Shares in Tanzania's CRDB Bank up 33 pct on listing

[Maxence Melo]

Shares of Tanzania's CRDB Bank rose 33 percent on listing on the Dar es Salaam Stock Exchange on Wednesday, after an initial public offering involving the sale of 18.8 billion shillings ($14.4 million) worth of stock.

The shares closed at 200 shillings having been offered at 150 shillings.

'Our listing is a sign of the success the bank has had in a long time,' said Martin Mmari, chairman of CRDB's board of directors, during the listing ceremony.

The IPO, in which 125.4 million shares or 7 percent of the total were sold, was oversubscribed by 170 percent. The investment arm of Danish development agency DANIDA offloaded a 5 percent stake, leaving it holding 22.6 percent of the bank.

CRDB, which says it is Tanzania's leading bank in terms of assets and loans, expects pretax profit to jump 19 percent to 71.43 billion shillings in 2009. It also sees net interest income rising to 106.15 billion shillings from 91.16 billion last year.

The bank will use the money raised in the IPO to expand its network from its current 58 branches, install automated teller machines and improve its IT infrastructure.

CRDB's IPO raises the number of stocks on the DSE to 15, of which four are cross-listed from neighbouring Kenya. It raises the market's total capitalisation by 600 billion shillings to 5.3 trillion, the DSE said.

Public interest in owning stocks in the nation of 40 million people has increased in the last few years, but the government says it is still too low.

'We still have few products listed on the DSE, we have a small investor base, the markets are to some extent illiquid,' said Jeremiah Sumari, deputy minister for finance and economic affairs.

Written by George Obulutsa

 

[Rufiji]

'We still have few products listed on the DSE, we have a small investor base, the markets are to some extent illiquid,' said Jeremiah Sumari, deputy minister for finance and economic affairs.

Written by George Obulutsa

It is only in Tanzania where a person can be a deputy Minister of Finance, and at the same time allowed to run a business as a stockbroker. This can simply be described as the zenith of conflict of interest. The deputy minister has a lot at stake in the Dar es Salaam Stock Exchange; therefore, it will be difficult for any astute person to believe what he has asserted. A lot of questions need to be asked before jumping into the minister's bandwagon. The following are some of the questions that we ought to ask ourselves:

First, is it possible for the deputy minister to use the inside information for his personal gains?

Second, as a stakeholder in that sector, is it possible for the deputy minister to use his clout, and more importantly inside information to stifle his competitor.

 

[Mulugwanza]

Rufiji: to adding on what you are saying, the Minister's Company (SOLOMON STOCKBROKERS LTD) was the Lead advisor of the IPO, one of the Minister's son is among the Manager's in the concerned Bank, the Minister is also a shareholder of the Bank. Where is corporate Governance in this transaction?

 

[Vakwavwe]

Rufiji: to adding on what you are saying, the Minister's Company (SOLOMON STOCKBROKERS LTD) was the Lead advisor of the IPO, one of the Minister's son is among the Manager's in the concerned Bank, the Minister is also a shareholder of the Bank. Where is corporate Governance in this transaction?

Duh!

Ndo yaleyale ya DECI ila yao kwa mfumo wa juu zaidi. Kama Waziri wa Fedha alifungua tawi la DECI ktk Jimbo lake unategemea nini?

Ni kutokujali au kutumika vibaya kwa madaraka. Si kweli kuwa hakujua kuwa taasisi hiyo ni haramu ila alifanya ili kuwafurahisha wapigakura bila kujali matokeo

 

[Mpita Njia]

Hii inanitia wasiwasi kuhusu CRDB. Kiwango hiki cha bei ya hisa zai ni kidogo sana. nachukulia mfano wa NMB, IPO yao ilikuwa nadhani kwenye Sh600 kwa hisa. Ikawa oversubscribed kwa kiwango kikubwa. CRDB wameanza na IPO ya Sh150.

Walipokuwa listed, hisa za NMB ziliuzwa kwa zaidi ya Sh1,000, CRDB bei yake ni Sh2000! Kwa kweli napatwa na hofu kuhusiana na profitability ya benki hii ambayo wengi wanaamini kuwa ndio kubwa hapa nchini.

 

[Rufiji]

Mulugwanza,

First and Foremost, let me begin by commending you for having the guts to call a spade a spade. Let me be clear as I can, I don't hold any grudge against the deputy minister or his business; however, I don't think it will be possible for the deputy minister to serve the two masters efficiently. That is the reason, I am skeptical of his assertion about CRDB's share

Second, it is the government duty to protect those who are vulnerable in our society. That is why the government must use everything at his disposal to regulate the stock market, and other financial institutions in order to protect the public's interest. Due to minister's conflict of interest, it will be a futile task to ask him to regulate his own business. This is similar to asking Abramonivich, Chelsea F.C owner, to referee the game between Chelsea and Manchester. In fact, this is not only a recipe for a catastrophic disaster but also a problem waiting to happen. Our laws needs to be changed in order to close these loop holes!