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BoT bars Tanzanians from buying Safaricom shares

Discussion in 'Jukwaa la Siasa' started by BAK, Apr 11, 2008.

  1. BAK

    BAK JF-Expert Member

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    BoT bars Tanzanians from buying Safaricom shares
    By Mnaku Mbani

    The Bank of Tanzania has barred local investors from buying shares in Safaricom, East Africa�s most profitable company, through the Dar es Salaam Stock Exchange, The Citizen has learnt.

    Tanzanians hopes of participating in the company's huge Initial Public Offering, which has been widely received in Kenya, Uganda, Rwanda and Burundi, were dashed in one fell swoop, when the central bank sent out a letter, indicating that buying those shares would be contravening the country's financial regulations.

    However, reacting to the BoT decision, Orbit Securities CEO Laurean Malauri said in Dar es Salaam: It's extremely unfortunate that Tanzanians will miss this important economic opportunity. This is against the spirit of East African economic integration.

    Orbit Securities were the local brokers who had been appointed by Safaricom to sell its IPO shares at the DSE.
    The sale of 10 billion Safaricom shares billed as the largest divestiture in post-independence Kenya, as well as the East and Central Africa region was launched on March 28, in Nairobi.
    But according to the BoT letter dated April 4, Ref No.IA.53/61/05, addressed to the DSE, the Governor, Prof Benno Ndullu, said Safaricom had not made any commitment to cross-listing at the Dar mart, which denied the country an opportunity for the development of the local market.

    Please be advised that the sought dispensation would be difficult to administer given the existing limitation on convertibility of EA currencies, says the letter, which was copied to the minister for Finance and Economic Affairs, licensed brokers, the Attorney-General and the Capital Markets and Securities Regulatory Authority (CMSA).

    The letter, a copy of which was made available to The Citizen, added: In any case, piecemeal waivers will not address the fundamental issues on capital account liberalisation, but rather undermine transparency and market development.

    According to the two-page letter, the BoT is unable to grant the sought approval but would like to work with stakeholders in revising the policy framework governing such transactions, and thus promote integration of the EA market in a sustainable manner.

    The Sh900 billion ($750million) IPO was to be sold at a discounted price of Sh90 (Ksh5) a share to would-be Tanzanian investors.

    The Kenya Government jointly owns the company at 60 per cent and Britain's Vodafone, 40 per cent. The IPO, touted as the biggest ever on the Nairobi Stock Exchange, had to be delayed last year because of the General Election. Analysts and brokers in Kenya expect the IPO to be heavily oversubscribed.
    The opposition party, ODM, had also urged delay of the IPO until the real owners of a shadowy company known as Mobitelea, which is said to own five per cent of Safaricom, are revealed.
    Safaricom made a pre-tax profit of Sh440 billion ($370 million) in 2007, making it the most profitable company in East and Central Africa, followed by East African Breweries Limited.
    From the original investment of $50 million and licence fee of $55 million paid by the Government and Vodafone Kenya, together will loans from the financial market, the company's value now exceeds $3 billion.
    Following the Tanzania central bank�s ruling, Tanzanians keen on buying a stake in Safaricom must now find their own way to buy the shares.
    However, the IPO has continued to draw numerous prospective buyers in Uganda, Rwanda, Burundi and, of course, in Kenya.

    On Monday, Uganda's National Social Security Fund bought shares worth $34million (Sh40.8billion).
    The minimum one can buy is 2,000 shares.

    In Dar es Salaam, Orbit Securities boss Malauri, a former BoT principal economist, said the 14 per cent discount was enough to mitigate any currency exchange risks.

    He said the sale of the IPO in the Tanzanian market would have stimulated the Dar es Salaam bourse and enabled more Tanzanians to invest in the mart as the Safaricom price was affordable.

    Mr Malauri said Tanzanians could have benefited from the IPO because Safaricom is one of the most profitable companies in the East African region. Most previous IPOs on the local stock market, he said, had been sold at a higher price.

    We regard this as a move backwards in the EAC federation effort, Mr Malauri said.

    He said most of the cross-listed companies such as Jubilee Holdings, Kenya Airways and East African Breweries had not been beneficial to the locals.

