Marwa:Shilling fading in 2015 impinged on transactions at the DSE

16Mar 2016
Dickson Ng`hily
The Guardian
Marwa:Shilling fading in 2015 impinged on transactions at the DSE

FOREIGN investors’ activities and the general performance of the Dar es Salaam Stock Exchange market (DSE), as measured in market capitalisation was negatively affected in 2015 following the weakening of the shilling against the US dollar.

This was revealed by the bourse’s Chief Executive Officer Moremi Marwa in an interview with The Guardian. The paper had wanted to know what became of the state of the market following the country’s deteriorating shilling during the period.

In his response, Marwa wrote: “It is true that (foreign) investors’ activities and the market performance in general as measured in market capitalisation and indices in US$ terms was affected negatively following the weakening of the shilling against the dollar.”

He added: “Our market lost by 25 percent last year as measured in US$, while in Tanzanian shilling terms the market capitalisation and indices went down just by 7 percent. Meaning almost 18 percent loss was a result of the depreciation of the shilling.”

On the other hand, the CEO said that in order to intensify trade activities in the bourse so as to ensure financial inclusion, the market will continue to engage with potential and existing stakeholders in creating this awareness, underscoring the fact that the response hasn’t been as positive as we expected.

“Availability of products normally (or in some cases) creates the demand - in this context we will see more investors interested in the capital market products (such as shares and bonds) when more products are issued and listed in the exchange and also as the level of awareness increases. Through this process, the financial inclusion and an inclusive economic empowerment is created,” he observed.

According to him, trading activities in the Exchange is a result of availability of securities that have been listed versus the number of investors and amount of funds that is available for investment as well as the existence of the necessary fundamentals and economic factors that support such investments.

Marwa detailed that the availability of securities depends on the number of institutions that opt to use the capital market route to finance their enterprises and development projects (both from the private and the public sectors).

He said: “Currently this number is small and what we have been doing to sensitise, educate and create the necessary awareness about the benefits of using the capital markets space as financing options.

Figures at the bourse indicate that in 2015, the number of investors and traders at the exchange was about 450,000 compared with 250,000 in 2014, an 80 percent increase.More about the DSE, don’t miss tomorrow’s ‘The Banker’ pullout in which Marwa grants a full interview.

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