Dec. 19, 2016


Moremi Marwa

Tanzania

Moremi Marwa

CEO, Dar es Salaam Stock Exchange (DSE)

TBY talks to Moremi Marwa, CEO of the Dar es Salaam Stock Exchange (DSE), on the reasons for the exchange's strong performance in 2015, its plans to increase the number of listings, and his plans for the coming year.

BIO

Moremi Marwa joined the Exchange in May 2013, prior to which he held the position of CEO at the Tanzania Securities Limited brokerage firm since 2010. Moremi holds a bachelor’s degree in commerce and accounting and an MBA in finance, both from the University of Dar es Salaam. He has been a Certified Public Accountant since 2003, and is certified by the Financial Markets Association.

DSE was the only stock market to produce positive results in 2015. What are the reasons behind such positive results?

On the continent, and globally, investment activities, especially portfolio-related investment activities, were affected by fundamentals and investor sentiment. African countries have been affected by reduced economic activity in China. It needs copper, iron, timber, and agricultural products, and those markets slumbered. Second, we were affected by the weakness of African currencies. However, the stock exchange was not all that affected. Foreign investors lost almost 20% in relation to the loss in the currency alone. Still, fundamentally, looking at the performance of the companies, there were some positive outcomes. Our market is also insulated from global markets in terms of a lack of linkages. Also, as we are a net importer of oil, the reduction in oil prices helped strengthen our economy. We are still one of the only countries in Sub-Saharan African that is doing well.

How do you plan to increase the number of companies listed on the stock exchange?

There are two ways to increase the activities on the stock market, both in terms of companies that need to raise capital and get listed, and also on the number of investors that use the stock exchange as their investment platform. In terms of increasing the number of listings, we have been generating awareness, especially among the business community. We use mainstream media, social media, and interactions through seminars and forums to create awareness to get more people to understand the benefit of using the stock exchange. Two years ago, we introduced the enterprise growth market, a second-tier segment in the market to enable new SMEs to use the stock exchange to raise capital. The combination of these efforts has served us well and we have gone from one listing per annum to three. The second aspect is the legislative framework. We have seen the government requiring some private sector players to float their shares and allow local citizens to have a stake in those companies, therefore creating a wider economic ownership and wider financial inclusion. The new finance act of 2016 has specifically included a provision that requires telecoms companies to float 25% of their shares within six months. Therefore, we expect some new entrants later in the year.

What could be achieved if more people in this country knew the potential and benefit from using the services of the stock exchange?

Most Tanzanians do not know the benefits of using the stock exchange for their investment activities and as a less expensive source of capital. As a result, we only have around 450,000 people, which is close to 1% of the total population of our country. We have 25 listed companies, but that is 25% of the total GDP. The potential is huge; however, what hinders growth is the lack of awareness and education on how the stock exchange can be utilized as a platform. There are fiscal incentives provided by the government for institutions as well as individuals. If people could understand the tax benefits provided for them, then we might see a different future.

Do you have any specific goals for 2017?

We plan to introduce new products and continue to engage the public to leverage on the existing benefits that we have been able to offer. If we are able to leverage on what we have done so far and also introduce new products to the market that would be key. Also, we are still going through a transformation stage, changing the legal framework of our institution to another company. The new mandate and demands will be different because we now serve shareholders. We will have to have a new board that will represent shareholders' interests in this company. What is key is to successfully accomplish what we intended to do with this transformation process. By 2017, we plan to reach this objective.

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