    Much as we did get approval from BoT, Tanzanians have not yet participated fully in the EA cross-listed companies, he added.

    As Mr Malauri criticised the BoT decision, the Dar es Salaam Stock Exchange said it was the right decision as it was aimed at protecting Tanzanian investors.

    DSE chief executive officer Jonathan Njau said though Safaricom IPO was potentially lucrative business, it had no clear exit mechanism for Tanzanian investors.

    It would have become difficult for the IPO to be sold due to differences in currency exchange rates in the region, he said.

    Mr Njau said the current regulations do not allow a company to raise funds through the DSE and invest the money outside the country.

    DSE, he said, had appealed to the East African Stock Exchange Association (EASEA) to enable a company to cross-list its shares in each bourse, but had failed.
  2. BAK

    BAK JF-Expert Member

    Apr 11, 2008
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  3. K

    Koba JF-Expert Member

    Apr 11, 2008
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    Trophy Points: 180 if hizo pesa zetu ni za kwao,yaani madwanzi matupu yamejaa pale BOT,na hii mijitu ndio inatuongozea our highest financial body...kweli tumeliwa!
  4. BAK

    BAK JF-Expert Member

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    Si ajabu baadhi yao na mafisadi ndani ya sirikali na CCM ni shareholders wa Safaricom. Huyu Ndullu wakati mafisadi wanachota mabilioni ya mapesa alikuwa amekaa kimya hakutia hata neno, sasa inapokuja kwa Watanzania kutaka kuwekeza pesa zao kwenye safaricom anakuja na sheria zake za mwaka 47! Sheria za ajabu ajabu kama hii ambazo hazistahili kuweko katika mwaka 2008 ndizo zinawafanya Watanzania walio nje kufikiria mara nne nne kuhusu uwezekano wa kurudi nchini.
  5. Masanja

    Masanja JF-Expert Member

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    Hapa uchumi kwangu ni sifuri. Ngoja niwasikie wachambuzi wa shule yetu ya Jambo Forum wanasemaje. So whether Ndullu is right or wrong. I dont know, so I cant condemn or appraise his decision. Please wajuvi mje hapa mtupe shule!

    Tunasubiri maana si vema kuanza kulaumu wakati hujajua basis ya maamuzi ya mchumi Ndullu.
  6. Dua

    Dua JF-Expert Member

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    Safaricom imekaa kifisadi fisadi tu naona wanatafuta pesa ya walalahoi kwa udi na uvumba.
  7. C

    Code X Member

    Apr 11, 2008
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    BoT is mandated to administer stock markets through Capital Markets & Securities Authority (CMSA), who is the regulatory body. Under CMSA, the DSE is the stok exchange which facilitates matters relating to stocks. As such, Tanzanian investors are therefore being protected through CMSA' monitoring of DSE, which in turn monitors and facilitates the, in this case, Safaricom share trading.

    In the absence of Safaricom in Tanzania, what would be the situation? Remember, we have EABL (Kenyan), Kenya Airways (Kenyan) crosslisted in Tanzania's DSE, and there is no problem about that.

    If we just blame the BoT without analysing the situation, we may not be doing the right thing.

    After all, the presence of Tanzanian investors in the Safaricom will have no impact on our weak stock exchange, since there are no crosslisting committments by Safaricom.

    What Tanzanians can do is to buy shares on their own risks, as they have been doing at any other times, but facilitation of regulatory bodies would require stakeholder's working on revising policy frameworks.
  8. Allah's Slave

    Allah's Slave JF-Expert Member

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    Mpaka leo hii kenya ina kampuni 2 tu za simu. Safaricom na Celtel. Ugawaji wa vibali kwenye hii sector ya communication ni mgumu kupita kiasi. Kinachoenda kufanyika huko mbele ni kuwa Serikali ya Kenya inajitoa kwenye hii biashara alafu inaanza kugawa vibali vya telecommunication companies kama pipi. Wale wanaong'ang'ania kununua shares za hii kampuni wajue kuwa huko mbele faida inayopata Safaricom sasa itakuwa ndoto. Competition itakayokabiliana nayo Safaricom in 2 years time itakuwa tofauti na ya sasa.

