Frequently Asked Questions - All FAQs
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All information you need to know when you are about to sell/buy shares.
Investments in stocks and shares can fit some strategies and goals. Here’s how they work:
A share is a piece of ownership of a company or enterprise. When you buy a share, you become an investor and thereby an owner of a piece of the company’s profits or losses. By buying a share, money which could have been idle or otherwise held in low interest earning savings, moves to a more productive economic activity. The profitability of investing in shares however; depends on among other things, a good management of the company, avoidance of wastage and, a Conducive business environment
Companies sell shares to Raise (borrow) money from members of the public to expand their business activities in order to make more profits. They invite members of the public to buy shares and by so doing, have a say of running the company as lenders of money and owners. Shareholders expect a profit as a reward from lending their money to expand the business of the company.
TCCIA Investment Company was floated specifically to enable indigenous Tanzanians, directly or through the Chamber, to participate in the privatisation of National Micro Finance Bank (NMB) following the breakup of the then National Bank of Commerce.
The NMB IPO was successful; some people said it was very successful. It was heavily oversubscribed. The Consortium had bought the shares from the Government at a price of 40/= shillings per share but the NMB IPO sold the shares at 600/= shillings. This illustrates the wisdom of TCCIA in fighting for a position in the Consortium on behalf of Tanzanians: within no time the shares had jumped in value from 40/= shillings to 600/= shillings. NMB was soon a very profitable and began paying good dividends. Success of the NMB IPO was an important event: it provided the seed-capital needed by TCCIA Investment Company to begin serious operations.
This seed capital from 2 sources: high, regular dividends from NMB as well as selling (some of) the NMB shares in the stock exchange (remember it bought the shares at 40/= each and the shares were soon selling at 800/= per share on the DSE, reaching 4,000/= shillings at one time before correcting to the currently 2,310/= shillings.
In short, the value of the company’s investments in NMB and other shares rose from 340 million shillings just before the NMB IPO to 28.6 billion at September 2016, the date of the current IPO. This is a real-life true story that unfolded before our eyes.
You can sell your shares through any of the DSE stockbrokers, either by phone or by going there directly to give them order to sell your shares. Many of the Brokers have agents upcountry or have got interactive websites that you can use to access the Broker, or of call them by phone. You can also sell through MaxMalipo using your mobile phone through a routine that randomly assigns you to a Broker of your choice
Selling of shares begins 24TH April 2017.
Yes, there are risks, risks related to the Company, risks related to the industry and risk related to the macro-economy. Like all businesses, there is no guarantee that the business will perform as well as expected or at all. The Company will be investing in shares of listed companies, which means that its valuation will follow then performance of the individual companies. It is also possible for shares on the DSE to go up in value, or go down. Past performance is no guarantee that it will be repeated.
Mitigation is possible to some extent but if we know them, they stop being risks. You must therefore seek advice of professional advisers at all times. You must participate in all press briefings and attend annual general meetings as long as you remain a shareholder. Generally speaking, the nature of the business is so transparent and our Board and Management so experienced that we are unlikely to be hit by total surprises.
Information on how Fund Management works.
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All you need to know about an Investment Advisor.
A shareholder is an investor who buys shares with an expectation of profit. Profits in shares are through dividends, gains in share prices, bonuses, rights etc. A shareholder owns a piece of the company (his/her profits equal to the number of shares he/she owns).
General information about DSE to Investors
DSE is a short term for name The Dar es Salaam Stock Exchange – a secondary market for financial products. The Dar es Salaam Stock Exchange is a body corporate incorporated in 1996 under the Companies Act, 2002 as a company limited by guarantee without a share capital. It became operational in April, 1998.
The main thing that makes the Stock Exchange Market different from other markets is the types of products traded, how they are traded, and how they are paid for and transferred.
The products traded at the DSE are financial products. Currently the financial products traded are Shares and Bonds; Shares are also known as Equities and Bonds are also known as Debt instruments. Collectively, the products traded at the DSE are referred to as Securities.
For an economy to grow, money needs to shift from less to more productive activities. In other words; idle money and savings should be invested in productive activity for the economy to grow. The Dar es Salaam Stock Exchange makes this possible by:
The market is open Monday to Friday from 8.00 a.m. to 5.00 p.m. Trading activities start at 10.30 a.m. and continue until 3.00 p.m. Members of the public can view the market from the public gallery at any time while the market is open. The market is closed during public holidays.
An investor can buy as little or as much as he or she can afford. It is also possible to invest very little money in groups of small investors pooled together by fund managers in the market.
Shares are bonded in minimum lots of 10 shares and above in the main market boards. Fewer shares than 10 are available on the odd lots board.
Bonds are sold in minimum bundles of TShs. 1 million. Small investors can pool their money together and buy a bond with the help of a fund manager.
