[2008-06-18]  Expert identifies factors making firms fail to list with Dar bourse
Disclosure requirements, ignorance and lack of public education are some of the factors hindering many companies from listing with the Dar es Salaam Stock Exchange.

Speaking to this paper recently, a research fellow, Godwin Sawe, said most companies hesitated to list with the bourse because they were required to put everything on the table as listing demanded a lot of transparency from listed company.

Ignorance also contributed to the slow pace of listing of companies at the DSE, he added.

``Some owners of potential companies for listing are not aware of the advantages of listing``, he said.

He said listing with a stock exchange was a cheaper source of capital than borrowing from banks at high lending rates, while disclosure requirements led to better corporate governance.

He urged brokers to conduct intensive public education to sensitise companies to go public for listing at DSE.

``It is worth noting that most of these companies are family enterprises and do not want `outsiders` to know how they operate their businesses,` he said.

DSE chief executive officer Jonathan Njau was recently quoted as saying that some firms erroneously believed that it was very difficult to raise capital because IPO expenses were very high.

He said, however, that listing expenses were tax deductible while fees were not paid upfront until the company had raised the needed capital.

Sawe also said that there was a shortage of human resources as brokerage firms were understaffed and there was lack of capacity to market issues.

Meanwhile, the Dar es Salaam Community Bank (DCB) starts listing its shares on the bourse this August.

According to the bank`s acting board chairman, Prof. Lucian Msambichaka, the bank opened its initial public offering (IPO) last Monday.

The IPO would be floated in the whole country through brokerage firms, all post offices and all branches of the bank.

He said the IPO would be floated for three weeks and on August 15 the bank would list and start trading its shares on DSE. During the IPO the bank planned to raise 1.5bn/-
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