    Pia kwa jinsi hii kampuni ilivyokuwa inabebwa na Serikali ya Kenya, sidhani kama itabebwa tena. Pia ilikuwa inapata discounts kibao kwenye kodi na importations ya vifaa flani. Angalieni bill ya TAX itakayopewa hii company baada ya Government kujitoa pia.
  9. J

    Jamco_Za JF-Expert Member

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    Ni kweli kabisa bila Safaricom kuwa listed Tanzania wale wanao hold kiasi kidogo cha share wanaweza wasiwe na liquidity kwani itakuwa vigumu kuuza share zake kama anataka kuuza, nafikiri wamebase katika ili kwani watanzania wengi watanunua share kidogo tu kwa vimishahara vyao siku akitaka kuuza ataitaji mtu azipeleke Nairobi kitu ambacho kitachukua muda na hasara pia kwani hata commission ya agent lazima itakuwa kubwa.
  10. M

    Mtanzania JF-Expert Member

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    Kama mnataka kukomesha ufisadi, inabidi mumsifu huyu Profesa na sio kumlaumu.

    Haya mambo ya kukimbilia ulaji na kufanya mambo kinyume na sheria ndio mwanzo wa matatizo yetu mengi.

    Muhimu hapa ni kuangalia kama hizo sheria je bado zinatufaa? Kama hazitufai basi tuzirekebishe na sio kuzivunja kwasababu kuna faida.

    Nimeona kampuni moja Tanzania wamefanya positive analysis ya hiyo Safaricom, halafu kumbe wao wenyewe ndio walikuwa tena agent wa kuuza hizo shares, what a conflict of interest!

    Hongera Prof. Ndullu kwa kusimamia sheria zetu!
  11. Kapinga

    Kapinga JF-Expert Member

    Apr 11, 2008
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    You have hit the spot..nathan policies za vodacom/vodafone africa tunazielewa hao mobitelea ni vigogo serikali ya kenya...NDULU is protecting us...KENYA TELECOMMUNICATIONS ZIPO MONOPOLISED NA SAFARICOM..odm wakija itakuwa issue...they will loose their control of the market..tuwe makini na hizi shares..lets not allow statements like the biggest company in east africa worry us..kenya kuna uozo kuliko tunaouona tanzania saizi!! ITS JUST SAD NDULU AND OTHER BOT OFFICIALS CUDNT PROTECT US FROM EPA ..the irony...
  12. Gembe

    Gembe JF-Expert Member

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    Ndulu hakuwapo wakati sula la EPA linazungumziwa,Kapinga nilishakushauri ukiona unashindwa na hao watu ni bora kuungana nao tu

    thus why hata ODM waliamua kuungana na kibaki.bila hivyo hutabadki kwa kama MREMA,tha world is just like that.
  13. Kapinga

    Kapinga JF-Expert Member

    Apr 11, 2008
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    Trophy Points: 0 im not gonna give up..kama wakina miungu mtu MOI,MOBUTU, MUGABE..Watu ambao walishikilia nchi mkononi wakati wao umefika ndo hawa njaa wa Serikali ya bongo wasitoke! Wacha tusome and keep the fight goin...its only a matter of time..(join them now and you will fall with them)
  14. M

    Mbangaizaji Senior Member

    Apr 11, 2008
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    Mi nadhani kuna issue 2 ambozo inabidi ziwe cleared kwenye hili:-

    1. BOT hawajakata watanzania kununua hizi shares on their own risk and funds.Bali walichokataza ni kuwa DSE wasiwe involved maana haijakuwa hamna makubaliano yoyote ya ku cross list hizi shares.
    Kitu ambacho BOT imekiangalia ni impact on the overall economy ya Tanzania kama hizi shares zitauzwa through Tanzania's brokers.Maaana zikishakuwa zinauzwa na Tanzania brokers it means financial institutions(banks) zitakuwa involved kwa kukopesha 100% ya share value kwa wateja wao maana hamna mtu asiyejua kwa sasa IPO price ni Kshs.5, lakini hizi zikianza kuuzwa kwenye Nairobi stock exchange mwezi wa kwanza tu inategemewa kucross over Ksh.20 na in 6 month time it is expected to reach Kshs. 50.Hii ni analysis ya wataalam wa haya mambo ambao walinimegea kidogo. Sasa BOT wasichokitaka ni kutumika kwa Tanzania Depositors Money to buy shares in another country.Kama mnakumbuka hata IPO ya Twiga ilisababisha liquidity crunch in the market ya Tz. Maana hata overnight borrowing ilifikia mpaka 18% kwa TZS.

