THE BENEFITS FOR LISTING SECURITIES WITH THE DAR ES SALAAM STOCK EXCHANGE IN TANZANIA: BENEFITS FOR LISTING SECURITIES WITH THE DSE

THE BENEFITS FOR LISTING SECURITIES WITH THE DAR ES SALAAM STOCK EXCHANGE IN TANZANIA: BENEFITS FOR LISTING SECURITIES WITH THE DSEBenefits for listing securities are embedded in the rules and regulations for listing shares as provided in the DSE hand book. Although the benefits discussed in this article are essentially those enjoyed by investors in Tanzania, yet there exist less similar privileges the world over in the business of securities. Differences are essentially culminated by some factors including growth of the entire market as reflected in market capitalization, and number of firms listed securities in the entire stock exchange. Another difference may emerge due to the level of development of the country. Strong economies are assumed to have more strict rules and regulations than weak economies. Investors experience what can be termed huge benefits when investing in slim economy (immature) due to ‘loose’ rules and regulations which tend to benefit the investor than the host country. This is always done purposefully as a way of tapping and encouraging more investors. This is the case with securities investment in Tanzania. The benefits for listing securities ranges from those that entails to increase capital of the firms listing securities, waver or reduced interest charged in various operational segments and privileges enjoyed due to liquidity experienced by the firms.
ADVANTAGES OF LISTING SECURITIES
With the ever increasing techniques in terms of investment and technological advancement, the choice to allocate finances as a strategy for investment is crucial. It has been however noted in this literature that there are potentials of investing in securities such as bonds and shares compared to the cardinal practice of depositing finances with the financial institutions such as banks and wait for the accrued money through interests. The vitality of investing in the stocks is a reality that no sane person can deny. Thus this part provides advantages for listing securities specifically at the DSE.
a)    The company can raise capital relatively cheaply from the public. While the normal practice for financial increases of the firms are raising capital through loan acquisitions from banks and other financial institutions, which culminates for the interest of about 16% to 23% in favor of the banks and other financial institutions.
b)    On the contrary the Stock Exchange does the same role of raising the capital of the firm without subjecting the entire firm in interest charged against it. Thus the firm listing the securities with the DSE does so with minimum risk of loosing its capital.
c)    The performance of the company is monitored by the market and therefore a listed company is likely to perform better to meet the expectations of the public. The qualifications for the companies’ listed as indicated in this study limits to the maximum the possibilities of a company to perform contrary to the wishes of the investors. Thus it can be added that it is of paramount importance for the company to list her shares with the Stock Exchange, since it further helps the company to assess itself on whether it has a favorable future survival.
d)    Listing of securities is a marketing tool for a company as it would be referred to frequently during the release of the market information to the public. The DSE is currently conducting five trading per week. Thus a company listed, would be enjoying marketing benefits whenever trading results of listed companies are announced in either electronic or print media.
e)    Listed companies are generally considered to be good performers and therefore are perceived to have the potentials of providing a good return to the investors. Thus listed companies experience other benefits.
f)    Listing widens the range of financing choices of the company. Thus a company is not bound to raise its capital through a certain means only. Rather has variety of options including listing shares, financial institutions, directors, and banks.
g)    Listing of shares lowers financing cost of the enterprises. This could be associated with raising capital without incurring any substantial amount as a fee to the capital such as interest. Thus the burden for the company would be reduced.
h)    Listing facilitates share ownership changes or privatization. The listing company paves a way for transfer of shares from one individual to another. Thus it enables individuals to enjoy ownership of the company for time they want.
i)    Listing attracts foreign portfolio investors. Just as local investors are attracted through listing, the same happens to foreign investors. It enables foreign investors realize where to invest. Among the components important for investing is market and capital availability. An assurance of the market and ability to raise capital facilitates foreign investors to bring their intended capital from out side, and raise some capital within.
j) Listing enables both firm and individuals to realize the value of the company through the interplay of the demand and supply of the company shares at the DSE. Normally, assessing oneself can be a difficult thing, and some time challenging. The difficulties arise due to the fact that self assessment means giving value of your self using the criterion set the same. Nevertheless, listed companies can easily know their value through the interplay of the markets. This can be termed as facilitates open assessment as opposed to self assessment. Since it is the market which gives the value of the company, therefore the assessment attained is an open and done by the mixtures of professionals, businessmen, firms representatives and the public in general.
k) Listing of shares enables the company to increase the opportunities to venture into new investments and expansions by having alternative means of raising capital for such investments. Currently there exists cooperation between the East African Securities Regulators as well as cooperation of East African Stock Exchanges. The said cooperation has enabled the company wishing to expand its wings in the region, to list shares in other East African countries such as Kenya, Uganda and Tanzania thus raising the opportunities for raising capital. Today there are three Kenyan companies namely; Kenya Airways, and East African Breweries Limited and Jubilee Holding Limited that are listed in the three stock exchanges of Kenya, Tanzania and Uganda.
l) The listed companies also experience improved marketing of the products.
m) The listing of shares facilitates economic growth and improved livelihood of the people. Wealth that would be enjoyed by few people who established the business or firm would benefit all subscribers of shares of the particular firm. This is a key to improved growth of income of the people. Most people who used to deposit their finance with banks have confessed that shares listed at the DSE have made them gain between 100 to 2500 percent in three years. The benefits which supersedes gain resulting from bank’s interest by far. Generally, on average in Tanzania banks provide interest rate of 2 to 3 percent on deposit. The trend is similar the world over.
There are other packages that are associated with the listing of the shares with the DSE, and have been listed in the DSE handbook as fiscal incentives.