for their own reasons…. I think they have now started thinking of setting aside part of the shares to be sold to Tanzanians,” he said.

He said up to the moment there are no Tanzanians who own shares on the mining firm trading at DSE.
Malauri who is the DSE share broker, urged Tanzanians to participate in stock market civilities through buying shares of listed companies.

“There are a few Tanzanians who buy shares, we have to increase our sensitization campaign to increase the number,” he stated.
Malauri also urged profit making companies such as cellular network companies to list their shares on the bourse in order to make it more vibrant.
He said some privatized firms are making profit but there are no efforts being made to list their shares.

One of the objectives of establishing the Stock Exchange was to facilitate the privatization process of over 300 firms.
But, the reality on the ground shows that only seven privatized firms have been listed on the bourse.

The plan was for the public to own the firms through public listing on DSE after being privatized.

“We have a good number of profit making privatized firms which are not listed on the bourse without apparent reasons,” he said, adding that many developed countries are using their bourse for development activities.

According to him time has come for the firms to raise capital through the bourse for the nation’s development.
He outlined direct benefits of investing in the stock market as dividends, selling and trading stocks and using shares as collateral to access bank loans.

“This is a long-term investment that shareholders should focus their attention on for their own economic benefits,” he said.
Experts say the DSE should provide information and educate Tanzanians on the benefits of investing in the stock market.

“Trading at the DSE would benefit only a few people, especially those residing in Dar es Salaam. People from the rest of the country seem completely unaware of the significance of participating at the bourse,” he said.

Currently the bourse which has 17 listed firms offers zero capital gain tax as opposed to 10 per cent for unlisted companies; zero stamp duty on transactions executed at the DSE compared to 6 per cent; and withholding tax of 5 per cent on dividend income as opposed to 10 per cent.

SOURCE: THE GUARDIAN