DSE Price Updates

                              TOL 330.00     TBL 1,800.00     TTP 510.00     TCC 1,640.00     SIMBA 1,780.00     SWISSPORT 650.00     TWIGA 1,340.00 -20.00     NICOL 305.00     DCB 360.00     KA 1,500.00     EABL 2,000.00     JHL 5,860.00    
LAST UPDATE: 24/9/2008 - 5:58PM EAT

Saturday, August 2, 2008


Dear Forum Memmbers and fellow Tanzanians,
Some of you may already know this, but most Tanzanians don't. The Government is planning to sell 21% of the 51% of the NMB shares it holds. The Initial Public Offering, IPO is expected to take off before September 2008.

Currently, the shareholder profile for NMB is:

  1. The Government of the United Republic of Tanzania 51.0%

  2. RABO Bank 34.9%

  3. National Investment Company Limited (NICO) 6.6%

  4. Exim Bank Tanzania 5.8%

  5. Tanzania Chambers of Commerce Industries and Agriculture (TCCIA) 1.7%

(Source, NMB Website)

For more information read http://www.ippmedia.com/ipp/guardian/2008/05/26/115169.html.

Only Tanzanian citizens and Tanzanian owned institutions are allowed to bid for shares during the IPO. The aim is to enable Tanzania to take ownership of private companies that were previously stated owned. Once the stock gets listed on the DSE then it is fair game for everyone.
It is sad that most Tanzanians are still in the limbo in regards to the NMB shares. THe NMB IPO has been talked about for a while, but it was not common knowledge to most Tanzanians; even those working in the financial sector, while our neighbors in Kenya were already talking about obtaining these shares as early as May, 2007. Just read

It is high time Tanzanians became more informed about such important things in our country's development and economy, and show we can compete in the EAC. Our Kenyan friends have even gone as far as mocking us and accuse us of xenophobia because of the restrictions imposed on the IPO. So let us make full use of this opportunity; disseminate this information widely!!

Wednesday, July 30, 2008

How to Price Shares

An esteemed member of our forum who goes by the alias Mdau #1 recently inquired about the IPO on 21% of NMB shares held by the Government and the availability of NMB's Financial Statements.

This got me thinking, it would be nice to have a discussion on how shares are priced. This knowledge would help prospective Tanzanian investors to make informed decision about whether the stock of a companying they have been eyeing is overpriced, underpriced or fairly priced.

There are a few concepts involved in share pricing. Such as the book value of a company (total assets - total liabilities) -- this is the "true" value of what the company is currently worth; the intrinsic value (the NPV of the company's expected future earnings) -- this is the perceived market value of the company; etc.
A fundamental theory of in all of these concepts is the "Theory of No Arbitrage"; one of the most basic theory in Financial Economics (and indeed all of Economics). In layman terms, this theory asserts that there is no free lunch, i.e., an investor should not be guaranteed expected net profit with 0 initial investment. Ofcourse, this all relies on the assumption that investors are rational beings and they always seek to make profit.

I hereby call on forum members to share their knowledge on how valuers come up with a decision on how much should the price of a share of a particular company be sold for during IPO. And how can investor tell if this is a reasonable price.

Tuesday, July 29, 2008

KP Cartoon

Courtesy of Ali Masoud "Kipanya" (KP): http://www.kipanya.co.tz

Starting your own Business

Over the years, I have come across a few Tanzanians who all claim to have plans to start their own business some day. It is unfortunate though, that when it comes to starting your own business, most Tanzanians have no idea where to start.

I therefore decided to share this bit of information with you today:

The 1, 2, 3's of starting a business in Tanzania

The document above outlines all the las you need to consult depending on the type of business you want to start; the amount of capital needed; application forms and legal documents to be submitted, etc.

The following websites may also be of use depending on whether you are interested in starting a financial services firm
  1. Capital Markets and Securities Authority -- Legislation

  2. Banking and Financial Institutions Act

  3. Insurance Supervisory Department -- Insurance Act & Regulations

  4. Insurance Supervisory Department -- Registration/Licensing requirements

  5. Tax Laws Administered by TRA

  6. Tanzania Investment Act

  7. Auditors and Accountants (Registration) Act