All you need to know about TCCIA Investment Plc
TANZANIA Investment Company is a public limited company incorporated on 9 November 1999 under Certificate of Registration No: 38280. The Company is big, in that it has 2,493 shareholders holding 5,687,392 shares. From a starting point who contributed a base capital . It has invested in shares that are now worth 28.6 billion shares. It is small in the sense that it has only 4 employees and operates from rented offices in PPF House. It has no other assets and is completely debt-free.
The idea of forming the Company came from the Tanzania Chamber of Commerce and Agriculture (TCCIA). The Chamber was initiated by merchants and businessmen and women in the private sector, with the support of the Government to strengthen the private sector and was established in 1988. It. Establishment of TCCIA was an important step in moving on from a centralized, planned economy towards a more open, mixed economy giving full scope to privately owned enterprises and farms.
Within a few years of its existence, TCCIA found that indigenous Tanzanians across the country lacked knowledge about how modern commerce operates. As such, their ownership of the economy was negligible. This was especially troubling now that the Government was then moving rapidly from the command economy of government ownership of the economy towards the private sector. More and more parastatals were being privatised but the involvement of ordinary Tanzanians was minimal as they were not aware of available opportunities and what they would to play a more proactive for their economic empowering role.
Yes. The Government, as part of its divestiture program from NMB, decided to offer to sell an initial block of shares to a Consortium OF foreign and local companies. The sale was successful and the following was the ownership position in NMB immediately after:
The restricted sale to the Consortium, where TCCIA played a big part in ensuring the participation of indigenous Tanzanians, was successful. This proved to be an eye-opener to the Government. The authorities now realised that there now increased awareness and there was financial capacity amongst the people to participate in the national economy. So the Government decided to make an IPO of NMB to the general public of Tanzanians. The Treasury Registrar now decided to sell 21% part of its shareholding in NMB to the general public.
The Company is owned by individual members of TCCIA as private investors. It is not actually “owned”, nor even controlled, by TCCIA. The Chamber and its Branches upcountry) owns only1.2% of the shares of the Company. The bulk of shares (98.8%) is individually owned by ordinary Tanzanians who are members of TCCIA. the Rules of the Dar es Salaam require the Issuer to disclose its top 10 shareholders as under:
The Company did make an IPO in 2005 in when it was established. This was a small IPO which, with the permission of the Regulator (CMSA), was to be restricted to TCCIA members only. Though they were not TCCIA members, CMSA allowed LAPF and PPF also to participate in the IPO. That’s how the Company was born.
The Company has stuck to its core business of dealing in listed shares of the other securities. In addition to what has been said, the Company is also licensed and regulated by CMSA as a collective investment scheme (CIS) in the category of closed ended investment company. The essence of the CIS is the investment of funds in liquid assets, assets that have a ready market value. These include shares or bonds of companies listed on a recognised stock exchange. They also could be government securities issued by the Bank of Tanzania. It is allowed for a small noncontrolling percentage to be in physical assets like real estate, factories or unlisted shares.
The future prospects of the Company are discussed in the Chairman’s Letter.
HOW DOES THE COMPANY WORK WITH ITS FELLOW MEMBERS OF THE NMB CONSORTIUM? WHAT IS THE CONSORTIUM DOING NOW?
The NMB Consortium was a one-off and specific venture that the Government used to reach out to Tanzanians in privatizing NMB. The individual Consortium members have nothing in common: they don’t work together, nor are related in any way as a result of the NMB IPO. The only connecting point between them is of course that they were and may still be fellow shareholders in NMB. The Consortium was closed and disbanded as soon as the initial block of Government shares was allotted to the applicants.
The Company through this IPO, TCCIA Investment PLC is selling 112,500,000 shares at a price of 400/= per share. If the IPO is successful, we shall raise 45 billion shillings fresh capital for the Company. The minimum subscription is 100 shares, costing 40,000/= shillings. There is a green shoe option of 50% whereby excess applications will still get shares up to 50% of the IPO.
The proceeds from the IPO will form part of the Company’s general pool for investing in its core business. The money will be invested in listed shares and bonds as well as IN Government securities. This is what we have been doing in the past. This is what made us grow from a small company worth 340 million shillings to a gigantic portfolio worth nearly 30 billion shillings from the same seed capital.
It will not be business as usual. To take advantage of the bigger fund and leverage on our experience, we plan to do more things:
1. Acquire a broker’s license so that the commissions we pay or we miss will now accrue to the Company, enhancing its profitability;
2. Play a more proactive role in IPO’s by guaranteeing or underwriting them. This adds huge discounts and underwriting commissions to our income. The IPOs of the telecom companies would be one target investment, especially in the new upcoming smaller dotcoms than the ageing fgiants that are probably at their peak already.
