This is a market for the shares of companies. The market facilitates for companies to raise long-term capital to finance their long-term financial requirements. Shares, once issued may be listed on the stock exchange in order to provide an exit mechanism for investors when they wish to exit as well as facilitating price discovery.
Main Investments Market Segment-MIMS
Conditions and procedures for issuing shares and listing at the DSE Main Investments Market Segment (MIMS)
A company applying for listing of shares on MIMS must meet the following criteria:
- It must be duly incorporated in the United Republic of Tanzania as a public company with minimum of 7 shareholders;
- It have been in existence and operational for a period of not less than 3 years audited accounts;
- It must have it will have sufficient working capital;
- It must have a profitability track record two of the last three years before application;
- Issued shares must be freely transferable;
- The company must agree to comply with continuous listing obligations;
- It must issue at least 25% of its share to public;
- It must have at least TZS 200 million paid up capital;
- The company must have at least 1000 shareholders; and
- It must show that it has a competent board of directors and senior management.
Note: A foreign company must be registered in Tanzania as a foreign company for the purposes of cross-listing.
Procedures for Listing
- Obtain the shareholders consent to issue shares to the public;
- Appointment of a team of consultants to prepare the company for public issue of securities and the listing of these securities on the stock exchange;
- Preparation of a prospectus by the lead adviser and other consultants as required by CMS Prospectus Regulations;
- The issuer must appoint a broker to sponsor its application for listing and inform the exchange of such appointment;
- The issuer must submit to CMSA and DSE the application through the sponsoring broker for approval of both institutions;
- The approval of the prospectus allows the issuer to start selling securities on primary markets.
Prospectus Requirements Checklist for Issuance under the MIMS
In submitting prospectus for evaluation advisors are required to include the prospectus checklist dully filled to ensure that the prospectus contains the required information as per the checklist. Click to download checklist
Enterprise Growth Market Segment-EGM
Enterprise Growth Market (EGM) is a new market segment which has been introduced in Tanzanian capital markets following the completion of a study on appropriate capital markets structure in Tanzania. The market segment is designed to facilitate mobilization of capital by companies which do not meet the eligibility criteria for listing on the main investment market segment. This market segment is also designed to help startup companies with good business plan but lacking capital, to raise funds for their initialization as well as implementation of their business plans.
Conditions for issuance and listing under the EGM
- Must be incorporated as a public company under the Companies Act;
- No minimum capital requirement;
- No minimum track record is required;
- No minimum profitability requirement;
- If the company has no track record, the promoters will not be allowed to exit for the three years of listing;
- The company must appoint and retain a Nominated Advisor;
- Must have 5 years business plan and an independent technical feasibility report prepared by the Nominated Advisor;
- Minimum number of shareholders is 300;
- Public shareholding should be at least 20% of the issued shares;
- Must prepare a Prospectus to be approved by the CMSA;
- Publication of an abridged Prospectus in the press;
- Must have an Audit Committees as per the guidelines on corporate governance; and
- The Memoranda and Articles of Association should provide for good corporate governance observance.
Procedures for Listing
An issuer who has met the initial listing conditions must follow the following procedures:
- Appointment of a team of consultants to prepare the company for public issuance of securities and the listing of these securities on the stock exchange;
- Appointment of a Nominated Advisor to nurse the company from the initial idea of raising capital via EGM until de-listing from EGM (end of listing on EGM) (if any) or the company graduates to the Main Investment Market Segment listing;
- The issuer must submit to CMSA and DSE the application of a Nominated Adviser for approval of both institutions;
- Preparation of a prospectus for the purposes of public offer and listing as required by CMS Prospectus Regulations;
- Provide a letter of undertaking that the company will comply with the DSE continuous listing obligations;
The approval of the prospectus allows the issuer to start selling securities on primary markets.
Note: The appointment of issuance and listing professionals under the Lead Advisor, to ensure compliance to the CMS Act and listing rules of the DSE, is a legal requirement. The IPO process is expected to take up to six months from the time consultants are engaged to the listing of securities at the DSE.
Prospectus Requirements Checklist for Issuance under the EGM
In submitting prospectus for evaluation advisors are required to include the prospectus checklist dully filled to ensure that the prospectus contains the required information as peer the checklist. Overall, the Initial Public Offer (IPO) period may range from three weeks to a maximum of one month for equities. For bonds, it may last shorter than three weeks depending on the vibrancy of the market. Click to download