    2. Ila kwa wenye fedha zao wakuu, we nenda any bureau de change nunua KShs zako. Panda Scandinavia/KQ mpaka Nairobi/Mombasa, walk in kwenye any Bank na jaza form na unafungua account inayoitwa CDC account. Unadeposit KShs na unasubiri allotment ya hizo share. Ukipata nusu hewala na unarudishiwa kiasi ambacho hukupata. Benki nyingi za Kenya unaweza kutuma online instructions kwahiyo ukikosa unawaambia waziwire back Tz na it is done. Shares zako ukitaka kuuza unamuinstruct broker CDC account yako na share ngapi unataka kuuza. Then unauza.

    Tatizo lilotokea kwenye hizi shares mi kwa mtizamo wangu ni DSE walichelewa kuongea na Safaricom on the issue of cross listing hivyo basi hawakuwa na ground ya kuwa convince BOT wakubaliane. Maana hizi shares zikiwa cross listed later when price has appreciated to Kshs.50. Nani atanunua hapa Tanzania?

    Ila wakuu hii IPO ni dili nzuri kama unavisenti vyako vya akiba na uko tayari kuchukua Kenya country risk.
  15. Invisible

    Invisible Admin Staff Member

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    By Mnaku Mbani

    Thanks to Sunday Citizen for this news
  16. Steve Dii

    Steve Dii JF-Expert Member

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    Hawa BoT wangetakiwa kuona vipengele kama hivyo mapema. Liberalization na cross-linking za stock market itawezekana kweli iwapo mambo ya exchange rate tu yanatumika kama sababu ya kutowezesha?!

    If not careful, this could play to the disadvantage of successful Tanzania businesses that are eager to float their shares on other two markets. It is a shame to see the environment to accommodate such components of the stock market are yet to be neatened. Meanwhile, in the media they keep on trumpeting about the cross-linking of these markets but in reality they are doing the opposite in supporting the mechanism.

  17. M

    Mbalamwezi JF-Expert Member

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    Mbangaizaji, thanx indeed, and this is what is called "capital flight."
  18. Susuviri

    Susuviri JF-Expert Member

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    Mi nadhani also tujaribu kuangalia ya kuwa BOT is too general term as there's CMSA (capital market and securities authority) inayosimamia masuala haya. Hata kama Safaricom wanataka kufanya cross listing ni lazima ipitie CMSA. Sasa mi naona hapa haikuwa DSE kuzungumza na Safaricom, swali ni je, kwa nini mpaka leo Tanzania ni ngumu sana kupata cross listed Kenyan companies? Mi nadhani hiyo taasisi ya CMSA nayo inabidi imulikwe na kuangalia wamefanya kazi kuhakikisha capital market ya hapa nchini inakua na kustawi? Kuilaumu BOT si sahihi kwa sababu CMSA imeshakuwa independent of BOT. But I stand to be corrected.
  19. Susuviri

    Susuviri JF-Expert Member

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    Capital flight mi nadhani inafanyika (businessman wananunua dollars na kuziweka kwenye account za nje!)na kwa kuruhusu cross listing au watanzania kununua shares Kenya, it is at least a transparent manner kuliko inavyotendeka sasa. hii issue ya capital flight inabidi iangaliwe in the context of current economic reality. In today's globalized world, money seeks investment wherever it may be. Wachina wanainvest in the US, American investors invest in oil etc. Badala ya kukaa na worrying about capital flight, we should make our capital market more transparent and efficient, ili tuweze ku-attract capital from Tanzanian investors (beleive me, many shares were oversubscribed including Twiga cement shares) and also foreign investors (hivi sasa sheria imewawekea limit).
  20. s

    smak786110 Member

    Apr 16, 2008
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    i am an investor plus broker in DSM stock exchange...
    If anyone is interested for advises etc, let me know !