3. Participate in lucrative agri-business, mining and other infrastructural projects as members of syndicated lenders or as direct venture capital or private equity investors. This will be done with minority stakes and only after thorough feasibility evaluation.
4. Work with the Government and other partners in accessing sovereign equity investments in gas, mining and telecom sectors that are otherwise beyond the reach of ordinary investors. The same entry criteria shall be used as above.
The IPO price was easy to set. As already stated, the Issuer is an investment company that invests strictly in listed shares. As such, the value of the Company at any point in time is the value of its portfolio, which is simply the value of the underlying shares.
If the price is set too high, investors will buy the same mix of shares from the DSE at a cheaper price and report higher yields. If the price is too low, the market will quickly buy our mix of stocks and report a higher yield.
In short, the value of the company is the value of the portfolio. THAT is how the IPO price was reached – the market value of the portfolio. Going forward, investors in the IPO will benefit from the upside that comes with economies of scale, our larger size and the superior earnings that will accrue for underwriting commissions and guarantee fees added to the broker’s buy/sell commissions which will plough back into the portfolio.
HOW DO I BUY TICL’S SHARES? HOW CAN TANZANIANS BUY SHARES? CAN NON-TANZANIANS BUY SHARES? WHAT SHALL I DO IF THERE ARE NO BROKERS OR ANY CRDB BRANCHES IN MY AREA?
Responses to all these and more questions are found in the Prospectus. Briefly, the shares will be sold through Brokers of the DSE in Dar es Salaam and their upcountry agents; CRDB Bank and all its branches throughought the country; all branches of TCCIA throughout Tanzania. In addition, you can also buy shares by mobile banking through Maxicom Africa (“MaxMalipo) as long as you use any of the major mobile money services. Yes, foreigners are free to buy shares in the IPO QUESTION
Share ownership has many financial advantages especially as part of an individual’s general investment strategy. There are specific benefits accruing to owning TICL’s shares such as being a shareholder of a leading investment company, so that you grow with it. As the Company is an investment company, there is scope to grow with inline with the general trends in stock markets, unlike investing, say, in manufacturing or service companies or utilities whose value is depended not only on demand and supply factors in those sectors but also on changes in technology. It is also unwise to invest in shares at the top of their peak because there is then little or scope for further growth. You can ask more questions at the selling counters but whatever you do, you must read the Prospectus to get full disclosure about the Company’s finances, directors, management, policies and future plans. For specific advice, however, please contact your nearest Stockbroker, Banker, Advocate, Accountant, Licensed Investment Advisor or any other professional Advisor.
HOW DO I APPLY? HOW DO I PAY? WHERE AND WHEN WILL I GET MY SHARE CERTIFICATE? IF I GET MORE MONEY CAN I BUY SHARES AGAIN? WHAT HAPPENS AFTER THE COMPANY IS LISTED?
The IPO opens on 1st February 2017 and runs for 6 weeks. The deadline for selling the shares is Tuesday, 14th March 2016. During that time the shares will be selling at a fixed price of 400/- shillings per share and you can buy shares as often as you wish. After the IPO period is closed, shares will be allotted to successful applicants, who will be issued with DSE depository certificates in place of share certificates. You can collect your certificates from the same place you bought them or by post at your own risk. We expect that the TICL shares will be listed on Monday 24th April 2017. Once listed, the value of the shares will rise or fall depending on demand and supply at the DSE but will in the longterm depend on the Company’s profitability and dividend payment record. After listing shareholders can trade their shares on the market, buying or selling, and will thereby increase or decrease their equity holdings. Each Year, shareholders will be called to an annual general meeting (AGM) to approve the accounts; appoint directors and approve payment of dividends proposed by the Directors
The Company has currently got 11 Directors, seasoned and experienced businessmen and women, professionals who have been with the Company for some time, sharing its core values about economic empowerment of indigenous Tanzanians. Their names are given in the Prospectus, along with their business track records as well as those of senior management. All Directors are appointed annually by the members in general meeting except for shareholders owning 10% of the shares who have power to nominate one person to be member of the Board. The first AGM after the IPO will provide opportunity for the Board to be reconstituted in line with the IPO results.
Your Broker will keep you informed of progress but you will first and foremost follow the timetable that is disclosed in the Prospectus. The Issuer will be making regular progress reports at key junctures of the IPO cycle.
Requirements For Opening trading account.
What you need to know upon transferring shares from one person to another
Note:Transfer of shares take place for only blood related individuals.
What are the Requirements for a Probate transfer to take place (Father/Mother To Children and Vice Versa)
Requirements needed when a person want to re-issue his/her certificate (this is when certificate is lost, destroyed or misplaced).