What you need to know about Vodacom Tanzania's listing

Tanzanian nationals and institutional investors have less than ten days left to become shareholders of Vodacom Tanzania as the initial public offering (IPO) subscription deadline looms on April 19. In a bid to allow foreign investors to participate in the offering, which is currently limited to domestic buyers, two financial advisory firms, Vervet Global and Orbit Securities, are establishing mutual funds. Kanawanga Kapinga, Investment Advisor & Partner at Vervet Global, shed light on the evolving landscape in a recent interview with CNBC Africa. Kapinga emphasized the shifting dynamics in the market, particularly the challenges posed by the exclusion of foreign investors from the Vodacom IPO. He highlighted the declining liquidity in the market, which has dropped from 200 trillion to 75 trillion Tanzanian Shillings. Foreign investors traditionally play a significant role in the Tanzanian market, with 97% of trading being attributed to them in the first quarter. This dominance raises concerns about the impact of excluding them from the Vodacom offering. The local market cap at the Dar es Salaam Stock Exchange (DSE) has experienced a 3% decline to approximately 7.5 trillion Tanzanian Shillings. While this trend has been consistent in recent weeks, advisors and brokers are hopeful that injections from pension funds could potentially offset this downward trajectory. Nonetheless, the interest from foreign investors remains strong, with many eagerly awaiting the decision of pension funds, key players in the Tanzanian market, on their involvement in the Vodacom IPO. The uncertainty surrounding the pension funds' stance has kept market participants on edge, with anticipation building as the IPO deadline approaches. Amidst these developments, the establishment of mutual funds by financial advisory firms signals a strategic move to facilitate foreign investment in the Vodacom offering. The Tanzanian market is poised for an interesting period ahead as stakeholders closely monitor the unfolding situation and await the decisions that will shape the outcome of the Vodacom IPO.